Lean six sigma overview al hammonds for eas 590 spring 08 l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 78

Lean/Six Sigma Overview Al Hammonds for EAS 590, Spring 08 PowerPoint PPT Presentation


  • 113 Views
  • Uploaded on
  • Presentation posted in: General

Lean/Six Sigma Overview Al Hammonds for EAS 590, Spring 08. Why are we here?. Why do Lean?. Lean Thinking. Lean Production = Toyota Production System (TPS) Identified in a five year ($5 million) MIT study of the worldwide automotive industry

Download Presentation

Lean/Six Sigma Overview Al Hammonds for EAS 590, Spring 08

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Lean six sigma overview al hammonds for eas 590 spring 08 l.jpg

Lean/Six Sigma OverviewAl Hammondsfor EAS 590, Spring 08


Slide2 l.jpg

  • Why are we here?

  • Why do Lean?


Slide3 l.jpg

Lean Thinking

  • Lean Production = Toyota Production System (TPS)

  • Identified in a five year ($5 million) MIT study of the worldwide automotive industry

  • Found that the production system used by Toyota was fundamentally different than traditional mass production


Lean thinking isn t new l.jpg

Lean Thinking Isn’t New

  • Lean thinking is more than lean production…it is a business philosophy.

  • Has roots back to Henry Ford’s production system.


Slide5 l.jpg

Key Definitions

FLOW

VALUE

  • Making product flow through production without interruption.

  • Giving the customer what they want, when they want it, and at the right price.


Slide6 l.jpg

Key Definitions

PULL

  • A customer demand based method of controlling flow of products or services by replenishing in short intervals.

STRIVING FOR EXCELLENCE

  • A culture in which everyone is striving to continually improve.


Typical m ass flow process maximize efficiency and economies of scale l.jpg

Typical Mass Flow ProcessMaximize Efficiency and Economies of Scale

Process 2

Inventory

Inputs

Outputs

Inventory

Process 1

Customer

Process 3

Rework

(Hidden?)

  • MEASURABLES

  • Each independent entity maximizes their efficiency

  • Batch Process – departments compete


Lean production flow process goal elimination of waste l.jpg

Lean Production Flow ProcessGoal: Elimination of Waste

Inputs

Process 1

Process 2

Process 3

Outputs

Customer

  • MEASURABLES

  • Performance is based on system effectiveness as a whole

  • Single piece or continuous flow


Slide9 l.jpg

How do you provide value to the customer and make a profit?


Defining value l.jpg

Defining Value

Value Added Activity

An activity that transforms or shapes material or information (for the first time) to meet customer requirements.

Non-Value Added Activity

Those activities that take time or resources, but do not add to the customer requirements.


Exercise l.jpg

Exercise

  • Identify examples of Value Added Activities and

  • Non-value Added Activities

  • associated with your work.


8 types of waste l.jpg

8 Types of Waste

Waste of

Correction

Waste of

Waiting

Waste of

Over-

Production

Waste of

Motion

FLOW

Waste of

Processing

Waste of

Inventory

Waste of

Material

Movement

Waste of

Intellect


Traditional approach l.jpg

Traditional Approach

Output

Output

Output

Waste

Output

Waste

This is not Lean

Cost Plus Mentality

Cost + Profit = Price

Output

Waste


Working toward lean l.jpg

Working Toward Lean

Output

Waste

Output

Waste

Output

Output

Waste

Waste

Working Smarter…

Not Harder

Today’s Reality

Price – Cost = Profit


Lean thinking tools l.jpg

Lean Thinking Tools

  • Identify and plot all steps required to do a process.

    • Challenge every step by asking the “5 WHY’s”

VALUE STREAM MAPPING

NOTE!! If there doesn’t seem to be a valid reason for any steps identified in the value stream, consider eliminating the steps from the process.


Lean thinking tools16 l.jpg

Lean Thinking Tools

  • 5S’s - Practices that create a workplace suited for visual control and lean manufacturing:

  • Sort (Seiri) = Keep only what is needed

  • Straighten (Seiton) = Put everything in order

  • Sweep (Seiso) = Clean everything

  • Standardize (Seiketsu) = Make standards obvious – everybody does it the same way

  • Sustain (Shitsuke) = Institutionalize and continual improvement.


Lean thinking tools17 l.jpg

Lean Thinking Tools

  • STANDARDIZED WORK

    This tool ensures that the best method of conducting each activity is identified and steps are taken to ensure everyone does it this way.

    • The right people

    • The right steps

    • The right sequence

    • Every time


Lean thinking tools18 l.jpg

Lean Thinking Tools

  • MISTAKE PROOFING (Poka-Yoke)

    Tools and techniques used to prevent people from doing things incorrectly. It can be a simple mechanical device or technique.

    • Get it right the first time

    • Set people up for success, not failure


Lean thinking tools19 l.jpg

Lean Thinking Tools

  • TOTAL PRODUCTIVE MAINTENANCE (TPM)

    • A series of methods to ensure that every machine in the production process is always able to perform its required tasks without interruption.

    • Targets key equipment.


Lean thinking tools20 l.jpg

Lean Thinking Tools

SET UP REDUCTION

  • On Time Delivery – gives the customers what they want when they want it.

  • Flexibility – ability to run different types of products.

  • Increased Capacity – provides more actual production time.

  • Cycle Time - reducing setup time allows lot size to be reduced, which drives reduced cycle times.

  • Costs - reducing Work In Process drives lower operational costs (carrying costs, scrap, rework, space utilization, etc.)


Lean thinking tools21 l.jpg

Lean Thinking Tools

  • LEVEL SCHEDULING

    The goal is to produce at the same pace every day minimizing variation in the workload.


Lean thinking tools22 l.jpg

Lean Thinking Tools

  • CELLULAR FLOW

    Machines or processes are side by side with very little inventory between them. The goal is efficient, continuous flow.


Lean thinking tools23 l.jpg

Lean Thinking Tools

  • OPERATIONS BALANCING

    Achieving the best arrangement of people, material, and equipment.


Lean thinking tools24 l.jpg

Lean Thinking Tools

  • TAKT TIME

    Takt time sets the pace of production to match the rate of customer demand (sales) and is the heartbeat of the lean system.

Effective Working Time

Customer Requirement

Takt Time =


Who should implement lean thinking principles l.jpg

Who Should Implement Lean Thinking Principles

  • Product Development Areas

  • Order Taking and Scheduling Processes

  • Manufacturing Operations

  • Logistics

  • Administrative Systems

  • Human Resources

  • ************ EVERYONE! ************


Lean implementation process l.jpg

Lean Implementation Process

LEAN LEVEL SCHEDULING

SET UP

REDUCTION

12-24 Months

PULL/CELL/ STANDARDIZED WORK

VALUE STREAM MAPPING

WASTE ELIMINATION

5-S/VISUAL CONTROLS

COMMUNICATE &

TRAIN

Leadership & Develop Strategy


Why do lean l.jpg

Why Do Lean ?

  • Companies implementing Lean Thinking report the following improvements:

    • Productivity increases 15%-70%

    • Rejects (PPM) decrease 50%-250%

    • Inventory turns increase 55% - 70%

    • Space required decreases 35% - 70%

    • Employee involvement increases 70% - 95%

    • Annual savings per employee $1,200 - $3,500


What will lean mean l.jpg

What Will Lean Mean?

  • You will attack waste in all its forms.

  • You will embrace and celebrate continuous improvement.

  • The only constant is change.


Slide29 l.jpg

  • Lean is a never ending journey. It is a systematic approach to the identification and elimination of waste and non-value added activities through continual improvement in all products and services.


Six sigma l.jpg

Six Sigma


The history of six sigma l.jpg

The History of Six Sigma

  • 1987: Motorola initiates Six Sigma

  • 1988: Some early successes and failures

  • 1993: AlliedSignal embraces Six Sigma

  • 1995: GE adopts Six Sigma (Jack Welch)

  • 1996: Six Sigma starts to grow

  • 2000: Six Sigma continues its evolution


Slide32 l.jpg

Cost of Poor Quality (COPQ)

What is COPQ ?

Quantify the size ($) of the problem in languagethat will have impact on upper management

Why is COPQ Important ?

Identify major opportunities for cost reduction

Identify opportunities for reducing customer dissatisfaction & associated threats to salability

Stimulate improvements through publication

Prioritize the opportunities


Why focus on copq l.jpg

Why Focus on COPQ?

Price Erosion

Profit

Profit

Profit

Cost of

Cost of

Poor Quality

Poor Quality

COPQ

COPQ

COPQ

Total Cost to

manufacture

Theoretical

Theoretical

Theoretical

and deliver

Costs

Costs

Costs

products

Which Feels Better??


The cost of poor quality iceberg l.jpg

The Cost of Poor Quality “Iceberg”

Traditional Quality Costs

RejectsAdministration

InspectionDisposition

WarrantyConcessions

Scrap

Rework

(tangible)

Additional Costs of Poor Quality

(intangible)

More Setups

Expediting Costs

Late Delivery

Lost Sales

Lost Customer Loyalty

Long Cycle Times

Engineering Change Orders

Lost Opportunity

Hidden Factory

(Difficult or impossible to measure)

Average COPQ approximately 15% of Sales


What is six sigma l.jpg

What is Six Sigma?

  • A philosophy?

  • A problem solving methodology?

  • A set of tools?

  • A metric?


Six sigma has four dimensions l.jpg

Six Sigma Has Four Dimensions

Philosophy

Metric

Tools

Methodology


Benefits of six sigma l.jpg

Benefits of Six Sigma

Cost-of-Quality decreased

- from 30.1% before 1988

- to 7.4% after 1993

Aim for:

- 8% Revenue Growth per year

- 6% Productivity Improvement per yearforever

Gross Savings of$1,225M in 1998


Some companies known to be formally applying the six sigma methodology l.jpg

Some Companies Known to be Formally Applying the Six Sigma Methodology

Motorola

Texas Instruments

AlliedSignal

General Electric

Sony

DuPont

Ford Motor Company

Polaroid

Dow Chemical

Lockheed Martin

Toshiba

Bombardier

Noranda/Falconbridge

CitiGroup

BMW

Xerox

Raytheon

Coca-Cola

ICI Explosives

Dell Computers

Seton Medical Centers

American Express

Maytag

Pioneer Hi-Bred International

Seagate Technology

Millard Refrigerated Services

Canadian Marconi

Avery Dennison

BBA Group PLC

Crane

Korean Heavy Industries

Nokia

Pechiney

Siebe

Thermo King

GenCorp

IBM

Maple Leaf Foods


Is 99 good enough l.jpg

Is 99% Good Enough?

99% Good (3.8 Sigma)

99.99966% Good (6 Sigma)

20k lost articles of mail per hour

Unsafe drinking water for almost 15 minutes each day

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

No electricity for almost seven hours each month

Seven articles lost per hour

One unsafe minute every sevenmonths

1.7 incorrect surgical operations per week

One short or long landing every five years

68 wrong prescriptions per year

One hour without electricity every 34 years


The goals of six sigma l.jpg

The Goals of Six Sigma

$

Customer Satisfaction

Yield Improvement

Defect Reduction

The bottom line: Higher net income


Six sigma is about leadership l.jpg

Six Sigma is About Leadership

20%

80%

Change Leadership

Technical Skills


Continual improvement l.jpg

Continual Improvement...

Ongoing efforts

Incremental improvement

Quantum improvement

Performance

Six Sigma Projects

Time


Performance umbrella l.jpg

Performance Umbrella

A Performance Organization

Change management

Continuous improvement tools

Lean manufacturing

Safety practices

Kaizen

ISO and QS-9000 practices

Statistical process control

Preventive maintenance

TQM

Six Sigma


Six sigma levels l.jpg

Six Sigma Levels

DFSS

Black Belts

Lean

Green Belts

White Belts

“Nike”

Sweet Fruit

Design for Manufacturability

Process Entitlement

Bulk of Fruit

Process Characterization

and Optimization

Low Hanging Fruit

Simple Tools

Ground Fruit

Logic and Intuition

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

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

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

We don't know what we don't know

We can't act on what we don't know

We won't know until we search

We won't search for what we don't question

We don't question what we don't measure

Hence, We just don't know


The infrastructure l.jpg

The Infrastructure


Roles l.jpg

Roles

  • Executive

  • Champion

  • Process Owner

  • Master Black Belt

  • Black Belt

  • Green Belt


Exercise47 l.jpg

Exercise:

  • You are the GM of a very successful cinema with many employees. You will be out of the country for three months and have asked your staff to fax you a weekly report each Monday morning. What information (measures) would you like to see in that fax?

Hollywood Inc. Weekly Report


Exercise48 l.jpg

Exercise:

  • You are heading to the cinema with some friends . . .

  • The movie you would like to see is playing in several cinemas in your area. All are about the same travel time from your home, charge the same amount, have the same stadium seating, and are showing movies at the same time. What criteria do you use to choose?


Critical to who s satisfaction l.jpg

Critical to Who’s Satisfaction?

A

A

Supplier Perspective

Customer Perspective

(Theatre)

(Movie Goers)

Management)

Good Popcorn

è

Ticket Sales

è

No Sticky Floors

è

Concession Sales

è

Clean Restrooms

è

Labor/Work Force Costs

è

Short Lines

è

Profit Reports

è

Good, funny, entertaining movies

è

Other...

è

. . . So why do such differences

in perspective exist ?

What does this imply for a Six Sigma Project?


Being customer driven l.jpg

Being Customer Driven

CTQs

Voice of the Customer

Critical to Quality Characteristics

Process Capability


Satisfying customers l.jpg

Satisfying Customers

Delighters(Increases consumer loyalty)

  • Performance

  • (Competitive differentiation)

Must Have’s

(Minimum requirements)

(based on Kano principles)


Maximizing customer alignment l.jpg

Maximizing Customer Alignment

Delivery

Cycle Time

Need

Price

Do

Cost

Quality

Defects


Culture change achieving critical mass l.jpg

Culture Change - Achieving Critical Mass

Team Members

Green Belts

Number of People

Black Belts

Master Black Belts

Implementation Time

Convert 30% and you’ve got a new organization!!


Team work l.jpg

Team Work

The Strength of the Wolf is in the Pack.


Advantages of teams l.jpg

Advantages of Teams

  • Greater knowledge & experience base

  • Different perspectives

  • More total person power

  • Social bond, affiliation, identification

  • Willing to take more risks

  • Synergy – whole is greater than the sum of its parts


Knowledge sharing l.jpg

Knowledge Sharing

Cross-functional Six Sigma Project Teams

Knowledge sharing triggered by sigma process benchmarks

Intranet-enabled best practices; real-time process metrics


Dmaic overview l.jpg

DMAIC Overview


Dmaic overview define l.jpg

DMAIC Overview - Define

  • Define the Customer, they’re Critical to Quality (CTQ) issues, and the Core Business Process involved.

  • Define who customers are, what their requirements are for products and services, and what their expectations are

  • Define project boundaries ­ the stop and start of the process

  • Define the process to be improved by mapping the process flow


What is a 6 sigma project l.jpg

What is a 6 Sigma Project

  • Hard $$

  • Fact based

  • Control plan

  • Systematic approach (apply DMAIC)


Problem solving comparison l.jpg

Problem Solving Comparison


Slide61 l.jpg

A Project’s Evolution

Pre-Project

Define Phase

Management

Project Champions

30,000 feet

Black Belt

20,000 feet

10,000 feet

TeamKick-Off Meeting

ProjectTeam

Landing

Potential Improvement Topics, Subjects, Ideas

Project Definition and Selection Sessions

Refinement w/ Stakeholders and diagnosis; enters project in database

Launch/”start” of project


4 types of project focus l.jpg

4 Types of Project Focus

s

Project cost savings focus

Process quality focus

  • Example:

  • Complete x projects to save $z

  • Example:

  • Critical manufacturing processes

  • Critical transactional processes

  • Critical engineering processes

  • Improving these will save/make $$

Problem focus

Product focus

  • Example:

  • Product 1

  • Product 2

  • Product 3

  • Example:

  • Biggest fire to address


Defining project metrics l.jpg

Defining Project Metrics

Primary

Metric

Business

Metric(s)

Secondary

Metric(s)

Financial

Metric(s)

Consequential

Metric(s)


Y f x l.jpg

Y=f(x)

Y = f (x1 + x2 + x3 + …+e)


Dmaic overview measure l.jpg

DMAIC Overview - Measure

  • Measure the performance of the Core Business Process involved.

  • Develop a data collection plan for the process.

  • Collect data from many sources to determine types of defects and metrics.

  • Compare to customer survey results to determine shortfall.


Slide66 l.jpg

Unknown

10 - 15

Measure

30 - 50

Analyze

8 - 10

4-8

Improve

Key Leverage

3-6

X’s

Control

Input Variables to be Investigated

Process Map

C&E Matrix and FMEA

C&E Matrix and FMEA

Output Variables (y)

some X’s listed.

Gage R&R, Capability

Brainstorming, FMEA,

C&E, Process Map

Prioritized X’s

(Step 6)

4 Block Tools

Screening DOE’s

Vital X’s

DOE’s, RSM

Quality Systems

SPC, Control Plans

Optimized Process


Variability is the enemy l.jpg

Variability is the Enemy

“Right the First Time” is

the most cost effective way

to achieve Customer Satisfaction

Variability

is theENEMY


The hidden factory l.jpg

The Hidden Factory


Normal distribution l.jpg

Normal Distribution

µ

Point of Inflection

1s

- ¥

+ ¥

68.26%

95.44%

99.74%


What is 6 sigma l.jpg

What is 6 Sigma?

USL = upper spec. limit

s = 1.0

s

s

s

s

s

s

16.0

10.0

Z = 6 sigmas


Practical interpretation of sigma scale l.jpg

Practical Interpretation of Sigma Scale

Being without electricity for...

% Good

Prob. of Defect

2 Sigma

69%

31%

9 days/month

3 Sigma

93.4%

6.6%

2 days/month

3.8 Sigma

99.0%

1.0%

7 hours/month

4 Sigma

99.4%

0.62%

4.5 hours/month

5 Sigma

99.98%

0.023%

10 mins/month

6 Sigma

99.9997%

0.0003%

9 sec/month


Benchmarking implications l.jpg

Benchmarking Implications

IRS - Tax Advice

(phone-in)

(140,000 PPM)

PPM

1000000

Restaurant Bills

DoctorPrescription Writing

100000

Payroll Processing

Order Write-up

10000

Average

Company

Journal Vouchers

Wire Transfers

1000

Airline Baggage Handling

Purchased Material

Lot Reject Rate

100

10

Best-in-Class

1

6

2

3

4

5

7

Domestic Airline Flight

Fatality Rate

Sigma Scale of Measure

(0.43 PPM)


Dmaic overview analyze l.jpg

DMAIC Overview - Analyze

  • Analyze the data collected and process map to determine root causes of defects and opportunities for improvement.

  • Identify gaps between current performance and goal performance

  • Prioritize opportunities to improve

  • Identify sources of variation


Dmaic overview improve l.jpg

DMAIC Overview - Improve

  • Improve the target process by designing creative solutions to fix and prevent problems.

  • Create innovate solutions using technology and discipline.

  • Develop and deploy implementation plan.


Design of experiments l.jpg

Design of Experiments


Dmaic overview control l.jpg

DMAIC Overview - Control

  • Control the improvements to keep the process on the new course.

  • Prevent reverting back to the "old way"

  • Require the development, documentation and implementation of an ongoing monitoring plan

  • Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives)


Six sigma is a tool box l.jpg

Six Sigma is a Tool Box


The bottom line l.jpg

The Bottom Line

The Highest Quality Producer is the

Lowest Cost Producer…How is this possible?


  • Login