Lean Operations, Six Sigma, & Lean Six Sigma Madhav Kasukurthi & Bill Ryan.
6 Sigma Lean
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Transcript of 6 Sigma Lean
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6-Sigma & Lean 101
6-Sigma
Lean
Other ProcessImprovement
Tools
A Lean-SS Overview
Introduction of 6-Sigma Tools
DMAIC process & tools discussion
Introduction of Lean Concepts
Identification of Waste
Workplace Lean Improvements
Sustainability
Business Score Card
A Business Case Example
please contact [email protected] for an animated PowerPoint presentation
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6-Sigma & Lean 101
A Lean-SS overview, not detailed presentation
Introduction of Six-Sigma Tools without stats
DMAIC process & tools associated with each phase
Introduction of Lean Concepts Identification of Waste
Lean Improvements in Gemba (Workplace)
Sustainability
Business Score Card
ISandR Services Presents -
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When you can measure what you are speaking
about, and express it in numbers, you know something about
it; but when you cannot measure it, when you cannot express
it in numbers, your knowledge is of a meager and
unsatisfactorykind.William Thompson (Lord Kelvin), 1824-1907
If you can't describe what you are doing as a
process, you don't know what you're doing.W. Edwards Deming, 1900-1993
6-Sigma & Lean 101Process Improvement Describe & Measure
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6-Sigma & Lean 101The Average and the Standard Deviation are Most Important
1
)(2
nXxS
i
nxX i /)(
These metrics are important, but we will keep this simple
AVERAGE
STANDARDDEVIATION
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6-Sigma & Lean 101Process Improvement The Family Vacation Example
Start with the end in mind THE GOAL Analogy of the family vacation
Would you start with how to pack better?
Where, What, Who - Destination, Activities, You & ? DEFINE Activities, Accommodations, Alt Options, Where is Start
Route - how far/long, transport vehicle MEASURE
Cost of alternatives ANALYZE
What to take - backpacks or suitcase ANALYZE
What can be done better from last time IMPROVE
Stick to budget & plan CONTROL
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6-Sigma & Lean 101What is 6-Sigma? A Short History
Improvement tools known for a LONG time
Popularized by GE, Motorola, et al
Collection of tools with standardize usage!
About BEST in class About dramatic improvement not stats
ASQ 80% of tools are not statistical
Process based on D M A I C
- Define - Measure - Analyze - Improve - Control
Presentation parallels book Stat Free Six Sigma P. Gupta (Accelper)
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6-Sigma & Lean 101What is the Significance of the Words 6-Sigma?
What does 6-Sigma imply?
Process of 3 defective parts per million (3ppm)
Depends on
Customers specified limits (Upper & Lower Bound) Average in the process (Average or Mean)
Variability in the process (Standard Deviation)
Not all processes need to be 6-Sigma Capable
A process that meets customer specifications by providingconsistent accurate results with no variation - near zero defects
Not all processes need to be 6-Sigma Capable
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Process Capability
CpK = [ Closest Limit X ]
3
Closest Limit X
6-Sigma & Lean 101What is 6-Sigma? Statistics Concepts, Without Statistics
Good Mean
Good Variability
Higher sigma is better to avoid quality escapes!
Customerspecifies
LL and UL
LowLimit
HiLimit
Variation = 2
Mean = XExamples
Production
size & location
of hole in a part
Service -
preparation of
tabloid content& distribution,
early vs late
1 sigma ( ) width at height
6
Good Capability
Distribution:Gaussian
RandomNormal
Error
The ProcessCharacterizing The Process
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6-Sigma & Lean 101What Process Capability?
Good MeanGood Variability
Poor MeanGood Variability
Poor MeanPoor Variability
Good Capability Poor Capability Poor Capability
mean
variation
LL HL
This is previous slide
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6-Sigma & Lean 101What Makes 6-Sigma Work?
When everyone understands the Cost of Poor Quality
In / ext failures, inspection, testing, rework (calc $$s)
Align VOC and biz needs for big improvements
S M A R T goals
Specific why, what, when, who, where, finallyhow
Measurable which metrics: how much / many, B4 & after
Attainable have resources: attitudes, abilities, finances
Realistic challenging believable & achievable
Timely* reasonable duration to complete with urgency
Visible with Executive Management Support
Employees encouraged to take risks (Deming, Drive out fear)
* Could be Tangible can experience with senses makes it more realistic and measurable
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The energy to overcome an existing culture, make improvementsand sustain change takes
Organization A
Organization B
6-Sigma & Lean 101What makes 6-Sigma Work? Culture Change Response Curve
Present Time Future
E
ffort/Cost/Resistance
effort, time and money
The paths are different for each organization.
DM
A I
C
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6-Sigma & Lean 101Customer Surveys Voice Of the Customer (VOC)
Research on customer satisfaction: Determine what is quality [Q is what the customer says it is] Find out what competitors are doing [better] Define quality performance measures to identify defects [Pareto] Identify factors to give a competitive edge [SWOT] Identify urgent problems [low hanging fruit 1st with best ROI]
Use multiple instruments to ID customer satisfaction. Theopportunity to collect misleading or useless information is possiblewith just one instrument.
Surveys, Focus Group, Face-to-face, (Dis)satisfaction cards,Competitive Shopping
- to gain information on - Stated Needs, Real Needs, Perceived Needs, Cultural/Unstated
Needs, Unintended Needs (Distinguish: Wants, Needs, Dissatisfiers)
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6-Sigma & Lean 101Customer Surveys - VOC
Feature/Process Satisfaction
FeatureImpor
tance
Customer Response to Survey
LO HI
HI
Maintain Good Work
& Performance
Maintain Current
Status
Over-effort for littlevalue
MUST Improve
Opportunity BeingLost
What was expected and experienced, what was the level of satisfaction and importance
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6-Sigma & Lean 101
How to look for and improve the PROBLEMS
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6-Sigma & Lean 101What is DMAIC?
Define the charter: why do this (ROI / VOC), which process(Pareto), achieve what, measure what (errors, FTT), whichresources, whos involved, how to accomplish (brainstorm /fishbone), what is goal, when complete, whats not included,
Measure specify info sources to measure, precision, frequency
of measurement, instruments used to measure, Analyze examine patterns, correlate dependent & independent
variables (SIPOC / histograms / scatter-plots), root-cause, failureinfluence (FMEA-SOD),
Improve development ofalternatives to reduce cost, variation,& waste or for faster delivery,
Control sustaining gains from project and maintaining processcontrol
Define
Measure
Analyze
Improve
Control
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Phase Tools Brief Description
D Project Priority Index PPI = (Benefit/Cost) X (Probability of Success/Time to complete in years)Time < .5
Estimated Savings/Cost > 2.0Recommended PPI > 4.0
D Pareto A graphical tool to prioritize various defects to identify the most important one
D Process Map A graphical description of activities and decision points
D Kano's Analysis A graphical tool to identify customer critical requirements, including customers' love to have' requirements
D SIPOC An excel lent tabular capture of most of the process constraints
D CTQ Operational critical-to-quality characteristics related to the customer expectation
D Project Charter Project plan with clearly-defined goals and milestones
M Cost of Quality Breakdown of product or service cost related to appraisal, failures and prevention
M DPU A product measurement, which is a ratio of the number of defects observed per unit verified
M Yie ld The percent o f process output wi th no error or defect .
A DPMO A process measurement, which is the DPU normalized to the product or process complexity
A Sigma Level A business measurement, estimated from DPMO, commonly used for benchmarking
A Average Typical performance
I Range Range of performance (maximum minimum)
6-Sigma & Lean 101What are Tools Used with DMAIC?
Define Measure Analyze Improve
Stat Free Six Sigma, Gupta
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6-Sigma & Lean 101Good Charter Components?
Business need - cost reduction, margin increase, governmentcompliance or increased customer satisfaction.
Business advantage ROI? - case should show the businessneed as dollars ($$s) to substantiate which projects selection.
High-level project scope sponsors vision of the project. Critical to success factors ID project, team, deliverables,
schedule, what is needed for project success: scope, schedule,cost, or quality.
Project constraints, risks and assumptions document theseconjectures; revisit during project to see if these remain true.
Authority of the project manager what is the responsibility ofthe project manager, to clarify their role assists with future decisions(controversial?) dealing with the stakeholders and organization.
Signatures demonstrates management importance & supportExample of form to assist in
addressing items to consider
Constitution
Bill of Rights
Plans Change
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Customer's OrderComplaints *
Late 192
Defective 44
Rude CS 37
No call back 23
Wrong Item 72
Incomplete 101
Refund late 17
Wrong Price 15
No Gift Card 3
Missing item 2
Not New - Used 12
Never Received 7
6-Sigma & Lean 101DMAIC Tools PARETO Ranking of Issues
Minitab
ExcelFigure out cost/benefit
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6-Sigma & Lean 101What is SIPOC?
Reference DocsLibrary
MagazinesSuggested Adds &
DeletesEditors
Educators &Trainers
Training
InstructionalInfo
ScholarlyReferences
Researchers
ConsultantsExercisesOriginal Written
ManuscriptAuthors
LibrariesAlbum of Related
workBinders
Web Whit PapersAbstractsElectronic DocsElectronics
Audio booksDVDs & CDsFigs & PhotosGraphics
BookclubsCliffnotesPaper
CustomersOutputsProcessInputsSuppliers
Reference DocsLibrary
MagazinesSuggested Adds &
DeletesEditors
Educators &Trainers
Training
InstructionalInfo
ScholarlyReferences
Researchers
ConsultantsExercisesOriginal Written
ManuscriptAuthors
LibrariesAlbum of Related
workBinders
Web Whit PapersAbstractsElectronic DocsElectronics
Audio booksDVDs & CDsFigs & PhotosGraphics
BookclubsCliffnotesPaper
CustomersOutputsProcessInputsSuppliers
Shipmentof Orders>
Process
Distributor Orders
>
First
PrintingPromotion
>
Publisher
Approval& PrintingSchedule
>
Editor
checkscontent
>
Graphicssubmits
figuresand
photos
>
Authors
submitcontent
Process for Publishing and Distribution of Scholarly Research and Textbook Materials
Shipmentof Orders>
Process
Distributor Orders
>
First
PrintingPromotion
>
Publisher
Approval& PrintingSchedule
>
Editor
checkscontent
>
Graphicssubmits
figuresand
photos
>
Authors
submitcontent
Process for Publishing and Distribution of Scholarly Research and Textbook Materials
Look forrelationships so Input improves stability in Output
Suppliers individuals providingresources
Inputs info, materials &Services
Process value addedtransformation steps
Outputs final product or service
Customers entity finding valuein output
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The cost of quality isnt the price of creating a quality product orservice. Its the cost of NOT creating a quality productor service.
Prevention Costs - New product review, Quality planning, Supplier capabilitysurveys, Process capability evaluations, Quality improvement team meetings, Qualityimprovement projects, Quality education and training, Appraisal Costs
Inspection Costs - measuring, evaluating or auditing products or services toassure conformance to quality standards and performance requirements; Incomingand source inspection/test of purchased material; In-process and final inspection/test;Product, process or service audits; Calibration of measuring and test equipment;
Associated supplies and materials; Failure Costs
Internal Failure Costs - Failure costs occurring prior to delivery or shipment of theproduct, or the furnishing of a service, to the customer. Scrap, Rework, Re-inspection, Re-testing, Material review, Downgrading
External Failure Costs - Failure costs occurring after delivery or shipment of theproduct -- and during or after furnishing of a service -- to the customer. Processingcustomer complaints, Customer returns, Warranty claims, Product recalls
6-Sigma & Lean 101Cost of Quality
Prevention Costs
Inspection Costs
Internal Failure Costs
External Failure Costs
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This is a way of analyzing problem and get to the root cause
The effect is usually negative - a problem
The problem should be specific and clearly stated
The ideas are generated by using brainstorming (vocal or silent)
Keep the group to asking themselves what would cause the problem?
Keep attention on the effect of the problem not criticism or how to fix
The goal is to find as many sources for variation as possible that cause theproblem
6-Sigma & Lean 101Brainstorming Fishbone / Cause-Effect / Ishikawa
Measurements
Methods
PM vs AM
Temp
Shift
PreparationSeasonStorage
Effect
Machine Man
Mother Nature Materials
RMAs
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Cause of FailureControl for Failure
Potential Failure
Effect of Failure
Risk AssessmentProbability ofOccurrenceSeverityAbility to Detect
Risk Priority NumberCorrective Actions & Re-evaluation
Part Number & Function
6-Sigma & Lean 101FMEA Failure Mode Effects Analysis
Determine what can go wrong, the severity, and how to avoid it
QCI Indiana Quality Council
FMEA Number: This should be a log controlled number for tracking thedocument
The part number, name, or other description
The design responsibility: Which department or group is responsible forthis design?
The person responsible for FMEA preparationThe date the FMEA was prepared and any necessary revision level
The subsystem or component part number getting detailed analysis
The component functionThe potential failure mode
The potential effect of failureThe potential cause of failure
What are the current controls in place to prevent the cause from
occurring?O is the probability this failure mode will occur. This index is from 1 to 10
with 1 being virtually no chance and 10 being near certainty ofoccurrence.
S is the severity of the effect of the failure on the rest of the system if the
failure occurs. Values are from 1 to 10. A value of 1 means the userwill be unlikely to notice with a 10 meaning that the safety of the
user is in jeopardy.D is a measure of the effectiveness of the current controls to identify the
potential weakness or failure prior to release to production. This
index ranges from 1 to 10. A value of 1 means this will certainly becaught whereas a value of 10 indicates the design weakness
would most certainly make it to final production without detection.RPN The Risk Priority Number is the product of the indices from the
previous three columns. RPN = OSD
The actions then are based upon what items either have the highest RPNand/or where the major safety issues are.
There is a column for actions to be taken to reduce the risk, a column forthe responsibility and finally a column for the revised RPN once
corrective action is implemented.
FMECA provides a disciplined approach for the engineering team toevaluate designs to ensure that all the possible failure modes have
been taken into consideration.
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6-Sigma & Lean 101Average, Standard Deviation, Max Value, Min Value in Data Sets
Active Cell
AverageStandardDeviation
Maximum Minimum
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6-Sigma & Lean 101Evaluating Data
Quantify what you want to improve and make decisions based on the data.
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6-Sigma & Lean 101Comparative Tests - Improving Means & Variance - Visualization
Data
sample6sample5sample4sample3sample2sample1
2.0
1.8
1.6
1.4
1.2
1.0
6 Samples - Comparison of Means andV ariation
Data
sample6sample5sample4sample3sample2sample1
2.0
1.8
1.6
1.4
1.2
1.0
1.45738
1.52912
1.68022
1.78123
1.47119 1.47366
6 Samples - Comparisonof Meansand Variation
Same Mean
Same Vari(1)
Same Mean
Same VariDiff Mean
Same Vari(2)
Diff Mean
Same Vari
Same Mean
Diff Vari(3)
Same Mean
Diff Vari
Use Methods to Visualize the Data to Make decisions Easier
Data RangeMeanMiddle 50% of Data
T-test for determining significant difference in Means
F-test for determining significant difference in Variance
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6-Sigma & Lean 101Yield - Efficiency of the Process
100*r
Pr%
ducedUnits
nitsDefectiveUoducedUnitsYield
%8.94100*00
26500% Yield
%Yield
ducedUnits
tsObservedTotalDefecDPUUnitDefectsPer
r
106.00
53DPU
DPU
Defect per Million Opportunities (DPMO) - the number of ways a defect can occur.If each item could have 8 ways to fail (label, scratch, color, wrong info, performance, ) then
250,138
000,106
8
000,000,1*106.0
#
000,000,1*
iveanBeDefectofWayUnitC
DPUDPMO
Rolled Throughput Yield (RTY)
Yield
Process1
= .9
Yield
Process 2 = .9
Yield
Process 3 = .9
Yield
Process4
= .9(.90)x(.90)x(.90)x(.90)= .656
65.6%
Y1 x
Y1=0.90
Y2 x
Y2=0.90
Y3 x
Y3=0.90
Y4
Y4=0.90 Guess
These are formulas
with examples from
this table. Pleaselook at these offline.
most familiar for defect eval
What is overall yield in chain of processes?
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6-Sigma & Lean 101Scatter Plot Visualize Process Data & Look for Trends
0
5
10
15
20
25
0 5 10 15 20 25
Independent Variable X
DependentVaria
bleY
Y has equivalent response to X andsimilar variation along response curve
Y has varying response to X and
different variation along response curve
What is different
about processes?
y=f(x)
x
y
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6-Sigma & Lean 101Control/Run Chart - Variable & Attribute - Track/React to Trends
UCL (3)
LCL (3)
Average & Range SPC Chart
17
19
21
23
25
27
29
31
Average
0
2
4
6
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
R
ange
UCL
You would look into why
these extremes happened
Attribute
Fraction Defective
Number Defective
Number of Defects
Percent Defective
Variable
Median & Range
Average & Range
Average & Std Deviation
Short Run Charts
Continuous
Discrete
Diameter of Hole
P.O. with Errors
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6-Sigma & Lean 101Objectives of Design of Experiments (DOE)
DOE is a systematic approach to determine & optimize the responsebetween process inputs & outputs (independent and dependent variables).
S & H and Delivery TimePart Size
The objective - optimize S&H of different part sizes for best delivery time.
DOE experiments do not change only one variable - variables can interact
Consider the interactionoftemperature and wind velocity in the wind chillfactor; more wind makes it feel colderand an engine requires the rightamount of both gasoline and air to get the maximum performance.
The experiment that changes variables one-at-a-time (OAAT) requires moreexperiments and cannot evaluate interactions; it is inefficient at best.
PROCESS
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86
88
90
92
94
96
P1 P2 T1 T2
6-Sigma & Lean 101Two Factor DOE Variable Influence
Plot the response.
RESULT
P T Yield
P1 T 1 Y1P1 T 2 Y2
P2 T 1 Y3
P2 T 2 Y4
INPUT
RESULT
P T Yield
50 25 94
50 75 92
100 25 96
100 75 88
INPUT
If you want to know the affects from two factors(i.e. temperature and pressure), then vary both Tand P then record the results of the dependentvariable (i.e. yield).
Dont just change one factor at a time.
Introduce terms, select levels, run experiment.
Change the pressure between 50 and 100 psi and
the temperature between 25 and 75 degrees F;record the yield results.
Calculate the meanyield for each factor level
This experiment is with 2 levels of P & T with a yieldresult
It could be Internal vs External S&H with big vs small parts and delivery time result
Y@P1 = 93 Y@P2 = 92 Y@T1 = 95 Y@T2 = 90
From the main effects pressure has lowerinfluence on the yield, while temperature has alarger effect on the yield (more slope, more effect).
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6-Sigma & Lean 101Two Factor DOE Hi vs Lo Importance
OK. Some of you are saying Wait a second!When P is changing so is T!? WHAT???????
EXAMPLE - Calculate the effect of P change.
Yield at P1 = (Result Y1) + (Result Y2)Yield at P2 = (Result Y3) + (Result Y4)
Yield at P1 = (P1 + T1) + (P1 + T2)Yield at P2 = (P2 + T1) + (P2 + T2)
Yield at P1 = (P1 + P1 ) + (T1 + T2)Yield at P2 = (P2 + P2 ) + (T2 + T2)
Yield at P1 = 2P1 + (T1 + T2)Yield at P2 = 2P2 + (T1 + T2)
or consider, the difference removes T effect(Yield at P1) - (Yield at P2) = 2P1 - 2P2
RESULT
P T Yield
P1 T1 Y1P1 T2 Y2
P2 T1 Y3
P2 T2 Y4
INPUT
RESULT
P T Yield
50 25 94
50 75 92
100 25 96
100 75 88
INPUT
REARRANGING & REASSOCIATING
SIMPLIFYING
GRAPHICAL DEPICTION
SUBSTITUTING VARIABLES PRODUCING THOSE YIELDS
This is what is important!!!!T1 & T2 contribute the
same amount to P1 or P2
Y@P1 Y@P2T1+T2 T1+T2
2P12P2
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6-Sigma & Lean 101More Factorial Experiment Designs 3 & 4 Variables
INPUT OUTPUT INPUT OUTPUT
A B C D Result1 Result2 A B C Result1 Result2
A1 B1 C1 D1 R1 R2 A1 B1 C1 R1 R2
A1 B1 C1 D2 R1 R2 A1 B1 C2 R1 R2
A1 B1 C2 D1 R1 R2 A1 B2 C1 R1 R2
A1 B1 C2 D2 R1 R2 A1 B2 C2 R1 R2
A1 B2 C1 D1 R1 R2 A2 B1 C1 R1 R2
A1 B2 C1 D2 R1 R2 A2 B1 C2 R1 R2
A1 B2 C2 D1 R1 R2 A2 B2 C1 R1 R2
A1 B2 C2 D2 R1 R2 A2 B2 C2 R1 R2
A2 B1 C1 D1 R1 R2
A2 B1 C1 D2 R1 R2
A2 B1 C2 D1 R1 R2
A2 B1 C2 D2 R1 R2
A2 B2 C1 D1 R1 R2
A2 B2 C1 D2 R1 R2
A2 B2 C2 D1 R1 R2
A2 B2 C2 D2 R1 R2
Exercise for later
these are balanced experiments equal number of each variable (A1,
A2, B1, B2, C1, C2), within all
experiments that are also unique withrespect to the arrangement of these
variables note: check out the colors.
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6-Sigma & Lean 101Lean
Document the process
Find the waste
Make a plan toeliminate the waste
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6-Sigma & Lean 101What Are Key Concepts of Lean?
Get the big picture of the process to Improve Quality Eliminate Waste - ID Value Added vs. Non-Value Added Activities
Reduce Lead Time Reduce Total Costs
Give customers what they want, when they want it, for what they want to pay, and withoutmore inve$tment by your company
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6-Sigma & Lean 101Create a Value Stream Map Present (Need Future State)
item Description
1 ID Customer, Supplier, and Production
2 Customer Requirements per Time Interval
3 Production & Containment Requirements
4 Shipping
5 Delivery
6 Sequence of Processes
7 Data specific to each Sequence
8 Communication Methods
9 Process Attributes: times, Efficiency
10 Operator Symbol - number
11 Inventory & Work in Process (WIP)
12 "Push" vs "Pull" Operations
13 Other Info
14 Working Hours Availability
15 Cycle & Lead TimesExample from - www.strategosinc.com
You will probably do this with pencil & paper
4
3
2
1 1
1
5
6
7
8
11
1210
14
14
15
15
9
This is the value streamprocess for the entire
plant. You can also
make a value streammap for a sub-process.
Eventually you need tolook at the entire
process to make sure
changes did not shiftwaste or problems to
another process andonly created a local
optimum.
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6-Sigma & Lean 101How to Identify Waste TIMWOOD or DOWNTIME
TIMWOOD Transportation
Inventory
Motion
Waiting Over-processing
Over-production Defects
DOWNTIME Defects Over-production
Waiting
Not Utilizing Employees* Transportation Inventory
Motion
Excessprocessing
*skills, ideas, creativity
Look for these forms of waste in the Value Stream Map
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6-Sigma & Lean 101How does 5S Help Eliminate Waste? Makes Waste Visible.
5 S - seiri, seiton, seiso, seiketsuand shitsuke
Sort, separate needed from unneeded items & remove the latter
Set-in-Order*/Straighten, arrange items for ease of use
Shine/Scrub, means to cleanup Standardize/Systemize, disciplined structured routines
Sustain/Self-Discipline, create a new habit
* 6 S adds Safety (part of Set-in-Order) make safety equipment easy to use
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6-Sigma & Lean 101Relation of What We Learned wrt Process Improvement
6-Sigma
Lean
Other PI Tools
There is more
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6-Sigma & Lean 101How to Sustain Progress with Lean & 6-Sigma
Keep employees motivated,customers happy,
processes running smoothly, and
the company making money
LEAN is NOT
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BusinessScorecard
Management Provides Vision & Strategy so the Business Can: #1 Take Care ofCustomers (VOC), #2 Take Care ofEmployees (Training, Resources, Rewards)
Employees Take Care ofProcesses (Process Control & Improvement) Processes Take Care ofFinances (Efficient Value Added Processes = $$s) Finances Take Care of Stakeholders and Provide $$s for Growth and
Improvements that add value for the customer
6-Sigma & Lean 101What are Components of Sustained Profitable Growth
Customer
Employees
Processes
Financials Vision & Strategy
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But Some Measurements Tend to Matter More than Others
Sturdy averages seem impressive from inside the
organization (the inside-out perspective)
But it is variability that the customer feels and fears (the outside-in perspective)
6-Sigma & Lean 101Six Sigma: Objective Quality Measures All Matter
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Challenges with Six Sigma for TransactionalFunctions like Purchasing/Procurement, SRM
Projects tend to lack objective data. What data there istends to be attribute (pass fail/ no. of shortcomings) andcategorical Solution: work with continuous data when possible to mimic
previously shown production charts. There are more options forstat. tool use; yield more guidance information. ROThumb:consider converting if at least 10 different values occur and nomore than 20% of the data set are repeat values
You may have a defined process and goal, but no tangible
spec limits. Arbitrary metric or soft target setting canmislead, distort. Example: 1-5 supplier rating.
6-Sigma & Lean 101
*SRM = Supplier Relationship Mgmt
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Challenges with Six Sigma for TransactionalFunctions like Purchasing/Procurement, SRM
-Data integrity problems of attribute data. MSA may beneeded
-Meaningful metrics may take more doing and trial and errorearly on
-Regression, DOE and ANOVA can be applied to multi-variable situations with lots of moving and interacting partsDCs, office locations, site specific paperwork procedures,carrier selection, suppliers with different lead time averagesand extremes, etc.
6-Sigma & Lean 101
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6-Sigma & Lean 101Pareto Diagram: Example
Days Delayed
PO Cycle Time - Unapproved Vendors
COUNT
PERCENT
Total Count = 895
0
90
180
270
360
450
540
630
720
810
900
0
10
20
30
40
50
60
70
80
90
100
Raw Material
324
(36%)
Equipment
255
(65%)
Engr. Matl.
135
(80%)
OTHER
92
(90%)
Admin
89
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Cause and Effect Diagram
Methods
Man
Measurement
Materials
Disorganized
Untrained
Too few
No step by step documentation
No established methods
Improper use of e-mail
Always running out of materials
Materials outdated
Proper materials never ordered
System errors in reporting
Wait time not comprehensive
6-Sigma & Lean 101Poor Customer Response Time
Poor CustomerResponse Time
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0
10
20
30
40
50
60
70
Suppl 1 Bids Suppl 2 Bids Suppl 3 Bids Suppl 4 Bids Suppl 5 Bids
Hi for Mo
Q3 for Mo
Q1 for MoLo for Mo
Similar Items Over Course of 1 Month (These patterns may be congruentwith other Supplier Behaviors such as RFQ Cycle Times, etc.)
6-Sigma & Lean 101Box Plots of Supplier Bids
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New/ECO
Product
Devlpt
Customer
Issue
Resolution
Waste, Rework
Unused Inv.
Supplier
Supplier
IssueResolution
Sales
Personnel
In House
Plant
Customer
Service DeptMarketing
Conveyance,
FreightCarrier
Customer
!!
6-Sigma & Lean 101Supply Chain Basic Flow Chart for Component Assembly Value Stream
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Days
6-Sigma & Lean 101Variation in RFQ Cycle Times for Critical Part
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Province of
Lean Sigma Manufacturing
Ed
Start
End
Collect Information
From Customer
3 hours
1 day
Collect Cost Info
From Outsourced Mfg
0.25 hours
5 days
Generate Quote
0.5 hours
2 hours
Negotiate
Price
1 day
3 days
Enter Order
0.25 hours
1 day
Assemble &
Delivery
1 week
10 weeks
Province of
Lean Sigma SRM
6-Sigma & Lean 101Component RFQ Process Time-Value Diagram
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Component
Company
Outsourced
Supplier
Support
Office
Outsourced
Supplier
Start SubmitCompile,
Send RFQ
Send to
Support
Office
Process
request
Return to
Own Plant
Compile
Information
Assemble
Quote
6-Sigma & Lean 101As Is Process Lane Map For Component RFQ
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SESStComponent
Company
Outsourced
Supplier
Start SendCompile
Request
Apply
Costing
Table
Assemble
Quote
Maintain
Costing
Tables
6-Sigma & Lean 101Future State Process Map For Component RFQ
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AFTER CHANGES
Process Shift, New Avg, New CLs
6-Sigma & Lean 101Variation in RFQ Cycle Times for Key Part
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Before
Changes
AfterChanges
Cycle Time, Days
6-Sigma & Lean 101Supplier Quote Time, Before and After Change
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New Quote Time, Days
6-Sigma & Lean 101Normal Probability Plot for RFQ Time