Cutting costs, improving quality, & speeding delivery through continous improvement

LEAN THINKING with

Six Sigma

Cutting Costs, Improving Quality, &Speeding Delivery

ByContinuous Process Improvement

Prepared By: Kurt E. Robertson Organization Consulting Department Saudi Aramco 874-6204

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

LEAN THINKING with SIX SIGMA

PRESENTATION OBJECTIVE

To Provide a brief overview of Lean & Six Sigma.

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

operations and service environments

Automation shouldn't be the first answer

Both Lean and Six Sigma are data driven

Lean takes a Systems Approach Lean is Team-based

Lean is a: physical transformation to your processes LEAN THINKING with SIX SIGMA

transformation of your organization cultural

LEAN IS ABOUT PEOPLE

EMPOWERMENT 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 provides the focus and direction that ensures that empowerment does not lead to chaos.

Center for Study of Work Teams Harley Davidson Company


Lean compared to Six Sigma Lean and 6 å 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 the improvement process something the other does not, and the fusion of Lean and 6 å is rapidly gaining popularity.

LEAN THINKING with SIX SIGMA DO LEAN FIRST before SIX SIGMA 99% of the time

Complementary Tools

6 Sigma OVERALL YIELD vs SIGMA (Distribution Shifted ñ1.5 å )

# of 3 ñ å 4 ñ å 5 ñ å 6 ñ åSteps

99.99966% 99.9767% 99.379% 93.32% 1 99.9976 99.839 95.733 61.63 7 99.9966 99.768 93.96 50.08 10 ion 99.9932 99.536 88.29 25.08 20

t 99.9864 99.074 77.94 6.29 40 ria 99.9796 98.614 68.81 1.58 60 a sv 99.9728 98.156 60.75 0.40 80

97.70 53.64 0.10 100 99.966 les L 99.949 96.61 39.38 --- 150

- 99.932 95.45 28.77 --- 200

ps E 99.898 93.26 15.43 --- 300

te 99.864 91.11 8.28 --- 400

rs 99.830 89.02 4.44 --- 500 A 99.796 86.97 2.38 --- 600 we 99.762 84.97 1.28 --- 700

fe N 99.729 83.02 0.69 --- 800

- 99.695 81.11 0.37 --- 900

s te 99.661 79.24 0.20 --- 1000 99.593 75.88 0.06 --- 1200 wa 98.985 50.15 --- --- 3000

s 94.384 1.91 --- --- 17000 s 87.880 0.01 Le --- --- 38000

78.820 70000 60.000 150000

Source: SIX SIGMA RESEARCH INSTITUTE Motorola University Motorola, Inc.


Combining Lean and 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 variability and defects using the five-step DMAIC model. 6 å 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 .


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. LEAN THINKING with SIX SIGMA

It is a Process and Cultural Transformation

Harvesting the Fruit of Lean Six Sigma

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

Middle Fruit Six Sigma tools

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

Low-Hanging Fruit Degree Lean tools

of ---------------------------------- Complexity

Ground Fruit Logic and Intuition


Let's Talk Lean First

Do Lean First in most cases And you should


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 LEAN THINKING with SIX SIGMA

Resources

Lean History

1973-2005 1945-1973 15 th Century 1973 1905 1974-2005

Boeing The Toyota Oil Embargo The Republic "Today and Books about : Danaher Production of Venice Tomorrow" JIT

U.S. Navy System by Cellular Manufacturing U.S. Air Force Henry Ford Visual Factory

Airbus Agile Manufacturing Dell Computer W. Edwards Flexible Manufacturing

Maytag Deming Synchronous Mfg Whirlpool Pull Production

McDonald's Rapid Continuous Microsoft Improvement

Kaizen And most companies Group Technology

that have tried Theory of Constraints MIT

and Six Sigma "The Machine That Changed the World"

LEAN SIX SIGMA "Lean Thinking" by

James Womack

Time 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


LEAN

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 LEAN THINKING with SIX SIGMA

process

General Rules

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

2. Lean is about 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 Q uality, C ost, D elivery, S afety, and M orale (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. LEAN THINKING with SIX SIGMA

The System

Planning Material Supply Operations Sales and Marketing

Value Stream

Value Stream


WASTE

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

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

If it prevents the FLOW of product or information..


Lean Focus - The 8 Wastes Lean 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: Needless 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 = defects 7. 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


The 9 th 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


Understanding FLOW


Why Lean?

Business as Usual

Waste PRODUCT CUSTOMER BUILT & SHIPPED ORDER

Lead-time

Lean Process PRODUCT CUSTOMER

BUILT & SHIPPED ORDER

Waste

Lead-time (Shorter) LEAN THINKING with SIX SIGMA

Why Lean?

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

3% 97% NVA VA

Where's Most Process Improvement the Real

Teams Attack this . . . Opportunity?

97% NVA

. . . Achieve this . . .

. . . and Ignore this

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


Excess Inventory Our corporate body guard against bad processes

A $ea of RM & WIP

Reduce the inventory and see the wa$te !


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

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?? LEAN THINKING with SIX SIGMA

Typical Causes of Waste

1. Layout (distance) 2. Long set-up time 3. Poor work methods 4. Lack of training 5. Functional organizations 6. Technology Gaps 7. Little understanding of the

entire process

8. Historic supervisory roles 9. Irrelevant performance measures 10. Lack of workplace organization 11. Supplier quality/reliability 12. Poor communication 13. Avoidable interruptions 14. Complexity

LEAN THINKING with SIX SIGMA 15. More.

Non-Value-Adding Activities (Operations)

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

1. SORTING

2. COUNTING

3. STACKING

4. EXPEDITING

5. TRANSFERRING

6. CHECKING

7. TRANSPORTING

8. HUNTING, SEARCHING, GATHERING LEAN THINKING with SIX SIGMA

Non-value-adding (NVA) (office)

Examples 1. CHECKING

2. SIGNATURES

3. ASKING

4. APPROVING

5. REVIEWING

6. MONITORING

7. REWORK

8. TRANSPORTING

9. DOUBLE HANDLING

10.HUNTING, SEARCHING, GATHERING


The Goal of Lean Improved product Q uality, C ost, D elivery; Improved

employee S afety and M orale ( 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,

LEAN THINKING with SIX SIGMA inventory Standard Work - improve quality, maintenance; simplify processes

Lean Kaizen Sequence

Processes can be transformed Distribution

in days, weeks or months, System Kaizen One-piece flow

but plan 1- 6 years Pull/Kanban Takt time

for the corporate Equipment Kaizen (TPM)

transformation 3P, Autonomation

Leveled Production Line Balancing

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

AWARENESS

FLOW: AIWs (Gemba Kaizen) Factory Layout Kaizen

Standard Work: Operator Methods

process simplification, quality and maintenance

- 5S - Organize the workplace


The Lean Toolbox 17. SIX SIGMA 1. Value Stream Maps 18. Chaku-Chaku / Load-Load 2. Rapid Improvement (Kaizen)

Events 19. Heijunka / Load Leveling 3. Education 20. Bottlenecks 4. Employee Involvement 21. Point-of-Use Delivery 5. Metrics and Alignment 22. DFMA 6. Flow Cells 23. Control Charting 7. Standard Work 24. Pareto Analysis

- Capacity Analysis 25. Histograms - Takt Time / Cycle Time 26. Root Cause Analysis

Standard Ops Worksheet 27. 5 Why's - Production Control Board

28. Hypothesis Testing 8. 5S / Visual Controls 29. Supply Chain Management 9. Pull/Kanban Systems 30. Critical Chain Project 10. Brainstorming Management 11. Prioritization 31. 7 Quality Control Tools 12. Spaghetti Chart 32. 7 Management & Planning

Tools 13. Poka-Yoke / Mistake Proofing 33. Nominal Group Technique 14. Set-up Reduction

Total Productive Maintenance with SIX 34. Production Process 15. LEAN THINKING SIGMA Preparation (3P) 16. Change Management

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**


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 LEAN THINKING with SIX SIGMA

Team Charter Dates: VSM

Impact RIE Senior Management Sponsor:

Project Value Stream Champion: Just Do It Difficulty

Project Description:

Team Leaders and Members:

Potential Implementation Costs:

Business Reason for the Project: Project Constraints (Financial, Personnel, Equipment):

Expected ROI:


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.

The VALUE STREAM

Design Procure Make Sell Customers Suppliers

A Primary Focus is TIME,

Product and / or Service Flow

Information Flow: Quickly SIGMA Directions In All

Define the Boundaries start stop

What keeps you awake at night?

Value stream customers inputs outputs suppliers

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


Value $tream Map - Finding the WA$TE 90/60/30 day

Production Control 6 week forecasts SUPPLIER forecast CUSTOMER

Daily MRP Weekly Order

Fax 18400 pieces/month 500 ft coils -12000- L Daily Ship - 6400- R Schedule Weekly Schedule Tues. & Tray = 20 pieces

Thurs. 2 shifts

Ass'y Ass'y Stampin S. Weld S. Weld Shipping #1 #2 g #1 #2 I I I I I I 1 1 Staging 1 1 1 1600 L 2700 L Coils 1100 L 1200 L 4600 L

850R 1440R 5 days 600R 640R 2400 R

C/T=40 sec C/T=1 sec C/T=39 sec C/T=46 sec C/T=62 sec .0014% VA C/O = 0 C/O=10 m C/O = 0 C/O=10 m C/O=1 hour

Uptime = Uptime = Uptime = Uptime = Uptime = 100% 85% 100% 80% 100%

27,600 *2 27,600 *2 27,600 *2 27,600 *2 27,600 *2 sec. avail. sec. avail. sec. avail. sec. avail. sec. avail.

PLT = 23.6 days 5 days 7.6d 1.8d 2.7d 2d 4.5d 1 sec 39 sec 46 sec 62 sec 40 sec Process Time

(VAT) = 188 sec. LEAN THINKING with SIX SIGMA

Current State Value Stream Map

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

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

Identify, remove and repair failed, broken, or Core Manpower Requirements Productivity (hours per unit) Improve Harrier Maintenance Flight ON DEMAND

obsolete parts for Harrier W eapon Platform, Operational Risk Operating Performance Throughput Time DEFECT FREE

functional test, and reapply finish Quality and Flight Safety On Time Delivery 1 BY 1

Cost of other Platforms Floor Space LOW EST COST

LEAN THINKING with SIX SIGMA Implementation Pan Future State

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 LEAN THINKING with SIX SIGMA

Distance traveled: 1.2 km

Spaghetti Charts Communication and Motion


Project Name IN CHARGE OF FOLLOWUP:

% 28 Status of overall completion =

Plan Dates

ACTION Who Comments %Status

Start Finish

PROJECT SUMMARY:

In charge C COMPL of

Action Department Comments BEGIN ET 40 this

E item

ASD / 7/3/200 7/10/200 AAD to AJD:Follow-up this action item and 1 100

MZU 7 7 report completion

AJD / AAD to AJD: Make sure this is done

ASD 7/3/200 8/10/200 2 MAS: You can decide where the 5

/ 7 7 location of the hotline be.

MZU

ASD / 7/3/200 8/10/200 3 100

MZU 7 7


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 LEAN THINKING with SIX SIGMA

Kaizen = continuous improvement

RAPID IMPROVEMENT

At the end of the week, a new process should be in place.

Anything else is not rapid improvement. It's a "STUDY".


Team Charter Dates: VSM

Impact RIE Senior Management Sponsor:

Project Value Stream Champion: Just Do It Difficulty

Project Description:

Team Leaders and Members:

Potential Implementation Costs:

Business Reason for the Project: Project Constraints (Financial, Personnel, Equipment):

Expected ROI:


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


RIE Preparation Checklist Rapid Improvement Events

PREPARATION By: Date: Prep. % COT:

Team:

(% COT: ) 2nd Week Before Event: (% COT: ) 1st Week Before Event: (% COT: ) 3rd Week Before Event:

1) Identify the suppliers and inputs 1) Communicate key metrics, targets, and 1) Select the Value Stream from the 2) Identify the customers and outputs tools to be applied to all team participants Enterprise 3) Identify the start / stop boundaries 2) Train team participants on improvement Transformation Plan. 4) Gather facts and data to populate starting process and tools to be applied 2) Select the target area from Value Stream numbers on Target Progress Report 3) Identify what "triggers" work Analysis. 5) Populate the Target Progress Report 4) Double check availability of all resources: 3) Determine the focus - which Lean tools 6) Identify top three improvement metrics - equipment or furniture moves will be applied? 7) Establish improvement targets on top three - computer or phone moves 4) Identify the Team Leader, Co-Leader, and metrics, be aggressive - 5S, shadowing, kitting Team Members. 8) Meet with affected stakeholders to - Production Control Boards 5) Assure at least 1/3rd of participants are communicate Improvement Event schedule, 5) Communicate with affected area, review from the affected area. metrics, targets, and tools to be applied items listed on flip chart and ask for 6) Clear participants calendars for the 9) Set a flip chart up in affected area, ask clarification, make sure these are added to Improvement Event Week. stakeholders to put ideas for improvement Improvement Newspaper 7) Complete the Team Roster. on flip chart. Start Improvement Newspaper. 6) Make sure team break-out area is ready: 10) Capture flow stopper information from - flip charts, markers, post-its, VSA blanks Production Control Boards - forms, stop watches 11) Confirm the availability of any special 7) Make sure Process Champion is set resources for: to give opening remarks on Monday - equipment or furniture moves morning - computer / phone moves 8) Make sure Process Champion is available - 5S, shadowing, kitting for Team Leader Meetings Monday - - Production Control Boards Wednesday 12) Obtain any special data collection 9) Schedule Final Presentation with Process instructions from your Coach such as: Champion and appropriate leadership - Information from previous Improvement 10) Plan working lunches Events 11)Confirm all team participants are going to - Customer critical to quality issues be available full time for entire event - Safety data 12) Confirm Target Progress Report and 13) Confirm all participants are still available Team Roster are complete for entire Event week


RIE Daily Checklist Rapid Improvement Events

TEAM DAILY CHECKLIST

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. 2. Assign a team member to each Stakeholder. 2. Assign a team member to each Stakeholder. (loading diagram)

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) and Kaizen Newspaper. 5. Create production control board. 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. Standard Work Sheet, Production Control Board, 4. Take a "Waste Walk", to further identify opportunities. and Kaizen Newspaper. 7. Off shop floor by 1:00. 7. Daily recap.

5. Daily recap. 8. Create daily plan for Wednesday. 8. After area pictures and Team picture. 8. Daily recap.

6. Meet with Stakeholders and review progress.ideas. 9. Create daily plan for Thursday. 9. Team Leader/Co Leader. How late do we stay? 9. Prepare final presentation.

7. Create daily plan for Tuesday. 10. Complete Team/Event binder. 10. Daily Team Leader meeting. 10. Team Leader/Co Leader. How late do we stay?

8. Team Leader/Co-Leader. How late do we stay? 11. 6-S meeting area. 11. 6-S meeting area. 11. Daily Team Leader meeting.

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 items to 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 require

follow up reports on LEAN THINKING

with SIX increments. SIGMA follow up reports on progress at a minimum progress at a minimum follow up reports on progress at a minimum follow up reports on progress at a minimum of two hour increments. of two hour increments. of two hour of two hour increments.

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 LEAN THINKING with SIX SIGMA

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

5S Workplace Organization

1. 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.


Visual Controls A 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


The 5S's Low Level of 5S 1. Sort

Needed from the unneeded

2. Shine Clean, scrub, and fix

3. Set in order High Level of 5S A place for

everything

4. Standardize A plan to sustain

5. Sustain Following through


Standard Work Board

TAKT time & Delivery Performance Measure

Andon Flag

Cell Key Measures

6S Layout and Assignments

Corrective Action Matrix and Plan

Standard Work Bar Chart LEAN THINKING with SIX SIGMA

Shadow Hand Tools


Signal Lights


Visual Management

Foot-printing Labeling Shadowing

LEAN THINKING with SIX SIGMA Production Color Schemes

Control Boards Striping

Visual Controls


Other Visual & Audio Controls

Visual and Audio controls answer questions before they are asked.

1. Clock 2. Traffic lights with a timer 3. Traffic Lines/ lights/signs 4. Sounds announcing break time 5. Call to Prayer 6. Score boards at sporting events 7. Arrival/Departure boards in airports 8. Lights indicating machine or process condition 9. Lights and siren on emergency vehicles 10. Gauges on medical & industrial equipment 11. Big teeth on a snarling lion 12. Take-a-Number systems 13. Colored caps on milk bottles


Point-of-Use Strategy: 7 Elements of Surgery

Hand Information Tools

Instruments

Power Tools

7 Elements Of Surgery

Supplies

Fixtures

Fasteners


Supermarket Pull System

Kanban Kanban

Customer Supplying Process Process product product

Supermarket

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. LEAN THINKING with SIX SIGMA

Pull/Kanban Systems

Pull

On Demand - Upstream Supplier

- Downstream User

- Visual Trigger

Sequenced - Use FIFO lanes

Replenished - Create supermarkets with SIX SIGMA

LEAN THINKING

Traditional vs Cellular Flow

Traditional flow Cellular flow Dept 1

4 3 Dept 2 DONE

OUT IN OUT

IN IN

1 2 Dept 3

Dept 4 Demand paced production

IN OUT IN

Value-adding steps in order OUT

No stops, piles, or back-ups

Flexible DONE

Less transportation

Less work-in-process


U - Shaped Cell

Andon

RM

FG


Other Important Lean Tools

1. Setup Reduction 2. Standard Operations 3. 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 reduction 7. Mistake proofing (Poke Yoke) (Example:

mobile SIM card) 8. 5 Whys 9. Self-Inspection and Acceptance (SI&A)


Lean Implementation Sequence

Distribution System Kaizen

One-piece flow Pull/Kanban

Takt time

PEOPLE

Equipment Kaizen (TPM) 3P, Autonomation

Leveled Production Line Balancing

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

AWARENESS

FLOW: AIWs (Gemba Kaizen) Factory Layout Kaizen

Standard Work: Operator Methods

process simplification, quality and maintenance

- 5S - Organize the workplace


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 LEAN THINKING with SIX SIGMA

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 THINKING with SIX SIGMA rates because we

high defect LEAN

TOLERATE high defect rates

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 LEAN THINKING with SIX SIGMA

Implementation Metrics Leading Indicators

1. Cycle Time

2. Inventory (amount, turn rate, IRA)

3. Productivity

4. Square Feet (foot print)

5. Set-up Time

6. Product Lead Time Lean is data driven

7. People Travel

8. Product Travel

9. Volume

10. Crew Size

11. Safety/Ergonomics LEAN THINKING with SIX SIGMA

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. 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 LEAN THINKING with SIX SIGMA

Reasons Lean Fails 1. 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 Map 8. No implementation or sustaining plan (PM) 9. No customer and supplier involvement in the

improvement process. 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 LEAN THINKING with SIX SIGMA

Managing Resistance Leading Change Traditional Situation

Increasing Increasing Increasing Increasing Neutral Neutral cooperation resistance resistance cooperation

Critical mass

Early adopters Anchor

Strong pull draggers from early "Uncommitted adopters Mass"

You cannot ignore the anchor draggers!

Management Management attention attention

"The focal point really shouldn't be on THINKING with SIX SIGMA but on getting people

LEAN managing resistance,

excited about the benefits of the change." -- Jeff Hiatt, president and CEO of Prosci

How Do You Know When You are Lean?

40% reduction in assembly hours per unit

60% reduction in lead time You never get Lean,

92% reduction in line move time with SIX SIGMA LEAN THINKING you only get Leaner

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.


Lean in Project Mgt and Construction

Studies 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 Services Saudi Aramco, Saudi Arabia

LEAN THINKING with SIX SIGMA Tel. 874-3800 (Work)

International email: [email protected]

BOEING 737 FINAL ASSEMBLY BEFORE

LEAN IMPLEMENTATION


The Boeing 737 Moving Line


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 LEAN THINKING with SIX SIGMA

SIX SIGMA

It is a process capability measure

It is a commercial program

Packaged at Motorola in 1985

May lead to "Analysis Paralysis"


Lean Focus - The 8 Wastes Lean 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 = defects

7. 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.


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.


Lean Six Sigma Process Improvement

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


Dissecting DMAIC

Define Measure Analyze Improve Control

the process: the process gains: what is important

Analyze Data Ensure Solution is to the customer?: Sustained Identify Root Causes Project Selection

Team Formation

Establish Goal

the process performance measures:

Prioritize root causes how well we are doing?:

Innovate pilot solutions Collect Data

Validate the improvement Construct Process Flow

Validate Measurement System LEAN THINKING with SIX SIGMA

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.


Waste & Process Variation - The True Costs Scrap

Inspection Rework Traditional Cost of Field Modifications Warranty Poor Quality (COPQ)

Penalties & damages (measured) Rejects

Hidden Cost of Lost sales Poor Quality (COPQ) times

Long cycle Overtime

Margin slippages (measurable) Late delivery

More receivables Travel & Living Expenses

Lost Opportunity Longer Set-ups Excess inventory

Expediting costs Lengthy Installs (intangible)

Customer Productivity Loss Sales compromises

Engineering Change Orders Lost Customer Loyalty

Customer Dissatisfaction Employee Morale, Productivity, Turnover


Understanding & Reducing Variation

# of Goals

Lower Specification Upper Specification Limit LEAN THINKING with SIX SIGMA Limit

What Does Sigma Level Mean?

Example

Lower Upper Specification Specification

Customers have Limit Limit (customer) (customer)

a target in mind, Target

but will allow some variation within the Spec Range



Example

Upper Lower Specification Specification Actual Limit Target Limit

Measurement has Considerable

Variation Defects - Resulting in Defects

Scrap, Waste, Late Deliveries, and Customer Dissatisfaction



Upper Lower Specification Specification

Limit Target Limit How Capable is our Process to Produce within

Spec? Defects Defects

2 åSigma Defects % Level Per Mill. In Spec.

2 308,500 69.1

On Average it's OK - - it's a Variation issue On Average it's OK it's a Variation issue LEAN THINKING with SIX SIGMA

BEWARE OF AVERAGES


Lower Upper Specification Specification

Reducing Limit Limit

Variation is Clearly the Key

to Improving Process

Capability


3 66,800 93.3



Causes of Variation Include

Lower Upper a Variety of Specification Specification

Factors, such as: Limit Limit

1. Machines 2. People 3. Material 4. Environment 5. No Standard

Work. Sigma Defects %

4 åLevel Per Mill. In Spec. 4 6,200 99.4



Variation Causes Errors, which

Cause Defects, Lower Upper Specification Specification

which Lead to Limit Limit

Rework, and to Processes which

are not Stable Reliable, Repeatable, and Predictable.


5 233 99.98



Reducing Variation

Reduces Errors, Lower Upper Specification Specification

and the Limit Limit

Resulting Defects and Rework, and

therefore leads to Improved

Process Capability Sigma Defects %

6 åLevel Per Mill. In Spec.

6 3.4 99.9997


Variation = Unpredictable Processes

Work Order Process Mean

Improved Process

Existing Process

1 50 100 Output Variation in weeks

Contracting process

Material Delivery process

Time to sink a well

Wife's shopping bill

Wife's shopping time

Customers Remember the Extremes (Variation), not the Average LEAN THINKING with SIX SIGMA

ENTITLEMENT

Improved Process

Upper Mean Specification

Entitlement Limit

Existing Process

1 50 100

Output Variation in weeks

LEAN THINKING with SIX SIGMA LSS Helps Us Consistently Deliver the Best We Can Do.


sure Mea y Lower Upper

is a bilit Specification Specification

evel Limit Limit

6 åa L ss Capa Sigm roce

of P

Sigma Defects % Level Per Mill. In Spec.

2 308,500 69.1

3 66,800 93.3

4 6,200 99.4

5 233 99.98 LEAN THINKING with SIX SIGMA

6 3.4 99.9997

Practical Meaning of Six Sigma

3.8-Sigma 6-Sigma 3.4 defects per 3.8-Sigma 6-Sigma million

99% Good 99.99966% Good 99% Good 99.99966% Good opportunities

20,000 lost articles of mail per hour Seven articles lost per hour

5,000 incorrect surgical operations per 1.7 incorrect operations per week week

Two short or long landings at most One short or long landing every five major airports each day years

200,000 wrong drug prescriptions each 68 wrong drug prescriptions per year year


Six Sigma Project Management Checklist

Measure Analyze Improve Control Define Measure Analyze Improve Control Define

Develop solution options Identify Sponsor and other Create Fishbone Analyze Process Flow Perform Capability Improve control of Tie to defined Critical Path key stakeholders Analysis of improved

Value-added significant root causes Form project team defect process Re-design process to Team leader Collect Data steps Develop and Implement

Team members Ys (results) with Non value- obtain required a Control Plan capability Tour process Xs (data tags) added steps Complete Project Perform DOE as Opportunities Clarify project Evaluate Measurement Closure Package

Problem statement required Systems Analyze Data Update financial Goal statement Gage R&R, Graphical tools Evaluate options and select benefits statement as Process output = Y Hypothesis final solution Understand detailed required

Prioritization matrix Get OCD focal Define process process Tests Detailed process Interrelationship Determine measurement boundaries final evaluation

High level map system for improved process map w/ rework Digraph (if List best practices Identify lessons Create implementation plan (SIPOC) loops appropriate.)

Regression Update FMEA Define project boundaries Describe Process learned Resources Numerical Update financial benefits analysis Authority statement statistics Identify and collect Use SPC Charts

Contact Six Sigma Graphs: Time, Determine project timeline additional required data Hand off project to OCD for concurrence Identify CTQ Customer Hist., Pareto, etc. Identify significant Xs process owner

Create control Tie to root Create follow up Obtain buy-in / support for Requirements Define the Defect improvement actions chart cause analysis action plan Define defect Draw Conduct pilot / testing to Establish Process Develop Final report out

Standard verify results measure Capability conclusions DPMO or % Implement improvements Develop estimate of Perform FMEA template

Collect data to verify potential financial benefit if Defects Update charter as Calculate Z improvement project goal is achieved required

Communicate results Gain Sponsor Approval of Update Charter Develop Analyze as required Update Charter Project Charter report out

as required Identify Pull and Push Develop Define/Measure Standard Develop Improve report out Leveraging opportunities report out template

For Sponsor Standard template

Master Black Belt Project Champion

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 LEAN THINKING with SIX SIGMA

You Turn the Gears

# of Teams Chartered # of Events Value Stream

Penetration

ultiple Passes Full-Time Resources Discipline to the Process

Results Critical Mass Internal Experts Self-sustaining Lean Culture

DEPLOYMENT METRICS LEAN THINKING with SIX SIGMA

Leadership's Role Senior Leadership 1. 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 Workforce

6. Communicate

- Vision, Results, Lessons Learned


Leadership's Role

The Manager's Role 1. Help pick the right value streams, projects and teams 2. Follow the method

Remove barriers to change Have one plan

3. Clearly define roles and responsibilities 4. Support the Education & Training of your employees 5. 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.


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 LEAN THINKING with SIX SIGMA

The Results

REMEMBER: It is CONTINUOUS Process Improvement

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


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

Current State Process

Lean or Six Sigma Breakthrough

Defects, cost, l time, waste

Improvement Period

Future State Process

Time


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 LEAN THINKING with SIX SIGMA

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 THINKING with SIX SIGMA

LEAN

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


http://www.productivityinc.com/





http://www.nwlean.net/

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 LEAN THINKING with SIX SIGMA

SHUKRAN JAZEELAN

Cutting costs, improving quality, & speeding delivery through continous improvement

Education

Transcript of Cutting costs, improving quality, & speeding delivery through continous improvement