Six Sigma Exam 1
Non Value Added Process
Process steps that take time, resources, or space, but do not add value to the product or service
Levels of Organization
- Level 1 = highest-level view of work in the organization (business view) - Level 2 = work that flows across several departments or within an entire department or work area (SIPOC) - Level 3 = a detailed view of a particular process (detailed process map)
Non-value-added steps
- Not essential to produce output - Do not add value to the output - Include: • Defects, errors, omissions • Preparation/setup, control/inspection • Over-production, processing, inventory • Transporting, motion, waiting, delays
Value-Added Steps
- Customers are willing to pay for it - It physically changes the product - It's done right the first time
Creating the Current State VSM
1. Define the customer and the corresponding 'value' through the process 2. Define the equivalent unit of measure for use throughout the map 3. Complete a brief review of the value stream to identify the main processes (i.e., how many process boxes) work backwards from the customer 4. Start drawing, fill in process boxes, identify suppliers, determine flow of information and materials, calculate time associated with each process box, inventories both within and between the processes and other relevant information 5. Determine if the work is being 'pushed' or 'pulled' between the subprocesses 6. Calculate the total value added time vs. the demonstrated total cycle time of the value stream across the bottom of the VSM
Value Added Process
A process step that transforms or shapes a product or service which is eventually sold to a customer
Process
A set of linked or related activities that take inputs and transforms them into outputs with the purpose of producing a product, information, or service for external or internal customers Inputs > Transformation > Outputs - All activities take place in here - the quality of it determines the quality of output Lessons Learned - Most people do not think in terms of processes. They would rather think in terms of isolated events - When convinced of the value of thinking in terms of processes, most people still don't think in terms of processes - The word "process" generates fear and resistance
Pull System Basis
A system in which no upstream process produces a good or service until the downstream process asks for it Each down-stream person pulls what is required from up-stream process as needed - Local decision making - Emphasis on smooth flow - Quick response, low inventories and observable problems - Cooperative problem solving
Over-processing
Adding unnecessary steps to a process; redundancies between processes • Causes - Lack of customer requirements - Redundant inspections or approvals - Poor design or configuration - Attitude • Why is it a waste? - It wastes time, labor, and possibly materials - It may create delays - It increases possibilities of defects
Defect
Anything that does not meet the acceptance criteria • Causes - Wrong parts from suppliers - Incorrect/incomplete inputs - Machine inaccuracy - Poor quality control (Six Sigma is needed!!) - Poor employee training and regulation - Poor process documentation • Why is it a waste? - Rework incurs all kinds of costs - Production may need to be rescheduled - Poor customer rating causes brand damage!! *Any event that does not meet a customer's CTQ - must be measurable*
Takt Time - the Heartbeat
Available Work Time / Customer Demand
Talent
De-motivating the workforce by not asking for input or recognizing success • Causes - Not recognizing success - Limited authority and responsibility - Wrong job • Why is it a waste? - Low moral and hence low production - Loss of talent - Replacement and training costs - Poor image among potential hires
Gage R&R
How can we say our measurement system is sufficient for our study? • Judged by *tolerance* • Judged by *process performance* %GR&R = 6 sigma / tolerance x 100% Performance Evaluation Acceptable - R&R < 10%, sd > 20 Possibly Acceptable - R&R 10% to 30%, sd < 20 Unacceptable - R&R > 30%, sd < 2
Ex Hiring Process Flowchart
Identifying Ys in Each Step Y = signed req. Y = clearly defined requirements Y = No. of candidates, quality Y = candidate assessed Y = offer acceptance Y = assimilated Identifying Wastes - Quality of candidate - time to hire (total: 136 days) - Offer acceptance rate - Retention
Process Yield
Inputs can be wasted during steps of the process, resulting in overall process output that is *less than the full potential* Start yield 95% > yield 95% > yield 60% > yield 90% > yield 90% Yield avg RTY = 44% Stop • Collect yield measures for each process step • Multiply the yields of each step together to calculate the Rolled Throughput Yield (RTY) and establish a baseline for the entire process • A 5-step process each producing at 99% resulting in a RTY of 95%
Swim Lane Mapping
Key Elements • Shows the detailed steps in a process and which person/group/function is involved in each step • They are particularly useful in processes that involve the flow of info between people or functions, as they help highlight handoff areas • They help to identify the stakeholders • Questions to ask - Are the right people involved at the right time? - Are there unnecessary hand-offs or too many people involved? - Are there barriers between people who must work together?
CTQ Tree
Need --> Drivers --> CTQs Good customer service > 1. 2. 3. branch out like a tree general -------> specific hard to measure ------> easy to measure
Entitlement
The level of performance a business should be able to achieve given the investments already made
Six Sigma vs. Traditional Approach
Traditional Approach: Practical Problem -> Statistical Problem -> Statistical Solution -> Practical Solution Six Sigma Approach: Define Measure Analyze Control Improve
Accuracy (Bias)
differences between observed average measurement and a standard the shift in the average (mean) can be eliminated by calibrating the measurement system mu, how wide or narrow
Working Sequence
refers to the order in which the work is done in a single process • The process must be set up in such a way that each operator that performs the job does so in the same manner • Benefits - Easy to observe when something is being done out of order - Reduces overburden - Minimizes the threat of injury or illness
Specification Limits (SLs)
set in order to clearly and quantifiably divide customer satisfaction from customer disappointment many not be straightforward to find out Tolerance = USL - LSL
Value
the inherent worth of a product as *judged by the customer* and reflected in its selling price and market demand simply what the customers are willing to pay for
Sampling Approaches
*Random sampling* • Each unit has the same chance of being selected • Used for population sampling *Stratified Random Sampling* • Randomly sample a proportionate number from each group • Used for population sampling *Systematic Sampling* • Sample every n-th one (e.g., every 3rd) • Used for population or process sampling *Subgroup Sampling* • Sample n units every t-th time (e.g., 3 units every hour); then calculate the mean (proportion) for each subgroup • Used for process sampling
Continuous Data
- Characterizes a product/process feature in terms of its size, weight or time - The measurement scale can be meaningfully divided into finer and finer increment of precision
Discrete Data
- Counts the frequency of occurrence, e.g., the number of times something happens or fails to happen - Is not capable of being meaningfully divided into more precise increments
Calulating
1. Determine number of defect opportunities per unit O = ______ 2. Determine number of units processed N = ______ 3. Determine total number of defects made (include defects made and later fixed) D = *4. Calculate Defects Per Opportunity DPO = D / N x O* *5. Calculate Yield = (1-DPO) x 100 = * 6. Look up Sigma in the Process Sigma Table Process Sigma ^^ based on the assumption that the data is normally distributed short-term process sigma - It is generally observed that in the long term, process will have a 1.5 sigma of shift - When we say a 6 sigma process, it is actually 4.5 sigma for long-term (3.4 DPMO)
Defect Opportunity
A measurable chance for a defect to occur; counts the number of times a requirement could be missed, NOT the ways in which it can be opportunity occurs each time the product, service, or information is handled, the point at which a customer quality requirement is either met or missed • To measure process sigma improvements against the baseline, the number of opportunities per unit must *stay constant* before and after improvement • An opportunity should be based on a defect that can *reasonably* happen—if something has never been a problem, don't count it as an opportunity - Inflating the number of opportunities will artificially inflate the sigma level • # should bear some relation to the complexity of the value-added process—that is, more complex processes should have more opportunities than simple ones
Improving the Current State
Based on the vision, review the current state and steps for leaning out the value stream - Identify areas of waste - Highlight areas of opportunity - Brainstorm and collect improvement ideas - Prioritize improvements based on effort vs. impact • Based upon the prioritized projects, apply Lean & Six Sigma principles and tools/techniques - Break implementation into steps and do it! - Ensure Value Stream Manager involvement
Major Elements of a Team Charter
Business Case (Why) Problem and Goal Statements (What) - Project description - Goal and Measures - Expected Business Results - Expected Customer Benefits Project Scope (Where) - Scope - Support required Milestones (When) - Key deliverables - Schedule Roles (Who) - Team members and responsibilities *BE SMART- Specific, Measurable, Achievable, Relevant, Time-bound*
Examples of Collection Forms
Frequency Plot Tally Sheet Checksheet Concentration Diagram
Inventory
Material or product that is used to cover for inefficiencies • Causes - Inaccurate demand forecasting - Poor inventory tracking & planning - Unbalanced production processes - Push instead of pull • Why is it a waste? - It adds to the storage and moving costs - It ties up capital but has not yet produced an income - It may be difficult to retrieve & adds risks of being damaged - It reduces customer responsiveness
Poka-yoke
Mistake Proofing the process of anticipating, preventing, and detecting errors that adversely affect customers or result in waste based on the belief that people do not intentionally make mistakes but for variety of reasons mistakes can occur simply stated, errors occur because the current method allows them to occur safety methods to prevent mistakes from happening ex. washer machine safety instructions
Precision
Noise of the measurements - *Repeatability (or Equipment Variation)*: variation when one person repeatedly measures the same unit with the same measuring equipment - *Reproducibility (or Appraiser Variation)*: variation when two or more people measure the same unit with the same measuring equipment the spread (variation) sigma, standard deviation, how wide or narrow gage R&R study is needed to reduce measurement system variability
*Measure Phase*
Purpose: to establish current baselines of the product or process as the basis for improvement If the metric is incorrect, it is likely that the project would fail "If you can't measure it, you can't manage it" *Data is critical in this phase!! Essential to measure the baseline of your product/process*
SIPOC Considerations
Purpose ➢ Why does the process exist? ➢ Where does this process start and end? ➢ What is the outcome? Suppliers/Inputs ➢ Where does the information or material with which your work come from? That is, who are the Suppliers? ➢ What do they supply? ➢ Where do they affect the process flow? ➢ What effect do they have on the process and on the outcome? Process Steps ➢ What happens to each input? ➢ What conversion activities take place? Outputs ➢ What does the process make? ➢ Where does the process end? Customers ➢ Who "catches" the output? Who uses the output of the process? ➢ Who are the Customers of this process If you are "stuck," it may be helpful to start with the Customer and work backward--This is called *COPIS*
Define Phase
Purpose: defines the project goals and customer deliverables deals with customers, internal and/or external sets the direction and expectation of the six sigma project *begins with an idea*
Benefits of Lean
Reducing wastes consequently results in • Reduced cycle times • Greater throughput • Better productivity • Improved quality • Reduced costs all improve customer satisfaction and company's competitive advantage
Types of Process Mappings
SIPOC Map Detailed Process Map Spaghetti Map Swim Lane Map (hw 2 flow chart) Value Stream Map
VOC Process
SIPOC Map VOC Plan Affinity Diagram Tree Diagram Kano Model
*Sampling*
Statistical methods allow us to make sound conclusions about a process even from a relatively small sample *(this is called "statistical inference")* • When collecting all the data from a process isn't possible - There may be too much data, and it would be impractical, too costly, or too time consuming to collect and analyze it all - Collecting the data may be destructive (e.g., taste testing) and you need to minimize product loss • Precision - How much of a difference makes a difference . . . • How narrow the range needs to be for an estimate of a characteristic
8 Wastes
TIMWOOD-T *Defects* - anything that does not meet acceptance criteria *Over-processing* - adding unnecessary steps to process; redundancies between processes *Waiting* - elapsed time between processes when no work is being done Non-utilized *Talent* - de-motivating the workforce by not asking for input or recognizing success *Transportation* - unnecessary movement of material or product *Inventory* - material or product that is used to cover for inefficiencies *Motion* - unnecessary movement of people; multiple hand-offs Extra (*Overproduction*) - making or manufacturing in excess of customer requirements; providing a service that is not really need
Rate of Improvement
The calculated process sigma level is influenced by what you define as an "opportunity"—which can be subject to much debate - Often, a more enlightening measure of good management is to see how process sigma is changing • Increased customer focus and process improvement will be reflected with an increase in process sigma. • A process sigma that goes up by one unit every year is much more indicative of a customer focus than a process sigma that is constant at 4.
Baseline
The current level of performance
Standard In-Process Stock
The minimum quantity of parts always on hand for processing on and between sub-processes - For a continuous process, the target in-process stock should be one piece - The actual number of parts between processes will depend upon the actual operations - The key is to ensure that the bottleneck process always has a supply of parts to process It allows the worker to do the job continuously in a set sequence of sub-processes, repeating the same operation over and over in the same order ex. Pig Game, drawing pig with visualization vs instructions
Why Map the Value Stream
To work on the *big picture*, not just individual steps, improving the whole, not just the parts To look at the *sources* of waste, not only the waste itself To have a *common language* to talk about value streams To show the *link* between the information flow and the material flow To form the basis for an implementation plan: - The Current State Value Stream Map (= as-is situation) - The Future State Value Stream Map (= to-be situation)
Motion
Unnecessary movement of people; multiple hand-offs • Examples - Looking for tools, parts, etc. (poor work place organization) - Running to another portion of the building to get a printed document (inefficient layout) - Searching for a long time in the computer - Moving around pretends to be working • Why is it a waste? - It simply costs labor while adding no value - Small time wasted on each motion can add up! - It interrupts production flow
Kanban
Visual Card - Limits inventory in system - Deliver when needed - Authority to produce - Engages the operator in the process - Cards to signal and communicate order facilitates the pull process
Measurement System Analysis
Why? - We must measure in order to improve, both to know the baseline and the improved result - Our observation may be distorted by the measurement system - "What we see may not be what actually it is Goals - what to achieve!! - To make sure the measurement error does not dominate our view of the progress - To minimize controllable factors that could add to the data variation • If the gage is not good enough for the needs of the project, you have to fix it (using DMAIC) before you can move on!
Benchmark
World-class performance - Become the industrial best is important (and maybe acceptable) too - Against industrial leaders and competitors (also could be top performers regardless of industry) purpose is to adopt the good features of what we learn and make them part of how we work
*Operational Definitions*
a precise description that tells how to get a value for the characteristic you are trying to measure includes what something is and how to measure it - Removes ambiguity so that all people involved have the same understanding of the characteristic or feature in question - Describes your way of measuring that characteristic or feature
Improvement Projects
generally apply sampling to process situations • To determine the baseline performance of process cycle times and defect rates (e.g., plot sample data on a control chart) • To estimate Process Capability (e.g., count defects in a sample) • To identify factors (Xs) that cause poor performance or variation in the data (using plots, hypothesis tests, or regression with sample data) • To verify that proposed improvements work (compare new data sampled from a process with prior data sampled from that process) • To monitor process performance, kick off remedial action if needed, and predict future performance (control chart the sample data from new process)
*Process Sigma*
the capability of the process relative to specifications for that process a measure of process capability that compares the output of a process to customer or design requirements Getting better requires reducing the variation and moving the average away from the spec limit, to reduce defects - an expression of process yield ! combining yields determine overall process sigma establishes the current baseline of your improvement project
Characteristics of Measurement Systems
• *Resolution*: the smallest scale of the measurement • *Accuracy* • *Precision* • *Stability*: do measurements change with time?
Performance Standards Summary
• Define specification limits • Define a defect - Customers' acceptance criteria for the product/process • Establish how to measure the quality of the product/process - Where is the data coming from? - How do you measure the process? - What are the units of measure? • Gain consensus on the performance standards Example: translates customer needs into quantifiable requirements for the product or process Customer Needs -> CTQ -> Product Characteristic (cycle time to deliver drawings), Measure (from notice to proceed delivery time), Target (13 weeks), Specification Limit(s) (15 weeks)
Representative Samples
• For conclusions to be valid, the samples must be *representative* - data you collect fairly represents all the data - No systematic differences between the data you collect and the data you don't collect - Every item stands an equal chance of being included • Avoid "Bias"
Features of An Operational Definition
• Must be specific • Must be measurable • Must be useful to both you and your customers • Everyone has the same understanding • There is no single right answer
Gemba
"Go & See" • Frequently scheduled activity where leadership goes to the "point of impact" to observe operations first hand • Lead the team to resolve existing issues plus identify additional waste for improvement opportunities • KPI's & Visual Factory are key components to making Gemba walks successful - need to see the abnormalities • Leadership coaching, teaching & mentoring are critical - engage the team in the observations & findings (employee engagement) • Tool to recognize employees
Andon
"light" in Japanese • A system to notify management, maintenance, and other workers of a quality or process problem • The centerpiece is a signboard incorporating signal lights to indicate which workstation has the problem • The alert can be activated manually or automatically • It is one of the key elements of implementing Jidoka (automated system)
Outputs of Define Phase
*very important to get your key business stakeholders to signoff the team charter at the end of define phase* don't be surprised that your proposal is not accepted/supported at the beginning there are tools to manage and accelerate the changes (project scoping, stakeholder approval, etc.) - change management tools
House of Toyota Production System (TPS)
- Heijunka - Standardized Work - Kaizen - Just-In-Time - Jidoka
Define: Key Steps
- Identify customers and project Critical-To-Quality (CTQ) by listening to the Voice of the Customer (VOC) - Develop high-level process map (SIPOC) - Develop business case and team charter -There is no formality of how we do it -There is usually some back-and-forth between these activities in practice
Human Errors That Lead to Defects
1. Forgetfulness 2. Errors due to misunderstanding (communication) 3. Errors in identification 4. Errors made by untrained workers 5. Ignored the rule 6. Inadvertent errors (distraction, fatigue) 7. Errors due to delay in decision making 8. Errors due to lack of standards 9. Surprise errors (malfunction of the system) consider mistake proofing against these
VOC Steps
1. Identify customers and determine what you need to know 2. Collect and analyze reactive system data then fill gaps with proactive approaches 3. Analyze data to generate a key list of customer needs in their language 4. Translate the customer language into CTQs 5. Set specifications for CTQs Outcomes: • A list of customers and customer segments • Identification of relevant reactive and proactive sources of data • Verbal (or numerical) data that identify customer needs • Defined Critical-To-Quality (CTQ) requirements • Specifications for each CTQ
Basic VOC Systems
1. Reactive systems - Information comes to you "Complaints Department" 2. Proactive systems - Seek out your customers needs
DMAIC
Define the problem - What is customers' expectation of the process? Measure: Map out the current process - What is the frequency of defects? Analyze: identify cause of problem - why, when and where do defects occur? Improve: implement and verify solution - how can we fix the process? Control: maintain the solution - how can we make the process stay fixed?
Push Production
Each Step in the Process Works as Fast as They Can, Regardless of End Customer's Needs - Central decision making - Local optimization of equipment utilization - Large batches, large inventories, and thus a possibly sluggish system
Waiting
Elapsed time between processes when no work is being done • Examples - A downstream worker is idle while an upstream worker cannot finish his/her part - Ineffective production planning - Waiting for management approval/feedback • Why is it a waste? - It costs valuable resource, labor! - It adds to the cycle time and customer response time - It may lead to overtime - It causes low morale and loss of motivation
Over-production
Making or manufacturing in excess of customer requirements; providing a service that is not really needed • Examples - Producing more product "just in case" - Producing more than demand (e.g., large batch sizes) - Producing faster than desired - Producing products that are not a priority • Why is it a waste? - It adds to the inventory costs - It consumes resources that are not (immediately) needed - It takes the focus away from what the customers really want
Six Sigma History
Motorola 1979 "The real problem at Motorola is that our quality stinks!" - Art Sundry, Sales Leader, boldly stated at annual sales meeting • In the early and mid-1980's, Motorola developed the new standard and created the methodology - $20MM in savings for Motorola's page production line - Also a change in mindset (Cost of Poor Quality) and culture • In mid 1980's, Mikel Harry & Richard Schroeder founded the *Six Sigma Academy* • Six Sigma became famous when *Jack Welch* made it central to his successful business strategy at *General Electric* in 1995 - Reported $200MM in savings in the first year of implementation (1996)
Categories of Business Impacts
POTENTIAL IMPROVEMENT ➔ POTENTIAL IMPACT Reduce inventory levels ➔ Reduce capital investment & carrying cost Reduce time-to-market ➔ Increase revenues through increased sales Reduce equipment downtime ➔ Increase productivity Reduce rejects/rework ➔ Decrease material costs; greater ROI Improve productivity ➔ Reduce labor cost per unit Speed up delivery time ➔ Increase revenues
Lean and Six Sigma
They are not only tools or methodologies - more importantly, they are mindsets! They complement each other - Lean focuses on eliminating wastes and improving efficiency - Six Sigma focuses on reducing defects and variation Lean + Six Sigma --> Faster (speed) & Better (accuracy) If you want to achieve your goals, don't focus on them. Instead, focus on your *behaviors*, or *things that you can control!* Ex. Losing weight (focus on behavior instead of number/ eating healthy and working out) If Cause is Known & Complex - LEAN If Cause is Unknown & Complex - SIX SIGMA If Cause is Known & Simple - JUST DO IT! If Cause is Unknown & Simple - ASK AN EXPERT!
VOC Plan
WHO: List the main customers who use your product and service and make notes about potential segments that might be relevant to your project. WHAT & WHY: Think about what you need to know from these customers SOURCES: Look for diverse sources of information about customer needs. SUMMARY: Summarize specifically which customers you will contact, when, and how
Muda
Waste in japanese • Any activity that absorbs resources, and hence adds costs and time, but *adds no value to customers is a waste* - Customers only pay for value added activities • Waste is a symptom - *Minimize* necessary wastes • Project coordination, practicing law and company regulation, etc. - *Eliminate* pure wastes • 8 typical wastes • Typically, 1-10% of the activities are value added
Kaizen
a culture and a continuous improvement mindset refers to the series of rapid improvement activities whereby instances of Muda are eliminated one by one at minimal cost - Engaging process owners and stakeholders - From a few hours to a few days - Frequent small, incremental improvements or large, step-function change events - Leadership sanctioned time, empowering employees to drive change Benefits: • Aids in cross-functional alignment through engagement • Drives data-based & process-focused decision making • Formalizes common problem-solving approach Everything that we do today can be improved so Kaizen has no end
SIPOC Mapping
a high-level view of a process helps to define project boundaries (starting and ending points) and focuses the team on where to collect data created at the start of any projects all work can and should be considered as a process! creating one helps: - avoid "scope creep" - Highlight areas for improvement - Ensure focus on the customers Suppliers Input Process Output Customers Ex. Hiring process takes too long and candidate quality is too low Suppliers: College, search engine, HR Inputs: candidate pool, job description, budget, economy Process: Hiring process Outputs: time to hire, candidate quality, employee retention, offer acceptance rate Customers: hiring process, affected dept., business defines the project boundaries and highlevel processes
Sigma
a statistical term to designate the standard deviation (or spread) of the mean (or average) of a process Sigma Capability - a metric indicating how well the process is performing in a business or a manufacturing system
Six Sigma
a strategy to improve process quality by identifying and eliminating *defects* and minimizing *variation* goal is to attain less than 3.4 Defects Per Million Opportunities (DPMO) a structured and data-driven approach to drive such a near-perfect quality goal list of companies who use this: - 3M, Amazon, Bank of America, Boeing, Dell, DHL, Ford, GEICO, GE, Honeywell, HSBC, Intel, LG, Lockheed Martin, Motorola, Samsung, Staples, Target, Hertz, McGrawHill, Toshiba, U.S. Army, U.S. Marine, U.S. Navy, UnitedHealth Statistical Objective: eliminate defects, reduce variation (target: middle of bell shaped) Focus: our behaviors on Control X to Control Y, finding the root causes of the quality problem Y= f(x)
Kano Model
a theory of production development and customer satisfaction - Must Have characteristics are generally taken for granted unless they are absent - Customers generally discuss or bring up issues related to More Is Better characteristics - Delighters are generally not mentioned, since the customers are not dissatisfied with their absence *Pleased* (Delighters) Customer Satisfaction is Delight + Degree of Achievement is Fulfilled *Resigned to Reality* Customer Satisfaction is Delight + Degree of Achievement is Absent *Not Pleased* Customer is Dissatisfied + Degree of Achievement is Absent *Taken for Granted* Customer is Dissatisfied + Degree of Achievement is Fulfilled More is better!
Affinity Diagrams
a tool that organizes language data into related groups -- Statement written on individual cards or notes notes are clusters based on intuition, not logic title notes identify themes OK to have clusters of one notes can be several layers of clustering
Value Stream Mapping
a tool used to create a *material and information flow map* of a product, document or service acts as the *foundation* for all lean activities; a visual tool for lean! maps the *flow* of this product, document or service *from suppliers* through all process steps until the product, document or service is delivered *to the customer* shows the *interactions* among customers, process steps and suppliers focuses on delivering *value* to the customer; to develop a future state of the process with *improved performance* all about looking at the process from the *product's* point of view* "put yourself in the shoes of the product" Difference between the current-state and future-state provides the *implementation agenda/project list* It is the most effective tool to use in *integrating* lean/six sigma in process excellence efforts
Lean Enablers
a variety of tools used to enable the culture designed to reduce waste & increase customer value Policy Deployment Andon Process Mapping Visual Factory 5S / Workplace Org KPIs Standard Work Kanban Gemba Poka-yoke Rewards & Recognition
Value Stream
all actions (both value-added and non value-added) required to bring product through: - order to cash - concept to launch - raw material to finished product
Importance of Team Charters
an *agreement* between management and the team about what is expected • Clarifies what is expected of the team • Keeps the team focused • Keeps the team aligned with organizational priorities • Transfers the project from the sponsor(s) to the project team
Visualize the Future State
looking at vision for future state - What is the strategic goal for the value-stream - more speed, less cost, higher customer satisfaction, others? Qualify the vision! - Reduce lead time to 10 days - Improve productivity by 30% - Decrease paper use to 0% (paperless environment) - Reduce defects/mistakes to 0 - Increase 1st ring availability to 98% - Etc.
Lean / Lean Thinking
mindset, philosophy, culture "it provides a way to do more and more with less and less -- less human effort, less equipment, less time, and less space, less stress -- while coming closer and closer to providing customers with exactly what they want." NOT ONLY a tool box of methods, ideas, and methodologies BUT a CULTURE "The key to the Toyota way and what makes Toyota stands out is not any of the individual elements... But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner - not in spurts." -- Fujio Cho, "The Toyota Way" by Jeffrey Liker Why Should We ...? Engaged, empower teams utilizing tools results in best in class service, class quality, class value = every company's greatest assets are its customers...without customers there is no company --> Loyal Enthused Customers
Flow
the progressive achievement of tasks as a product proceeds along the value stream, including design to launch, order to delivery, and raw materials, into the hands of the customer without stoppages, scrap, or backflows applies to the movement of information as well as material
Performance Standards
the requirements (or specifications) imposed by the customers on a specific CTQ translates customer needs into measurable characteristics: - Have clear operational definition (what to measure, how to measure, where to collect data) - Specify target - Impose specification limits - Have clear defect definition critical to define what the customers' acceptance criteria are for the product (recall that the main purpose of Six Sigma is to reduce defects and variation) provides necessary information to satisfy the customer needs - E.g., a customer simply want the right part at the right place at the right time
Cycle Time
time it takes to finish a step before moving on to next step (includes value-added and non value-added time) Understanding - Provides a better understanding of the process Shows the impact of non value-added steps on the time to produce product or service Identifies bottlenecks in the process Reduction: Helps increase predictability in the process Helps reduce waste and rework, which reduces costs Provides a competitive advantage by reducing cycle time
Transportation
unnecessary movement of material or product • Examples - Transport a WIP (work-in-progress) to the next process location which is not adjacent to the current one - A big container travels with small items, or too many items to be transported using a small container • Why is it a waste? - It consumes resources and hence adds to the costs - It adds to the product cycle time - It adds to the risks of being damaged, lost and delayed
Voice of the Customer (VOC)
used to describe customers' needs and their perceptions of your product or service Purpose: to identify the key business drivers of customer satisfaction only through understanding the customer that you can effectively design, deliver, and improve products and services This data helps an organization to: - Decide what products and services to offer - Identify critical features and specifications for those products and services - Decide where to focus improvement efforts - Get a baseline measure of customer satisfaction - Identify key drivers of customer satisfaction ex. GE Aircraft Engines plane out of service, remove and ship engine, engine arrives, repair engine, ship back to customer, engine arrives, engine returned to wing Customer View of GE's Contribution (large part of whole) vs. GE's Traditional View of its Contribution (smaller) Eye of the Beholder
Heijunka
• A Japanese word of "production leveling" or "production smoothing" • A methodology to establish stability in a system where demand is erratic • The purpose is to reduce Mura (Unevenness) Foundation of TPS "The slower but consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. The Toyota Production System can be realized only when all the workers become tortoises." - Taiichi Ohno Leveling - producing same amount every day rather than random large/small variations
Minitab
• A statistical software package • Has many tools that can be used in data analysis and quality improvement - Data visualization - Statistical data analysis - Quality tools • "Thousands of organizations around the world have used Minitab software for more than 40 years. Our customers include 90% of the Fortune 500 companies." Data Entry • Type in the worksheet - Data entry arrow - Select and drag • Import/copy from other worksheet or software (e.g., Excel, database) • Open from existing Minitab files (*.mpj project files, *.mtw worksheet files, *.xls(x), *.txt, etc.) • Generate in Minitab - Random data - Patterned data - Use formula Descriptive Statistics • Mean (average) - The sample mean is an estimate of the true population mean • Median - The middle value when the data is sorted • Range - The largest value - the smallest value • Variance and standard deviation
Visual Management
• A tool (or tools) to convey data and information in a lean manufacturing environment • Should allow "status at a glance" - what is out of standard? Differentiating "normal" and "abnormal"! • Should incorporate other lean tools, such as KPI's, standard work, safety, quality, customer service, recognition, etc. • Key piece to facilitate productive Gemba walks • Must be easy to maintain - maintained by associates working in the operation (ownership & accountability) • Must not be a "window dressing" Posted in areas accessible to respective team. USED TO RUN BUSINESS - NOT WALLPAPER
Process Mapping
• Ability to see the entire process flow - process and data linkages (various methods to map) • Ability to see inter-relationships of all sub-processes and the functions that support them • Show the relationship of value added and non-valued added work • Expose the sources of waste = opportunities for Kaizen (improvement) • Develop a future state map = provide a common vision for the organization to drive towards • Facilitates employee ownership / engagement
Policy Deployment
• Alignment of overall objectives (all levels of the organization) • Provides strategy to execute goals • Provides metrics to measure success • Provides visual mechanism to facilitate keeping all parties focusing on a common goal by breaking down this goal to the lowest level of the organization - communication & employee engagement Goals and Objectives posted, maintained and reviewed on a regular basis. POSTED FOR ALL TO SEE
GE's Quality Goal in late 1995
• Although GE's quality levels were equal to or better than those of its competitors, in late 1995 - GE set a stretch goal to reach 6s quality by 2000 • GE 1996: 3.5σ - 35,000 defects per million opportunities - 96.5% good results • GE Goal: 6σ - 3.4 defects per million opportunities - 99.9997% good results - nearly flawless performance • To reach goal, must reduce defect rate by factor of 10,000!
Reward & Recognition
• Associates should be recognized for their accomplishments on a timely basis • Gemba walks utilizing the KPI's and visual factory will enable this • Visual displays enable recognition • Recognition does not always need to be monetary but must always be genuine - may require some preparation • Key piece of employee ownership & engagement
Measure: Key Steps
• Create process flowchart • Define performance standards • Data collection • Measurement system analysis • Determine process sigma
Six Sigma Methodologies
• DMAIC (Focus of this course) - Define, Measure, Analyze, Improve, Control - A methodology for improving the existing processes • DMADV - Define, Measure, Analyze, Design, Verify - A methodology for developing new designs - Also known as DFSS ("Design for Six Sigma")
High Level View of SIPOC
• Defines the boundaries (start and end points) − Can begin with Suppliers and work forward or vice-versa (COPIS) • Supplier: "Who" provides the input • Input: Material or data that a process does something "to" or "with" • Process: The activities you must perform to satisfy the Customer requirements • Output: The method or data that results from the process • Customer: The recipient of the output of the process
VSM Key Elements
• Focuses on the customer and the corresponding definition of *value*; includes all the actions currently required to bring a product to the customer • Helps you see and understand the *flow of material and information* within the total value stream • Means working on the *big picture*, not just individual subprocesses, and improving the whole, not just optimizing the parts • Provides visibility in seeing the *interaction* among customers, processes, and suppliers
Improving Flow
• Line up all of the steps that truly create value so they occur in a *rapid sequence* • Ensure that each step in the process has *sufficient capacity* • Align the steps to deliver the shortest possible *cycle time* understand the benefits of the process ex. sub making exercise - easier to keep making bread instead of waiting for whole sub to be made
Key Performance Indicators
• Must be established for all major activities • Must have linkage to the functional Policy Deployment Plan • Key component of employee engagement • Must drive behavior around cost, quality, productivity and customer service - behavior reinforced through Gemba Walks • Must be easily visible at the point of impact • Should be used to drive kaizen activity
Importance of a Focused Problem Definition
• Often people think that by tackling a broad problem they can make big improvements or achieve big savings - E.g., improve efficiency in the production plant • Problems that arise from trying to work on a too-broad problem - Having difficulty getting beyond general issues that are harder to tackle - Having people get bored or discouraged
5S stands for
• Sort - Clearly distinguish needed items from unneeded items and eliminate the latter • Set In Order (Simplify) - Keep needed items in the correct place to allow for easy and immediate retrieval - A place for everything and everything in its place • Shine (Sweep) - Keep the workplace swept and clean - Identify abnormalities early by visually sweeping the area • Standardize - This is the condition we support when we maintain the first three S's • Sustain - Make a habit of maintaining established procedures
Lean Thinking Fundamentals
• Specify *value* - Value is defined by customers in terms of specific products and services • Create *value stream* - Map all steps that bring a product or service to the customers to identify and eliminate wastes • Establish *flow* - The continuous movement of products, services and information down the value stream • Implement *pull* - Nothing is done by the upstream process until the downstream customer signals the need • Work for *perfection* - Pursue continuous improvement again and again
Lean History
• Starting in 1910 Ford's mass production line was the first breakthrough by using continuous assembly and flow systems • Inception in 1940's by Toyota • *Taichii Ohno* and *Shigeo Shingo* created a new system called *Toyota Production System (TPS)*, incorporating Ford production and other techniques • In 1990, the term *"Lean Manufacturing"* first appeared in the book "The Machine That Changed The World"
Impact on Supply Chain Activities
• Suppliers - Lower costs due to efficient systems - Shorter lead times - Lower safety stock • Operations - Proper cycle time calculation ensures. production according to customer demand - Uniform work flow - Pull production • Logistics - Optimization models to select routes - Warehouse design changes reduce waste
Importance of Leadership
• The program must be driven from the top - The leadership engagement is what behind successful Lean stories • The key is not about spending money, but "retooling" the way people think • An important investment to become a Lean company is to change the culture - Change is almost always difficult - We will see why and how to accelerate it using change management
Just-In-Time
• The purpose is to provide the customers what they need, when they need it, in the amount needed • Three main elements 1. continuous flow - improve efficiency reduce defect 2. Takt time - establish the "pace" of the system 3. Pull system - only take what is needed when it is needed in the amount needed from the proceeding process
Jidoka
• The purpose is to visualize and highlight the abnormal conditions in the system • Two main elements - Stop and notify of abnormalities • Only products satisfying quality standards will be passed on to the next process - Separate man's work & machine's work • Since a machine automatically stops when problems occur, each operator can continue working on another machine without worrying the first machine • Each operator can take charge of many machines and hence the productivity is improved
How Focused Is Focused?
• There are no rules that tell you when a problem is focused enough • Narrow the problem so you can effectively use your time and resources • Focused problem definition - Describes specifically what occurs - When or under what circumstances it occurs - Who is involved Focusing a Problem Definition A poorly focused problem statement does not answer many questions Focus a problem statement by answering who, what, when, where, and which Ex. Eliminate baby shampoo counterfeit (broad or vague) VS. Reduce 20 fl ox no more tears baby shampoo counterfeit in india by 50% (narrow focus)
Understanding a Process
• To better understand your process, you will: Create a flowchart of your process Identify which of your process steps are valueadded and which are nonvalue-added Determine cycle time and identify bottlenecks Look for errors or inefficiencies that contribute to defects
Standard Work
• Visually documented best practice used to perform critical/key job functions • Must be developed & maintained jointly with actual operators (ownership & accountability) • Must be easily accessible at point of impact • Key tool to train/cross-train associates • Key tool for problem solving, value stream mapping, Kaizen and Gemba • Level of standard work may vary depending on job function (Standard Work Sheet or Work Instruction Aid) Work Aid Instruction - Raw Material Pull System
Questions Answered by a Charter
• WHY? What rationale (criteria) was used to determine the need for this project? • WHAT? What problem is the team addressing? What problems do customers have with the process? What is the scope? • WHERE? Which facilities, product lines, and areas of the operation will be impacted by this project? • WHEN? What are the milestones for the project? By when will you be able to complete each phase of the DMAIC process? • WHO? Who is this team accountable to? Who is your champion? Who is on this team?
Customer's Requirements
• We need to evaluate whether customer's requirements are realistic - Sometimes, we cannot satisfy these needs while meeting our own business objectives (e.g., costs) - Ask whether these requirements can be met with • Current baseline process • The improved process to its entitlement level • The best known processes available - We may need to educate our customers with regard to the best that can actually be achieved and work with them to develop a new set of specifications
How to Create Flowcharts
• When creating a flowchart, work with a group so you can get multiple viewpoints • Brainstorm action steps Write these on self-stick notes or on a flipchart Make sure to include the steps that occur when things go wrong • The SIPOC is a great start, because it defines your suppliers, customers, inputs, outputs, starting point, and ending point • Arrange the steps in sequence Be consistent in the direction of flow - time should always flow from top to bottom, or from left to right Use appropriate flowchart symbols • Check for missing steps or decision points • Number the steps at the end (flowchart we did in class and hw2) Basics: start > step 1 > step 2 > step 3 > decision (yes or no) step 4 (no), step 5, step 6 (yes) -> end What are the benefits? Shows each step as it actually happens Highlights wasted efforts and steps to eliminate Help simplify and troubleshoot the process Identify who touches at each step Identify outputs for each big Y
Key Future State Questions
• Where can you use continuous flow? - How can you flow with maximum velocity within each process step? • At what single point in the process will you manage the queue? - Are all process steps in sync with the customer? • How will you level the service mix? - Is final customer demand level? - Does/can the service mix match employee's and/or process capability? • What process improvements will be necessary? - Case teams and/or co-location of key resources - Faster information flow (will IT changes be required?)
Benefits of Pull
• Work is initiated at the *signal of demand* • Work is limited to those *value-added activities* signaled by demand • Work is *synchronized* and designed based on demand patterns and known events • Work and inventory are kept at the *lowest level* possible and unique attributes are delayed until the last point possible
Standardized Work
• Work organized to be around human motion and to create an efficient production sequence without any Mura • Importance - Without this, there can be no measurable baseline - Impossible to improve without a baseline - For employees to know how to be successful • Three key elements - Takt Time - Working Sequence - Standard In-Process Stock
5S / Workplace Organization
• a process to achieve and sustain a clear, clean, safe and organized workplace • Only keep and maintain what is required for that job function - remove material, equipment, information that is not required • Maintained by associates working in the operation (ownership & accountability) • Set up to reduce walk-time / lead-time to get what is needed • Ensure that the workplace contains only what is needed, when it is needed and where it is needed
Spaghetti Mapping
• used to detail the actual physical flow and distances involved in a work process • often traces the walking patterns of workers in a process (wastes that we didn't realize before) • mostly serves as an illustration of a system's inefficiency (like a mass of cooked spaghetti!) • Steps to draw 1. Create a scale map of a work station or work process 2. Draw a line from the initial point of work to the next step 3. Repeat it until the work or product exits the work area 25 (product picking)