Module 3 Section E: Continuous Improvement

Setup time reduction

- has a major impact on production costs and product variety. Aims to reduce waste (time and material) --employees being responsible for their own setups

Respect for people

- ensured safety for both customers and employees --increased moral.

Six sigma processes and tools

- "DMAIC": Define, Measure, Analyze, Improve, Control 1. Define - Determine nature of problem 2. Measure existing performance with data and facts about the causes of the problem 3. Analyze - study and determine root cause of problem 4. Improve process by effecting solutions 5. Control - Monitor the process util the solutions become ingrained. - Similar model - "DMADV" - Define, Measure, Analyze, Design, Verify

Eliminate waste with lean and JIT

- Both Lean and JIT emphasize elimination of waste. - waste - DEF: any activity that does not add value. A by-product of a process or task with unique characteristics requireing special management control - waste production can usually be planned and controlled. Scrap is typically not planned and may result from the same production run as waste. --EX: Toyota tracks waste in its production system. - "Toyota's Taiichi Ohno" - 7 "deadly" wastes - "Womack and Jones" - 8th waste is unused people skills. Overproduction is the most serious of the 8 wastes. - JIT and lean have wider application in SCM

Just-in-time

- DEF: Manufacturing based on planned elimination of all waste and on continuous improvement of productivity. It encompassses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery, and includes all stages of conversion from raw material onward. -- primary elements of JIT are to have only the required inventory when needed --to improve quality to zero defects. --emphasis on eliminating time in queues at work centers.

Six Sigma

- DEF: Methodology that furnishes tools for the improvement of business processes. To decrease process variation and improve product quality. - Six sigma aims to achieve near-perfect products --get close to zero defects with outer limit of 3.4 defects per million "opportunities" --Defects are anything that annoy the customer. - customers may have more than one expectation of a product. --EX: ATM machine - customer expect the machine to be online, easy instructions, short wait time, deliver correct amount (4 opportunities for a defect per visit). Challenges - what determines a defect? - setting a meaningful limit on variability (what is acceptable wait time? 30 seconds? 1 minute?)

Total productive maintenance (TPM)

- DEF: Preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities. - TPM aims to reduce mistakes and accidents --seeks to involve workers in all departments

Process Map (7 Basic tools of quality)

- DEF: diagram of the flow of a production process or service process through the production system. Symbols are used to designate processing, flow directions, branching decisions, input/output, and other aspects of the process. - Mapping the process helps members of an improvement team identify every significant aspect of an inefficient or ineffective process and then locate the problem areas. - carry out process mapping by scheduling it as a brainstorming session for the improvement team. Using Post-it notes, each team member individually lists every task he or she can identify in the process. Team members stick the notes with the task listings on the chalkboard, one person at the time, while others continue thinking and writing.

Control Chart (7 Basic tools of quality)

- DEF: graphic comparison of process performance data with predetermined computed control limits. - statistical process control - DEF: application of statistical techniques to monitor and adjust an operation. --data in control chart usually consists of samples from a regular sequence in a production process. - upper control limits (UCL) and lower control limits (LCL) - Straight forward Control chart tracks numbers, such as a size of a component. Control limits would establish the max and min variance in terms of a measure such as millimeters. --another type of chart might record %s (ex: event occurances)

Total quality management (TQM)

- DEF: management approach to long-term success through customer satisfaction. - TQM is based on premise that management will support the ongoing improvement of every process involved in the development and distribution of a product. Key premises of TQM 1. Management must be committed participants in quality initiative. "Walk the TQM talk" and be role models 2. Understood by entire workforce. Doubles the enthusiasm and leads to reduced costs and increased quality 3. Focuses on customers and puts their needs in the forefront of every discussion about improvement. 4. Suppliers are considered partners 5. need for Standard performance measures

Lean objectives

- In lean SCs, orgs find suppliers whose methods will synchronize with lean requirements and develop long term relationships --educating suppliers to be willing to play role in creating value for customers. 1. Eliminate waste in business value streams - eliminate processes that add cost without adding customer value - reduce distances that parts and employees have to travel to avoid wasted time and wasted steps 2. Meet customer demand 3. Increase velocity - velocity - DEF: relative speed of all transactions, collectively, within a SC community. - maximum velocity is most desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers. 4. Reduce need for working capital - working capital is increased because of reduced inventory and improved productivity 5. Increase inventory turns 6. Gain market share - competitive advantage and leverage 7. Increase profitability - occurs when non-value-added activities are reduced and volume is added without adding resources. 8. Develop the workforce - improved job design, training opportunities, more challenging work, more responsibility and participation at all employee levels, teamwork. 9. Produce products and services with perfect quality

Aspects and impacts of analysis

- Often companies are unsure what metrics to use to calculate the impacts they are having on the aspects. - Companies can begin by using the performance indicators developed by the Global Reporting Initiative or employ criteria from the Dow Jones sustainability Index and the Carbon Disclosure Act. - Over time orgs will strive to identify its impacts that span multiple issue areas. - an org's sustainability report presents information relating to aspects spanning in multiple issue areas.

Best quality

- One-piece or continuous flow improves quality because the next process uses the piece shortly after it has been produced at the previous process. There will be very few pieces produced with a defect because a defective item should be found soon after it is made.

House of Toyota

- framework commonly used to explain the entire scope of lean. --created by "Taiichi Ohno and Eiji Toyoda" - Metaphor of a house was used to convey stability --implies stable demand and processes through leveling, standardized work, and processes improved through kaizen

Sustainability scorecards

- These scorecards enable orgs to target and track the best opportunities for improvements in energy, water, pollution, and waste reduction targets across their SC.

Activity network diagram

- aka arrow diagram or critical path method chart - tool to identify the required order of tasks within a manufacturing process or project. --primary benefit is to convey dependencies and simultaneous activities. - 1st task is recorded on the left side of the diagram.

Scatter Chart (7 Basic tools of quality)

- aka cross plot, scatter diagram, or scatterplot. - tool for showing the relationship of 2 variables in terms of whether they are interdependent and to what extent. - Y axis is dependent variables. --EX: Increase in Y is dependent on an increase in X. If X can be controlled so can Y. --increase in task competency could be linked to an increase in the number of hours of task training received.

Relationship diagram

- aka interrelationship diagram - illustrates cause-and-effect relationships and is particularly useful for evaluating the links between different aspects of a complicated issue. - ideas that a team generates are placed in their own respective circles and clustered according to how they may relate to each other. Goals: - identify major cause ( most arrows going from a bubble) - most interrelated cause (most arrows going in and out)

Just-in-Time

- allows delivery for the right items at the right time to the right place in right amounts --heartbeat of such a synchronized system is called "Takt time" --takt time = available production time / customer demand

Jidoka

- automation with a human touch - intellegent automation - autonomation - ability to stop production lines, by human or machine in the event of problems with equipment. --specially equipped machines that stop a process immediately when a problem occurs and signal for help. --prevents defective products from being made - Poka-yoke - mistake-proofing or error-proofing --"poka" - error --"yokeru" - to avoid --detect abnormal conditions and stop the process --EX: car key that can only be inserted one way. - in-station control - sequence when a problem arises. --"Andon" - problem display board that allows operator to identify the problem.

Histogram (7 Basic tools of quality)

- bar graph that displays the frequency distribution of measurement data such as dimensions, temperature, weight, etc. --shows the amount of variation within a process --frequency is shown on the y axis. variation is shown on the x axis - goal is to identify: 1. surprises like unnatural distributions. - Twin peaks indicate that data are coming from 2 or more sources, like different shifts or production equipment 2. Variation of bar graphs fall within or outside of specs, indicating the amount of variability.

Standardized work

- compared to steps in dance - defines tasks to achieve an optimum process in the time available. - Kaizen - DEF: continuing improvement involving everyone (managers and workers). Kaizen relates to finding and eliminating waste in machinery, labor, or production methods.

Drum/buffer/rope

- constraint as a drum - drummers beat as the system's speed. - buffers - system can keep functioning even if production slows/halts - rope - scheduler that pulls orders through the system.

Theory of constraints (TOC)

- developed by "Eliyahu M Goldratt" - constraint - DEF: factor that prevents a system from achieving a higher level of performance with respect to its goal - TOC should be the focus of improvement efforts --constraint should be operating at a maximum speed --no benefit from speeding up the processes before or after the constraint.

Elements of JIT for continuous improvement

- inventory is evil - continously improving all aspects of the plant and the SC to eliminate inventory, waste, and variability. - JIT SCs "pull" materials --alternative is to push items from one point to the next before they are requested, so they wait in warehosues or queues. 1. Suppliers - building long-term relationships with a limited number of suppliers who are willing to incorporate JIT principles into their own businesses. - JIT suppliers deliver on time, ships only quality goods that require no inspection, and reduces inventory in warehouses and in transit. 2. JIT layout - ftys that minimize distances and maximize flexibility. - "work cells" focusing on product families. This minimizes the distance the products travel through production and ideally, allows production of one unit at a time in response to an order - Equipment is designed to be movable - workers are cross-trained for more flexibility. 3. Inventory reduction - "Inventory is evil" but necessary evil. Reducing inventory to the bare minimum necessary for efficient operation. System must work perfectly to avoid breakdowns (no safety stock) - finds ways to eliminate variability and defects so the system will work without inventory buffers. - lot sizes kept small to avoid accumulation of inventory and that brings down costs of holding and handling items in storage or in queues. 4. Scheduling - widely communicated within orgs and along the SC, improving suppliers ability to be responsive to orders. - 2 types: --Level: small batches of constantly changing items (production levels with demand). Requires reduction of setup time. --Kanban: display cards to signal that a work site is ready for new materials. One station is close enough to the next that a visual signal will suffice to trigger a delivery. 5. Continuous Job improvement - responsibility for process improvement rests upon the workers closest to the process, so those employees take on supervisory responsibilities. - emphasis on cross-training to boost employees skills and knowledge. Jobs too, are expanded and enriched to increase the challenge to employee.

SUSTAINABILITY TOOLS

- it is only through formal, standardized monitoring of suppliers and by using generally accepted social and environmental reporting processes that orgs can remain aware of the actions of their suppliers.

Lean SC thinking

- lean production - DEF: emphasis on the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. --identifying and eliminating non-value-adding activities in design, production, SCM, and dealing with customers. --hiring multiskilled workers --use of highly flexible, increasingly automated machines --large variety of output --set of principles and practices to reduce cost through the relentless removal of waste. - Henry Ford was 1st person to an entire production process - "Flow production" --lacked flexibility - Toyota revised Ford's concepts to provide both continuity in process flow and a wide variety of product offerings. --became known as Toyoto Production System (TPS). - supplier of retail goods to a major retailer can "lean" its SC by using POS data from its customers to create replenishment orders to ship the right amount of product directly to each store. - Lean initiatives are fueled by a specific set of tools and techniques.

Lowest cost

- least amount of waste will result in the lowest costs. If standard cost accounting is used for lean projects, the results will actually make it appear as though many lean efforts are having a seemingly negative financial effect of the org. --Traditional management focused on planned vs actual direct costs and overhead. Lean accounting focuses on delivery to the customer - Lean metric - one that permits a balanced evaluation and response - quality without sacrificing qty objectives.

Leveling

- load leveling, capacity smoothing, or level loading. --DEF: Spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable. Although both material and labor are ideally level loaded, specific business and industries may load to one or the other exclusively. - heijunka - Japanese term to leveling - DEF: an approach to level production throughout the SC to match the planned rate of end product sales

CONTINUOUS IMPROVEMENT PHILOSOPHIES

- many related to total quality management (TQM) 1. Lean - quality in the product and processes using empowered teams - reduction of waste and redundancy - Just-in-time (JIT) 2. Six Sigma - enhancing the customer experience by reducing the number of defects in a process until they approach statistical insignificance 3. Theory of contstraints (TOC) - increasing a system's "throughput" by identifying the slowest element in the system (the constraint) and improving that element - TOC is inherently a continuous improvement strategy Total quality management (TQM) - meeting both internal and external customer expectations

Cause-and-effect diagram (7 Basic tools of quality)

- method of organizing factors (causes) and subcauses that affect a problem or process being investigated (effect). --may also be called an "Ishikawa diagram" or a "Fishbone diagram" --goal: to identify all of the possible causes of an effect and then select the most likely ones for further investigation. - Eliminating the underlying root cause of a defect can bring a process into conformance with the six-sigma limit - EX: training to improve employee skills will be suggested as a solution for a problem, when in fact employee skill or understanding is not the real source of the difficulty. - Japanese method "five whys" - getting to the root cause of a problem based on the theory that answering a question about the causation 5 times will lead you through the false causes to the real one.

Culture of continuous improvement

- org leadership must relinquish hierarchical authority and create a culture of learning and experimentation to support continuous improvement. --starts at the top

Value stream mapping

- paper and pencil tool that helps you to see and understand the flow of material and informaiton as a product or service makes its way through the value stream. --similar to process mapping in six sigma --tends to display a broader range of SC processes --receiving raw material to delivering finished goods. --sketches all the stops in a production or service delivery process --includes the management and information systems that accompany the process - begin with the drawing of the process and then overlay a map of the information flows that support the process. This provides a picture of the current state of the SC. - draw a future state map that eliminates all wasteful activities. - powerful yet simple tool that does not require advanced technology and yet provides a way to link reporting requirements, stakeholders from multiple functions, managers and staff, and metrics to sustain a lean initiative across the entire SC.

Shortest lead time

- queue times often shrink significantly. The result is typically a short lead time to the customer.

5 S's

- refers to a workplace org method. Make everything about the workplace orderly and clean and keep it so. --create a workplace suitable for lean production. 1. Seiri (short) 2. seiton (simplify) 3. seiso (scrub) 4. seiketsu (standardize) 5. shitsuke (sustain)

Pareto Chart (7 Basic tools of quality)

- shows frequency of items in a data set -- 80% of quality defects come from 20% of causes. By identifying the significant few and separating them from the trivial many, team will be better prepared to focus its resources efficiently. - Pareto's law - "Vilfredo Pareto" - "80-20 rule" - 80% of effects come from 20% of possible causes - Pareto charts can be applied to any measurable data (ex: currency, units, time) -- 80% was attributable to problems with finish as opposed to weight or shape.

Life cycle assessment (LCA)

- technique to asses the environmental aspects and impacts in an org's product LCA Involves: 1. Compiling an inventory of relevant energy 2. Evaluating the potential environmental impacts 3. Interpreting the results to help the org - LCA is a cradle-to-grave approach for assessing industrial systems. - Begins with gathering of raw materials to create products and ends at the point when all materials are returned to the earth. - evaluates all stages of the product's life, providing a comprehensive view of the environmental aspects that are often overlooked or not considered in more traditional analyses.

Affinity diagram

- tool for organizing a large number of brainstormed ideas by employees striving to solve a particular issue. --participants provide anonymous ideas and suggestions to gauge the seriousness of the issue. - begins with a discussion leader presenting the topic --employees then brainstorm, recording each idea on a slip of paper. Ideas are posted in one place by category or theme.

Matrix diagram

- tool for showing the relationships between 2 to 4 groups of information, strengths of those relationships, and how those variables interact and respond to each other.

Tree diagram

- tool that delineates tasks and activities in increasingly finer detail in order to meet a specific goal. --goal branches out into more detail.

Matrix data analysis chart

- tool to show the relationship between groups of information - 2 variables against which product lines are being measured are opacity and insulating properties. The closer the product line point is to the positive end of each variable, the stronger the feature is for that line.

Check Sheet (7 Basic tools of quality)

- used to summarize a tally count of event occurrences such as the frequency of certain defects in a product in a specified period of time. - this is often the starting point in continuous improvement projects that can then be further explored using other CI tools. --critical to ensure that the observations recorded are representative and within sufficient time.

Gap analysis

- using G3 or G3.1 Guidelines to get to G4 guidelines - to help the org identify what new data to collect and present in its G4 repor - Must compare the differences between the requirements of these versions and prepare their reports accordingly. Key differences between G3 and G4 versions. In G4 version: 1. focus is on materiality. org must determine all relevant material aspects 2. Standard Disclosures require reporting on the decision-making process 3. Org must report according to the Core or Comprehensive level. (not A,B,C levels)

Process decision program chart

- visually captures things that might possibly go wrong in a plan being developed. --EX: decision to increase shelf space was mapped out to determine all the related points that could influence a sequence of decisions as to how to reach the goal of achieving a good allotment of space. used in 2 different manners: 1. identify measure that should be taken in order to avoid undesirable, intermediate consequences as progress is made toward the final desired result. 2. to design a plan to predict future foreseeable problems that can be resolved.

Elements of six sigma

- when process fails (more than 3.4 defects), six sigma offers a set of tools for developing solutions under the guidance of a six-sigma-certified employee 3 elements (customer, process, employee) 1. Customer - definition of quality is in the mind of the customer. 2. Process - process mapping or flow charting are techniques used to identify the unique steps in a process. - company must adopt the customer's mindset ("outside-in" view) - Goal: low errors and consistent performance. - Performance should remain very close to that number of errors an not show a great deal of variability. 3. Employee - Full employee participation. There are no irrelevant employees (or processes) - offer training at all levels. Six sigma initiatives typically are directed from the top but implemented "from below" - Training takes place at different levels. --black belt and master black belts are full time employees --Green belt are consultants or employees with other responsibilities.

7 NEW TOOLS of quality

1. Affinity diagram 2. Tree diagram 3. Matrix diagram 4. Process decision program chart 5. Relationship diagram 6. Matrix data analysis chart 7. Activity network diagram

4 Components of LCA

1. Goal definition and scope - Establish the context in which the assessment is to be made and identify the boundaries and environmental effects 2. Inventory analysis - Identify/quantify energy, water, and materials usage and environmental releases (air emission, waste) 3. Impact assessment - Assess the potential human and ecological effects of energy, water, and materials usage 4. Interpretation - Evaluate the results of the inventory analysis and impact assessment to select the preferred product, process, or service.

5 step TOC process

1. Identify the constraint - typical indicator is excessive amount of work in a queue. 2. Exploit the constraint - ensuring that the process is achieving the maximum output possible without major changes. 3. Subordinate other processes to the constraint - once constraint is at maximum efficiency, subordinate processes have to be adjusted accordingly, since the constraint determines the system's maximum output. - maintaining buffers ahead of the constraint so that it can keep functioning even if production slows down or halts ahead of it. 4. Elevate the constraint - org will ahve to invest in more significant improvements, such as purchasing new equipment or training staff 5. Repeat the cycle.

3 major areas of waste

1. Muda - synonymous with waste - any activity that consumes resources but creates no value 2. Mura - unevenness or inconsistency 3. Muri - overburened situation (employees) - Mura creates muri - Ex: org playing catch up and trying to make forecasted numbers as the end of a fiscal reporting period approaches. Demand is raised increasing Mura. This causes production to try to squeeze extra capacity. Standards are modified or stretched leading to Muri. This results in downtime, mistakes, backflows, and waiting. Muda is the waiting and corrections that result. - implementing lean and responding to demand events from downstream operations poses challenges.

7 Basic tools of quality (Traditional method)

1. Process map 2. Control chart 3. Pareto Chart 4. Cause and effect diagram 5. Histogram 6. Check sheet 7. Scatter chart In review - Continuously refine the processes of manufacturing - Incorporate improvement considerations - Define achievable goals - Make the workplace more empowering by involving everyone - increase productivity - Improve worker satisfaction - Train employees to identify waste

3 JIT basics

1. Waste reduction - through continuous improvement, JIT targets each of these conditions for step-by-step elimination. 2. Variability reduction - elimination of variability discovered in the system no matter what the source, internal or external. 3. Pulling materials into production - JIT takes the opposit approach to "pulls" items only when needed. --WIP doesn't move from one work center to another until a signal indicates that the time is right. --Lots sizes are kept small, and orders are entered more frequently. This reduces or eliminates an inventory wait. This brings up any quality problems to light quickly. --defective component can be discarded and another taken from the safety stock. In JIT there is no buffer, so there are no quick substitutions possible.

Kaizen event / Kaizen blitz

kaizen blitz - DEF: rapid improvement of a limited process area, for example, a production cell. Part of the improvement team consists of workers in that area. Objectives are to use innovative thinking to eliminate non-value-added work and to immediately implement changes within a week or less. --includes basic training, analysis, and design itself. --something of an anomaly --quick turnaround time allows for only superficial training in analysis and design methods without attention to the subtleties or tradeoffs. --most useful at the beginning of a lean or TQM initiative. --can also lead to negative consequences. kaizen event - DEF: time-boxed set of activities carried out by the cell team during the week of cell implementation. The kaizen event is an implementation arm of a lean manufacturing program. --event's success may lead to complacency rather than commitment to long-term reform

SUMMARY OT TRADITIONAL/NEW TOOLS

think about the following categories when using these tools: 1. Nonquantitative tools - process flow chart or mapping, cause-and-effect diagram, affinity diagram, tree diagram, process decision program chart, relationship diagram, activity network diagram 2. Combination tools - L shaped matrix diagram 3. Quantitative tools - Scatter diagram, Pareto chart, run chart, histogram, control chart