Process Management (LEAN and Six Sigma)

Kanban

"Signal" or "Card" in Japanese. Contains information passed between stations. Authorizes production or the movement of materials to the next workstation.

Six Sigma - 5 Step Plan (DMAIC Methodology)

- Define - Define the problem - Measure - Map out the current process - Analyze - Identify the cause of the problem - Improve - Implement and verify the solution - Control - Maintain the solution

Six Sigma Methodology

- Use of technical tools - Statistical quality control. - Seven tools of quality. - People involvement: - All employees responsible to identify quality problems. - All employees trained to use technical tools.

Developing a LEAN Six Sigma Supply Chain

1. Jointly Define Value. 2. Conduct Supply Chain Capability Analysis. 3. Develop Key Financial and Operational Metrics. 4. Identify and Implement System Improvements. - Value Stream Mapping (VSM).

The Elements of LEAN Manufacturing

1. Waste Reduction 2. LEAN Supply Chain Relationships 3. LEAN Layouts 4. Inventory and Setup Time Reduction 5. Small Batch Scheduling 6. Continuous Improvement 7. Workforce Empowerment

Producer's Risk (Type 1)

A buyer rejects a shipment of good quality units because the sample quality level did not meet standards.

Value Added Process

A process step that transforms or shapes a product or service which is eventually sold to a customer

Consumer's Risk (Type 2)

Buyer accepts a shipment of poor-quality units because the sample falsely provides a positive answer

Philips Crosby

Coined phrase "quality is free" as defects are costly Introduced Concept of Zero Defects Focus on prevention not inspection

Variable Data

Continuous (Weight)

LEAN Continuous Improvement (Kaizen)

Continuous approach to reduce process, delivery, and quality problems, such as machine breakdown problems, setup problems, and internal quality problems

Taichii Ohno and Shigeo Shingo

Created the Toyota Production System in the 1940s. Incorporated Ford's production system and other techniques to form the basis of what is now known as LEAN

Joseph M. Juran

Defined quality as a "fitness for use" Developed the concept of cost of quality

Pull Approach

Each stage in the supply chain requests quantities needed from the previous stage. No excess inventory generated. Reduced inventory exposes problems.

LEAN Inventory and Setup Time Reduction

Excess inventory is a waste Reducing inventory levels can create production problems Once problems are detected, they can be solved. The end result is a smoother running organization with less inventory investment.

Natural Variations

Expected and random (can't control)

W. Edwards Deming

Father of TQM Stressed Management's Responsibility for Quality Developed "14 Points" To Guide Companies in Quality Improvement

LEAN Supply Chain Relationships

Firms develop lean supply chain relationships with key customers. Mutual dependency and benefits occur among these partners

Lean Waste (Muda) Reduction

Firms reduce costs and add value by eliminating waste from the productive system. Waste encompasses wait times, inventories, material and people movement, processing steps, variability, any other non-value-adding activity.

Assignable Variations

Have a specific cause (can control)

"The Machine That Changed The World"

In 1990, the term "LEAN Manufacturing" first appeared in this book.

Attribute Data

Indicate some attribute such as color and satisfaction, or beauty

3 Elements of Lean

LEAN Manufacturing Total Quality Management Respect for People

LEAN Workforce Commitment

Managers must support LEAN Manufacturing by providing subordinates with the skills, tools, time, and other necessary resources to identify problems and implement solutions

LEAN Layouts

Move people and materials when and where needed, and as soon as possible Are very visual (lines of visibility are unobstructed) with operators at one processing center able to monitor work at another

Origin of Six Sigma

Originated by Motorola in 1979 "The real problem at Motorola is that our quality stinks!"

Manufacturing cells

Process similar parts or components saving duplication of equipment and labor Are often U-shaped to facilitate easier operator and material movements

Non-Value Added Process

Process steps that take time, resources, or space, but do not add value to the product or service

Uniform Plant Loading

Production schedule frozen for month. Also called "leveling" Helps suppliers better plan production.

Jack Welch

Six Sigma became famous when this man made it central to his successful business strategy at General Electric in 1995 Reported $200MM in savings in the first year of implementation (1996)

What is Six Sigma?

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. The goal of Six Sigma is to attain less than 3.4 Defects Per Million Opportunities (DPMO) Six Sigma is a structured and data-driven approach to drive such a near-perfect quality goal, i.e., "Zero Defects"

The Five-S's

Sort - Keep only necessary items in the workplace Set in order - Arrange items to promote efficient workflow Shine - Clean the work area so it is neat and tidy Standardize - Set standards for a consistently organizes workplace Sustain - Stick to the rules. Maintain and review standards.

Cause and Effect Diagrams

Used to aid in brainstorming and isolating the causes of a problem

Acceptance Sampling

When shipments are received from suppliers, samples are taken and measured against the quality acceptance standard. Shipment is assumed to have the same quality.

Six Sigma

an enterprise and supply chain-wide philosophy that emphasizes a commitment toward excellence and encompasses suppliers, employees, and customers focuses on reducing defects and variations

LEAN

an operating philosophy of waste reduction and value enhancement and was originally created as the Toyota Production System (TPS) by key Toyota Executives. focuses on eliminating wastes and improving efficiency

Flow Diagrams

annotated boxes representing process to show the flow of products or customers

Check Sheets

determine frequencies for specific problems

LEAN Small Batch Scheduling

drives down costs by: Reducing purchased, WIP, and finished goods inventories Makes the firm more flexible to meet customer demand Small production batches are accomplished with the use of kanbans

Pareto Charts

for presenting data in an organized fashion, indicating process problems from most to least severe

Kanbans

generate demand for parts at all stages of production creating a "pull" system

Value

is the inherent worth of a product as judged by the customer and reflected in its selling price and market demand is defined as anything for which the customer is willing to pay

Malcolm Baldrige National Quality Award

stimulates firms to improve recognize firms for quality achievements Establish guidelines so that organizations can evaluate their improvement and provide guidance to others

X Bar Chart

tracks central tendency of sample means

R Bar Chart

tracks sample ranges