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September 6, 2007
Implementing Lean/Six Sigma in Complex Industries: A Case Study at Endicott
Interconnect Technologies, Inc.
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How this webcast will work
Sponsored by
Implementing Lean/Six Sigma in Complex Industries
A Case Study at Endicott Interconnect Technologies, Inc.
Terence T. Burton, President
The Center for Excellence in Operations, Inc.
Terence T. Burton, PresidentBrad VanBrunt, Vice President , QualityAnd Business Excellence
Endicott, Ney YorkBedford, New Hampshire
Sponsored by
Agenda
Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Five Essential Success Factors
3
EI Corporate Profile
A tradition of technical innovation -former IBM Microelectronics DivisionNovember 2002 spin-off as an entrepreneurial, independent companyLocated in Central New York1,800 employees1.6M sq. ft. manufacturing and lab floor space2006 revenue $220M4-5% of revenue spent on R&D
Leading supplier of complex, high-performance electronic packaging solutions utilizing a vertically integrated approach
4
Mission Statement:To provide leading edge first and second level packaging and assembly solutions that bring value and competitive differentiation to our customers.
Vertically Integrated Provider with Broad Skill Set
Products
• PCB Assembly• Hybrid Assembly• Mechanical Assembly/Test
• Multi-Layer PCBs• Complex Backplanes
• Wire Bond PBGA• CoreEZ™• HyperBGA®
• Custom Design & Manufacturing• Physical Design• Reliability Test & Modeling• Materials Engineering
Semiconductor Packaging
Precision Equip. Manufacturing / Services / Other
Complex Assembly Solutions
PrintedCircuit Boards
CoreEZ™ and HyperBGA® are registered trademarks of Endicott Interconnect Technologies, Inc.
5
EI - Highly Differentiated Products & Capabilities
PCBs
• Broad competency set
• World class quality and reliability
• High density-fabrication leading edge PCB
–Precision layer-to-layer registration
–20:1 plating aspect ratio
• Unique high-speed boards with high performance cores
• Talented engineering team
• Test and analysis capabilities
Semiconductor Packaging
• Advanced flip chip and wire bond substrate technology
–Organic substrates - light weight
–High frequency applications
–Thin, low profile fits easily in tight board-to-board spaces
–Full strip line structures with low coupled noise
• Outstanding thermal and electrical performance
• High reliability (2-10 times ceramic)
• Superior System-in-Package solutions
Complex Assembly
• Complex, mission critical assembly
• Ability to manage large military contracts as the prime contractor
• Leading edge assembly processes
–Module assembly capability
–Full hybrid assembly, backplane, chassis and system build
• Focused New Product Initiative to production launch
• Extensive test capabilities
• Outstanding service and delivery performance
Sponsored by
Agenda
Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Integrate and Win Big
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Avoid the “Tornado of Improvement” and fad improvement programs
StatisticalQualityControlControl
Charts
2000
1990
1980
1970
1960
1950
1940
1930
1920
PDCA
ToyotaProduction
System (TPS)
QualityControlCircles
Theory ofConstraints Just In Time (JIT)
Total QualityManagement (TQM) MRP
MRP II
Business ProcessReengineering (BPR) LeanSix Sigma
Lean/Six Sigma
ERP
SRMCRM PLMSCM
Scientific InventoryManagement
Triz
Innovation
Six Sigma
in a Box
“Same box, different ribbon”
Six Sigma
in a Box
House of Quality
The Road to LeanKaizenExpress
Value Stream
EVAABC
Objective: Grow from a “good” company to a “great” companyChallenge: Deploy Lean/Six Sigma successfully as the enabler
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
6σSmall and MidSmall and Mid--Sized OrganizationsSized OrganizationsProblems with the traditional topProblems with the traditional top--down approach to Six down approach to Six SigmaSigma
Dedication of full time resources as Master Black Belts, Black Belts
Potential of $Millions in “up-front” investment with a
1 to 2+++ year payback
“Training of the masses” based on accepted ratios (versus true requirements) as the first step
Too much focus on “Belts” and not enough focus on “Results”Mad Belt Disease
Dedication of full time resources as Master Black Belts, Black Belts
Potential of $Millions in “up-front” investment with a
1 to 2+++ year payback
“Training of the masses” based on accepted ratios (versus true requirements) as the first step
Too much focus on “Belts” and not enough focus on “Results”Mad Belt Disease
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
6σSmall and MidSmall and Mid--Sized OrganizationsSized OrganizationsProblems with the traditional topProblems with the traditional top--down approach to Six down approach to Six SigmaSigma
Speed of deployment is too slow – Smaller and mid-sized organizations want and need results NOW!
The large scale Six Sigma deployments of GE, Honeywell, Caterpillar, etc. are an overkill
Not affordable, not sustainable, not necessary to achieve significant results in smaller/mid-sized enterprises
Bureaucratic hierarchy with layers of Champions, Master Black Belts, Black Belts, Green Belts, Yellow Belts (Counter to how small and mid-sized organizations work)
Organizational Complexity, Politics, and Culture Simplified in Smaller and Mid-Sized Organizations
Speed of deployment is too slow – Smaller and mid-sized organizations want and need results NOW!
The large scale Six Sigma deployments of GE, Honeywell, Caterpillar, etc. are an overkill
Not affordable, not sustainable, not necessary to achieve significant results in smaller/mid-sized enterprises
Bureaucratic hierarchy with layers of Champions, Master Black Belts, Black Belts, Green Belts, Yellow Belts (Counter to how small and mid-sized organizations work)
Organizational Complexity, Politics, and Culture Simplified in Smaller and Mid-Sized Organizations
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
CEO’s Scaleable Six Sigma™ Methodology
SixSigma
Support
Pilot
PartialDeployment
Full ScaleDeployment
2-3 Projects(6-8 weeks)
$200K Savings
15-25 Projects(4-6 months)$1.5 Million +
Additional Savings
20-25 Projects(4-6 months)
$3-5 Million + Additional Savings
Most organizations accomplish this inside of a 12 month window
Deg
ree
of S
ix S
igm
a D
eplo
ymen
t
Six SigmaApplications
Expertise
DeepKnowledgeof BusinessProcesses
and IT
Leadership
StrategicImprovementCompetencies
Six SigmaEducation
No-NonsenseExecution
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
What is “Business Excellence”Business Excellence is a philosophy of Improving
HOW we improve in EVERTHING we do as an organization:
Create a solid foundation and business/leadership process for managing improvement initiatives.Deploy more robust improvement tools for solving our critical business problems:
6 SigmaLeanKaizen (Quick strike / teaming)
Use a disciplined methodology (DMAIC) that is EI’s common language of improvement.Build a culture that strives for total employee involvement, increased competitiveness, growth, and profitability.Invest in the future of EI’s most valued resource - Our people.
Business Excellence is a philosophy of Improving HOW we improve in EVERTHING we do as an organization:
Create a solid foundation and business/leadership process for managing improvement initiatives.Deploy more robust improvement tools for solving our critical business problems:
6 SigmaLeanKaizen (Quick strike / teaming)
Use a disciplined methodology (DMAIC) that is EI’s common language of improvement.Build a culture that strives for total employee involvement, increased competitiveness, growth, and profitability.Invest in the future of EI’s most valued resource - Our people.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
MeasureMeasure
AnalyzeAnalyzeImproveImprove
ControlControl
Business Excellence DMAIC Foundation
KaizenLean
6σ
DefineDefineCalibrate
Benefi
t
Characte
rize
Optimize
Take Action
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Integrating Kaizen, Lean, and Six Sigma
LEAN
Value Stream ManagementSpeed, Velocity
Cycle TimeWaste Elimination
Flow, BalanceSynchronizationStandardization
SIX SIGMA
QualityProcess Perfection
Statistical EngineeringVariation ReductionKPIV/KPOV ControlsComplex Variation
KAIZEN
Basic ImprovementQuick StrikeContainment
Incremental Improvement
Transactional BusinessProcess Excellence
The Foundation (DMAIC): People working together with shared values and a common language of total
business improvement
Business ExcellenceOperations and
Technology Excellence
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business Excellence DeploymentSTEERING COMMITTEE
VP Quality *ChairCFOVP SP Panels & PWBVP Complex AssemblyVP HRVP Military/Defense Pgms.CEO, Inc.
STEERING COMMITTEEVP Quality *ChairCFOVP SP Panels & PWBVP Complex AssemblyVP HRVP Military/Defense Pgms.CEO, Inc.
PROJECT MANAGEMENTBrad VanBrunt, VP Quality *ChairBus. Excellence HireTerry Burton, CEO
PROJECT MANAGEMENTBrad VanBrunt, VP Quality *ChairBus. Excellence HireTerry Burton, CEO
LeadershipWeekly Management
Cycle Counting Process (Bill Paulos)New Product Design Verification (Roger Johnsen)
Production Planning and Execution (Verner Pekarek)Material Planning Process (Verner Pekarek)
Service Parts Order Fulfillment (Kelly Kightly)Market Strategy Process (Rob Urry)
Product Availability (Matt Bush)Local Market Compensation Compatibility (Hema Heimuli)
Overtime Reduction (Mick Quigley) Excess/Obsolete Inventory (Craig Lawson)
Recertification of B Stock (Dave Fata)Marketing Promotions Process (Randy Thorderson)
Redefine New Project (Lynn Alley)
Product Development Process (John Hanson)Supplier Selection Process (Rick Lambourne)Component Selection Process (Alan Ottley)Unplanned Maintenance (Steve Townsend)
Design for Manufacturability (Paul Marconi)Miscellaneous Transactions (Frederick Gabriel)
Receiving Process (Elpitha Votsis)Scrap Reduction (James Anderson)WeeklyWeeklyReportReportCardCard
Mentoring & FacilitationTechnical AdviceDaily Management
Mission CriticalImprovement Initiatives
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business ExcellenceHow we think, how we work, how we improve,
how we become the best in our industry
ImprovingHOW we improve
in EVERTHING we doas an organization
ImprovingHOW we improve
in EVERTHING we doas an organization
Securing ourCompetitive
FutureToday
InvestingIn our
People
Sponsored by
Agenda
Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Five Essential Success Factors
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Five Essential Success Factors
1.1. Leadership
2. Business Improvement Strategy
3. Deployment Planning
4. Change Awareness
5. Communication and Closed-Loop Feedback (Performance Measurement)
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
6σLeadership’s Roles in Lean/Six Sigma Success
5.Mandate Linkage to Business Plan6.Make Proper Investment in Resources7.Develop Communication and Awareness Effort8.Focus on Customers and Results9.Structure Around the Organization’s Needs10.Implement Regulated Program Management11.Build Teaming and Employee Involvement Culture
1. Establish Recognition of the Need2. Provide Leadership Commitment and Support3. Develop Six Sigma Strategy and Deployment Plan4. Incorporate Enterprise-Wide Scope
12.Manage Controversy and Confrontation13.Demand Frequent Measurement and Feedback14.Implement a Structured Project Close-Out Process15.Provide Recognition and Rewards16.Leverage Successes and Stay the Course
PLAN
DEPLOY
EXECUTE
Success Equals 80% Leadership / 20% ToolsSuccess Equals 80% Leadership / 20% Tools
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business ExcellenceBusiness ExcellenceA Scaleable DeploymentA Scaleable Deployment
Definition of Leadership ExpectationsOrganization for Successful Deployment
Agreement on Burning PlatformsDetailed Implementation PlanningCommunication/Awareness Plan
Macro Charter DevelopmentImprovement Resource/Capacity Management
Project Selection and ScopingBaseline Performance and Improvement Goals
Validated BenefitsEducation Planning
Customized Education ModulesProject/Candidate/Team Selection Launch
Definition of Leadership ExpectationsOrganization for Successful Deployment
Agreement on Burning PlatformsDetailed Implementation PlanningCommunication/Awareness Plan
Macro Charter DevelopmentImprovement Resource/Capacity Management
Project Selection and ScopingBaseline Performance and Improvement Goals
Validated BenefitsEducation Planning
Customized Education ModulesProject/Candidate/Team Selection Launch
Business ExcellenceBusiness ExcellenceImprovement StrategyImprovement Strategy
(Fact(Fact--Based, NeedsBased, Needs--Driven)Driven)
Customized Implementation
One SizeFits All
FadPrograms
Business Excellence LaunchThe Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business ExcellenceImplementation & Deployment Planning
Task # Task Name Responsibility
Schedule Duration
123456789
101112131415
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
TB, JSDSSCMDGM, BGHH, AELP, MCRVJVMD, GMJE, BGHH, AE
Project GB Candidate Problem Statement Objectives Baseline Performance
Improvement Goals Benefits Team Annual Savings
Product Availability Matt Bush
Too many back orders. Lost sales to competitors. Extra freight charges for multiple shipments within the same month to the same customer.
Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds current fill rate 100% fill rate
No lost sales, no extra freight charges increase customer
satisfaction and sales
Improve Market/Product Strategy process
Rob UrryOur Market strategy and product definition process will not scale with our current structure
Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs
Increased revenue from new products
Better alignment and innovation between customer/market needs and features/offerings
Production Planning and Execution
Dan Markosian
The MPS is not in sync with the SOP and /or Resource planning. Planning parameters, like lot sizes, safety inventory, lead times, capacity, not accurate or not optimized.
Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the month. Consider selected rate-based scheduling and point-of-use (POU) stocking to reduce kitting
Actual production compared to demand plan and customer order fill rate
Actual production 98% of MPS
Reduction in cycle times, increased flexibility and
responsiveness to change, less reschedules and firefighting
Dan Markosian-Master Scheduler(GB); Team: Kurt Jensen-Production Supervisor F/A, Nick Athens-Purchasing Buyer, Kim Takemori-Order Admin Manager
Material Planning Process
Sr. Director of Planning and
Materials
Too much variation/noise in the process. This causes excessive freight, wrong inventory parts, material shortages, and manufacturing inefficiencies. In addition it requires a lot of overhead to manage it.
Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock). Current material
shortages
On-time availability of material. 100% PO confirmation. 100% exception acknowledgement, 0% PO discrepancies. Advance shipping notices.
Reduction in stockouts
Supplier selection, performance measurement and development
Rick LambournePoor performing suppliers destroy value and create too much variability in the supply chain.
Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers) Current supplier
performance
Fix or phase out C & D suppliers. Reduce the number of vendors.
Rick Lambourne-Director of Procurement and Sourcing (GB); Team: Paul Howard-Director DigiTech Engineering, Linda Grow-Sr. Buyer, James Anderson-Materials Engineer, Christeen Zhao-Sourcing Agent
Component Selection and Qualification Process
Alan Ottley
Lack of formal part evaluation process creates quality cost and disruption problems. Making specs artificially tight because we don't design to tolerances that our suppliers can meet. The working range of the designs are tighter than supplier specs..
Formal material selection and qualification process and promotion of the preferred materials
Time spent bandaiding things due to out of spec tolerances
100% of new parts subject to a formal evaluation and approval process. No non-approved parts are selected when a preferred alternative exists
Improved component quality and reliability, reduction in the number of component part numbers and associated
overhead cost
Alan Ottley-Outsourcing Engineer (GB); Team: James Anderson-Materials Engineer, Raul Soto-Mfg Supervisor, Rob Deulhlmeier-Hardware Engineer
Product Development Process Improvement
John Hanson
Our current product development process - has too many steps and doesn’t allow for convenient executive review; also doesn’t incorporate software development processes. Poor record of making ship dates
Develop the overall framework and standardize the product development process within Harman Pro. Executive review of all new products in one hour.
Current new product release to Mfg. vs. business plan
On-time and on-budget delivery of new products.
Significant reduction in time-to-market and incremental
revenue/market share, increased growth through new product
leadership
John Hanson-VP Engineering Musical Instruments (GB); Team: Rich Ireland- Director of Lexicon Pro Engineering Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer
Project
Improve market/products strategy process
Cycle Counting Process
Product Availability
New Product Design Verification
Product Development Process Improvement
Design for Manufacturing (DFM)
Software development and release process
Recertification of B-Stock
Production Planning and Execution
Material Planning Process
Supplier selection, performance measurement and development
Component Selection and Qualification Process
Obsolete Inventory
James Anderson XMatt Bush XDave Fata XFrederick GabrielJohn Hanson XHema Heimuli
Roger Johnsen XKelly KightlyRick Lambourne X
Craig Lawson XPaul Marconi X
Dan Markosian XAlan Ottley XBill Paulos XMick QuigleyRandy ThordersonSteve TownsendRob Urry XElpitha Votsis
Verner Pekarek X XLynn Alley XTammy Allen XDean AthensNick Athens XRob BoatrightTeresa BrinkerhoffBob PlankenHeather CowdellDavid Bybee X
Alberto CallejaLarry CorrieaPaul Day XRob Deulhlmeier XJon Duffin X
Merideth FoardJim GaryLinda Grow XPaul Howard X
Strategic Project Opportunities and BenefitsStrategic Project Opportunities and Benefits
CrossCross--FunctionalFunctionalCandidate/Team SelectionCandidate/Team Selection
CustomizedCustomizedEducationEducation•• KaizenKaizen•• LeanLean•• Six SigmaSix Sigma•• Leadership SkillsLeadership Skills•• TeamingTeaming•• Project ManagementProject Management
Deployment andDeployment andImplementationImplementation
PlanPlan
“Macro Charter”Double Revenue
Every 5 Years
Become Audio/Video
COE for H-Pro
Dominate Guitar Signal
Processing Market
Aggregate Rank
Project GB Candidate Problem Statement Objectives 10 9 8
Improve market/products strategy process Rob Urry-President (GB); Team:
Our market strategy and product definition process will not scale with our current structure
Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs 10 9 9 253
Cycle Counting Process
Bill Paulos-Assistant Controller (GB); Team: Georgeann Nichols-Inventory Analyst, Jeff Thompson-Cost Accounting Manager, Richard Rhees-IT
Currently we are doing reactive cycle counting, putting out fires, not using an organized process by cycle counting system generated cycle counts.
Audit the process anf fix any gaps
9 9 9 243
Product Availability Matt Bush
Too many back orders. Lost sales to competitors. Extra freight charges for multiple shipments within the same month to the same customer.
Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds
9 9 9 243
New Product Design Verification
Roger Johnsen-Senior Director Eng Services (GB); Team: Ernie Morales – Regulatory Engineer, Mark Kohagen – Hardware Engineer, Doug Robinson – Mechanical Designer
This causes quality issues, returns and bad customer experience.
Define product verification testing process for electical and mechanical
9 10 7 236
Product Development Process Improvement
John Hanson-VP Engineering Musical Instruments (GB); Team: Paul Howard-Engineering Manager, Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer
Our current product development process - has too many steps and doesn’t allow for convenient executive review; also doesn’t incorporate software development processes. Poor record of making ship dates
Develop the overall framework and standardize the product development process within Harman Pro. Executive review of all new products in one hour.
9 8 8 226
Design for Manufacturing (DFM)
Paul Marconi-Director of Mfg Eng (GB); Team:Steve Young-Mfg Eng Mgr, David Bybee-CAD/PCB Designer, Gary Stout-Mechanical Design Engineer
Designs with high variability create scrap, rework, inefficiency and high warranty costs.
Robust designs (guidelines) that fit our manufacturing process. Pilot Valor and Boothroyd-dewhurst tools. Post-mortem failure review.
8 9 8 225
Software development and release process
Lynn Alley-VP Pro Eng (GB); Team: Rick Krieifeldt-VP SDIG
Need a consistent and docummented source control methodology. Currently we only have a source code control system so no basis for tracking defect rates or other quality metrics (bug tracking). Need better change management, configuration management. Software is released with "unshippable" software bugs.
Improve the quality of software releases. Ability to incorporate industry standard source control and bug tracking tools
8 9 7 217
Recertification of B-Stock
Dave Fata- Director of Sales Operations (GB); Team: Jim Ure-Technical Suppoort Manager, Rick Tanga-Service/Repair Manager, John Duffin-Director of Engineering, Jeff Percival-Manufacturing Engineering
Unreliable / Outdated products / old releases of software gets shipped to customers, which gives us perception of poor quality. RTS inventory dollars are too high. Returned inventory in a non-nettable location for months.
100% certainty of quality for B-Stock in inventory
8 10 4 202
Production Planning and Execution
Dan Markosian-Master Scheduler(GB); Team: Kurt Jensen-Production Supervisor F/A, Nick Athens-Purchasing Buyer, Kim Takemori-Order Admin Manager
The MPS is not in sync with the SOP and /or Resource planning. Planning parameters, like lot sizes, safety inventory, lead times, capacity, not accurate or not optimized.
Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the 8 8 6 200
Material Planning Process New guy
Too much variation/noise in the process. This causes excessive freight, wrong inventory parts, material shortages, and manufacturing inefficiencies. In addition it requires a lot of overhead to manage it.
Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock).
8 8 6 200
Part Number Rationalition and reduction Jon Duffin
Preferred parts have not been identified and promoted. Identical parts are listed under duplicate part numbers (especially for BSS products) resulting in purchasing and inventory inefficiencies.
Reduce number of parts down to the preferred componets. Use the same part across brands
9 5 7 191
Supplier selection, performance measurement and development
Rick Lambourne-Director of Procurement and Sourcing (GB); Team: Paul Howard-Director DigiTech Engineering, Linda Grow-Sr. Buyer, James Anderson-Materials Engineer, Christeen Zhao-Sourcing Agent
Poor performing suppliers destroy value and create too much variability in the supply chain.
Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers)
7 7 7 189
Component Selection and Qualification Process
Alan Ottley-Outsourcing Engineer (GB); Team: James Anderson-Materials Engineer, Raul Soto-Mfg Supervisor, Rob Deulhlmeier-Hardware Engineer
Lack of formal part evaluation process creates quality cost and disruption problems.
Formal material selection and qualification process and promotion of the preferred materials
7 7 7 189
Obsolete Inventory
Craig Lawson-Controller (GB); Team:Paul Day-Senior Planner, Andrew Lovegrove-Hardware Engineer, Tammy Allen-Production Coordinator
We have too much obsolete inventory. Reserve is 25% of inventory. Large carrying cost.
Identify and disposition obsolete inventory. Slow the flow, analyze and understand drivers
7 7 7 189
Project SelectionProject SelectionModelModel
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business ExcellenceAccelerated Deployment Plan
Deployment PlanningDeployment Planning
Project KickoffsProject Kickoffs
Green Belt EducationGreen Belt Education
Yellow Belt EducationYellow Belt Education
Champion EducationChampion Education
Process Owner and Process Owner and Awareness EducationAwareness Education
Basic Improvement Basic Improvement Skills EducationSkills Education
Completion of 20Completion of 20--22 22 Projects (DMAIC)Projects (DMAIC)
May June July August May June July August September October NovemberSeptember October November
Review PointsThe Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Communication AwarenessEstablish Recognition of Need•Burning Platforms, Pain Points•Consequences on No Action•Benefits of Change
Create Business Excellence Awareness•Consistent unified Message•Trickle Down, Executives to Operators•Continuous Reminders, Hits•Publicize Successes•“Stay Tuned” (What’s Next)•Internal/External Customer Updates
Use Multiple Media for Different People•Town Meeting format•Email•Mailers in Payroll (Reference Cards)•Storyboards•Video, Signage, Posters •Newsletter•Performance Metrics The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Performance Measurement: Driving the Right Behaviors to Achieve the Right Desired Results
Balanced Scorecard ApproachUse the “SMART” process
S = SpecificM = MeasurableA = AttainableR = RelevantT = Timely
Walk-Around or Good Day-Bad Day Metrics
Role specific dashboard approach, visual daily metrics (At A Minimum)
Moving toward real time, event-driven metricsSense, Interpret, Decide, Act, MeasureStandardized, Uniform Approach
“You get what you measure”
“Everything begins and ends with performance measurement”
“Be careful what you measure, you might just get it!”
Balanced Scorecard ApproachUse the “SMART” process
S = SpecificM = MeasurableA = AttainableR = RelevantT = Timely
Walk-Around or Good Day-Bad Day Metrics
Role specific dashboard approach, visual daily metrics (At A Minimum)
Moving toward real time, event-driven metricsSense, Interpret, Decide, Act, MeasureStandardized, Uniform Approach
“You get what you measure”
“Everything begins and ends with performance measurement”
“Be careful what you measure, you might just get it!”
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Kaizen vs. Lean vs. Six Sigma
KaizenKaizen
Quick Strike1-5 Day Effort
Process MappingCause & Effect
Basic “B&T” Tools
LeanLean
One Piece FlowValue Stream Mapping
Visual Controls, 5SPull Systems
KanbanSet-Up Reduction
TPM
Six SigmaSix Sigma
DMAIC, DMADV ProcessesStatistical Tools
VariationPFMEA, Cp & Cpk
Gage R&RANOVA, Hypothesis TestsDOE, Process Optimization
Simple Tactical FocusObvious “No Brainer” Fixes
ContainmentPlug Holes in Dike
Simple Tactical FocusObvious “No Brainer” Fixes
ContainmentPlug Holes in Dike
Waste, Non Value-AddedSpeed, Cycle Time
StandardizationInventory Performance
LogisticsCost Reduction
Waste, Non Value-AddedSpeed, Cycle Time
StandardizationInventory Performance
LogisticsCost Reduction
Variation ReductionComplex ProblemsProcess Capability
Defection PreventionStability, Predictability
Design, Process Excellence
Variation ReductionComplex ProblemsProcess Capability
Defection PreventionStability, Predictability
Design, Process Excellence
KnowledgeOf Tools
Focus ofImprovement
KnowledgeKnowledgeOf ToolsOf Tools
Focus ofFocus ofImprovementImprovement
Teaming and Employee InvolvementTeaming and Employee InvolvementTeaming and Employee Involvement
Closed-LoopPerformance
ClosedClosed--LoopLoopPerformancePerformance
Leadership, Recognition of Need, InnovationLeadership, Recognition of Need, InnovationLeadership, Recognition of Need, Innovation
ERP, Digitization, & Other Enabling TechnologiesERP, Digitization, & Other Enabling Technologies
Spectrum of Total Improvement Opportunities
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Kaizen vs. Lean vs. Six Sigma
Let the Improvement Opportunity drive you to the right methodologies and tools
Simple ImprovementsSimple Improvements Complex ImprovementsComplex Improvements
Deployment of Deployment of the right the right
methodologies methodologies and tools is and tools is driven by driven by
process/problem process/problem complexity
Lean?Lean? Six Sigma?Six Sigma?Kaizen?Kaizen?
KaizenKaizen
Quick Strike1-5 Day Effort
Process MappingCause & Effect
Basic “B&T” Tools
LeanLean
One Piece FlowValue Stream Mapping
Visual Controls, 5SPull Systems
KanbanSet-Up Reduction
TPM
Six SigmaSix Sigma
DMAIC, DMADV ProcessesStatistical Tools
VariationPFMEA, Cp & Cpk
Gage R&RANOVA, Hypothesis TestsDOE, Process Optimization
Simple Tactical FocusObvious “No Brainer” Fixes
ContainmentPlug Holes in Dike
Simple Tactical FocusObvious “No Brainer” Fixes
ContainmentPlug Holes in Dike
Waste, Non Value-AddedSpeed, Cycle Time
StandardizationInventory Performance
LogisticsCost Reduction
Waste, Non Value-AddedSpeed, Cycle Time
StandardizationInventory Performance
LogisticsCost Reduction
Variation ReductionComplex ProblemsProcess Capability
Defection PreventionStability, Predictability
Design, Process Excellence
Variation ReductionComplex ProblemsProcess Capability
Defection PreventionStability, Predictability
Design, Process Excellence
KnowledgeOf Tools
Focus ofImprovement
KnowledgeKnowledgeOf ToolsOf Tools
Focus ofFocus ofImprovementImprovement
Teaming and Employee InvolvementTeaming and Employee InvolvementTeaming and Employee Involvement
Closed-LoopPerformance
ClosedClosed--LoopLoopPerformancePerformance
Leadership, Recognition of Need, InnovationLeadership, Recognition of Need, InnovationLeadership, Recognition of Need, Innovation
ERP, Digitization, & Other Enabling TechnologiesERP, Digitization, & Other Enabling Technologies
Spectrum of Total Improvement Opportunities
complexity
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
DMAIC: The Common Language of Improvement
Stop feeding your organization 6 flavors of the same thing – It confuses people.
Stick to DMAIC as the common structured language of improvement.
Consistency of the approach is critical to success.
Integrate Kaizen, Lean, and Six Sigma – Deploy the right tools to the highest impact opportunities.
Deliverable Tool In Process Complete
66 σσ Project StatusProject StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceProcess MapProcess MapFishbone DiagramFishbone DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poke--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Deliverable Tool In Process Complete
Project StatusKaizen Project StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceValue Stream MapFishbone/CED DiagramFishbone/CED DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poka--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Project CharterSIPOC Diagram
Deliverable Tool In Process Complete
66 σσ Project StatusProject StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceProcess MapProcess MapFishbone DiagramFishbone DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poke--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Deliverable Tool In Process Complete
Project StatusLean Project StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceValue Stream MapFishbone/CED DiagramFishbone/CED DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poka--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Project CharterSIPOC Diagram
Deliverable Tool In Process Complete
66 σσ Project StatusProject StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceProcess MapProcess MapFishbone DiagramFishbone DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poke--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Deliverable Tool In Process Complete
66 σσ Project StatusProject StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.
DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE
Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits
CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceValue Stream MapFishbone/CED DiagramFishbone/CED DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK
DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions
Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans
DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poka--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff
PROJECT INFORMATIONProject #
Project Name
Objective:
COPQ - Internal: -$ COPQ - External: -$
Annual Cost Savings -$
ATTACHMENTS
Problem Statement
Baseline Performance
Project Objective
Project Scope
Deliverable(s)
Financial Benefits
Project CharterSIPOC Diagram
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
DMAIC Problem-Solving Methodology
Define Measure Analyze Improve ControlWhat is the problem?
What is your project objective?
What is the improvement goal?
What are the benefits?
What are your next steps?
What is the current or baseline performance?
Have you confirmed the problem with data and facts?
What are the financial benefits of changing?
What are the major root causes of the problem?
What are the options for change?
What is the best option?
What is the schedule for implementing the change?
Are there any barriers to your plans for change?
What metric(s) will you monitor to measure success?
Do you have buy-in and support from all parties?
How will you measure results after change?
Does the change solve your problem?
Are other actions necessary?
How will you sustain the improvement?
CRITICAL SUCCESS FACTORCRITICAL SUCCESS FACTOR
Common Common ““thoughtwarethoughtware”” for Kaizen, Lean, and Six Sigmafor Kaizen, Lean, and Six Sigma
Standardized Improvement Structure and DisciplineStandardized Improvement Structure and Discipline
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
Business ExcellenceContinual Improvement Management Process
Project GB Candidate Problem Statement Objectives Baseline Performance
Improvement Goals Benefits Team Annual Savings
Product Availability Matt Bush
Too many back orders. Lost sales to competitors. Extra freight charges for multiple shipments within the same month to the same customer.
Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds current fill rate 100% fill rate
No lost sales, no extra freight charges increase customer
satisfaction and sales
Improve Market/Product Strategy process
Rob UrryOur Market strategy and product definition process will not scale with our current structure
Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs
Increased revenue from new products
Better alignment and innovation between customer/market needs and features/offerings
Production Planning and Execution
Dan Markosian
The MPS is not in sync with the SOP and /or Resource planning. Planning parameters, like lot sizes, safety inventory, lead times, capacity, not accurate or not optimized.
Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the month. Consider selected rate-based scheduling and point-of-use (POU) stocking to reduce kitting
Actual production compared to demand plan and customer order fill rate
Actual production 98% of MPS
Reduction in cycle times, increased flexibility and
responsiveness to change, less reschedules and firefighting
Dan Markosian-Master Scheduler(GB); Team: Kurt Jensen-Production Supervisor F/A, Nick Athens-Purchasing Buyer, Kim Takemori-Order Admin Manager
Material Planning Process
Sr. Director of Planning and
Materials
Too much variation/noise in the process. This causes excessive freight, wrong inventory parts, material shortages, and manufacturing inefficiencies. In addition it requires a lot of overhead to manage it.
Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock). Current material
shortages
On-time availability of material. 100% PO confirmation. 100% exception acknowledgement, 0% PO discrepancies. Advance shipping notices.
Reduction in stockouts
Supplier selection, performance measurement and development
Rick LambournePoor performing suppliers destroy value and create too much variability in the supply chain.
Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers) Current supplier
performance
Fix or phase out C & D suppliers. Reduce the number of vendors.
Rick Lambourne-Director of Procurement and Sourcing (GB); Team: Paul Howard-Director DigiTech Engineering, Linda Grow-Sr. Buyer, James Anderson-Materials Engineer, Christeen Zhao-Sourcing Agent
Component Selection and Qualification Process
Alan Ottley
Lack of formal part evaluation process creates quality cost and disruption problems. Making specs artificially tight because we don't design to tolerances that our suppliers can meet. The working range of the designs are tighter than supplier specs..
Formal material selection and qualification process and promotion of the preferred materials
Time spent bandaiding things due to out of spec tolerances
100% of new parts subject to a formal evaluation and approval process. No non-approved parts are selected when a preferred alternative exists
Improved component quality and reliability, reduction in the number of component part numbers and associated
overhead cost
Alan Ottley-Outsourcing Engineer (GB); Team: James Anderson-Materials Engineer, Raul Soto-Mfg Supervisor, Rob Deulhlmeier-Hardware Engineer
Product Development Process Improvement
John Hanson
Our current product development process - has too many steps and doesn’t allow for convenient executive review; also doesn’t incorporate software development processes. Poor record of making ship dates
Develop the overall framework and standardize the product development process within Harman Pro. Executive review of all new products in one hour.
Current new product release to Mfg. vs. business plan
On-time and on-budget delivery of new products.
Significant reduction in time-to-market and incremental
revenue/market share, increased growth through new product
leadership
John Hanson-VP Engineering Musical Instruments (GB); Team: Rich Ireland- Director of Lexicon Pro Engineering Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer
Strategic Project OpportunitiesDouble Revenue
Every 5 Years
Become Audio/Video
COE for H-Pro
Dominate Guitar Signal
Processing Market
Aggregate Rank
Project GB Candidate Problem Statement Objectives 10 9 8
Improve market/products strategy process Rob Urry-President (GB); Team:
Our market strategy and product definition process will not scale with our current structure
Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs 10 9 9 253
Cycle Counting Process
Bill Paulos-Assistant Controller (GB); Team: Georgeann Nichols-Inventory Analyst, Jeff Thompson-Cost Accounting Manager, Richard Rhees-IT
Currently we are doing reactive cycle counting, putting out fires, not using an organized process by cycle counting system generated cycle counts.
Audit the process anf fix any gaps
9 9 9 243
Product Availability Matt Bush
Too many back orders. Lost sales to competitors. Extra freight charges for multiple shipments within the same month to the same customer.
Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds
9 9 9 243
New Product Design Verification
Roger Johnsen-Senior Director Eng Services (GB); Team: Ernie Morales – Regulatory Engineer, Mark Kohagen – Hardware Engineer, Doug Robinson – Mechanical Designer
This causes quality issues, returns and bad customer experience.
Define product verification testing process for electical and mechanical
9 10 7 236
Product Development Process Improvement
John Hanson-VP Engineering Musical Instruments (GB); Team: Paul Howard-Engineering Manager, Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer
Our current product development process - has too many steps and doesn’t allow for convenient executive review; also doesn’t incorporate software development processes. Poor record of making ship dates
Develop the overall framework and standardize the product development process within Harman Pro. Executive review of all new products in one hour.
9 8 8 226
Design for Manufacturing (DFM)
Paul Marconi-Director of Mfg Eng (GB); Team:Steve Young-Mfg Eng Mgr, David Bybee-CAD/PCB Designer, Gary Stout-Mechanical Design Engineer
Designs with high variability create scrap, rework, inefficiency and high warranty costs.
Robust designs (guidelines) that fit our manufacturing process. Pilot Valor and Boothroyd-dewhurst tools. Post-mortem failure review.
8 9 8 225
Software development and release process
Lynn Alley-VP Pro Eng (GB); Team: Rick Krieifeldt-VP SDIG
Need a consistent and docummented source control methodology. Currently we only have a source code control system so no basis for tracking defect rates or other quality metrics (bug tracking). Need better change management, configuration management. Software is released with "unshippable" software bugs.
Improve the quality of software releases. Ability to incorporate industry standard source control and bug tracking tools
8 9 7 217
Recertification of B-Stock
Dave Fata- Director of Sales Operations (GB); Team: Jim Ure-Technical Suppoort Manager, Rick Tanga-Service/Repair Manager, John Duffin-Director of Engineering, Jeff Percival-Manufacturing Engineering
Unreliable / Outdated products / old releases of software gets shipped to customers, which gives us perception of poor quality. RTS inventory dollars are too high. Returned inventory in a non-nettable location for months.
100% certainty of quality for B-Stock in inventory
8 10 4 202
Production Planning and Execution
Dan Markosian-Master Scheduler(GB); Team: Kurt Jensen-Production Supervisor F/A, Nick Athens-Purchasing Buyer, Kim Takemori-Order Admin Manager
The MPS is not in sync with the SOP and /or Resource planning. Planning parameters, like lot sizes, safety inventory, lead times, capacity, not accurate or not optimized.
Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the 8 8 6 200
Material Planning Process New guy
Too much variation/noise in the process. This causes excessive freight, wrong inventory parts, material shortages, and manufacturing inefficiencies. In addition it requires a lot of overhead to manage it.
Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock).
8 8 6 200
Part Number Rationalition and reduction Jon Duffin
Preferred parts have not been identified and promoted. Identical parts are listed under duplicate part numbers (especially for BSS products) resulting in purchasing and inventory inefficiencies.
Reduce number of parts down to the preferred componets. Use the same part across brands
9 5 7 191
Supplier selection, performance measurement and development
Rick Lambourne-Director of Procurement and Sourcing (GB); Team: Paul Howard-Director DigiTech Engineering, Linda Grow-Sr. Buyer, James Anderson-Materials Engineer, Christeen Zhao-Sourcing Agent
Poor performing suppliers destroy value and create too much variability in the supply chain.
Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers)
7 7 7 189
Component Selection and Qualification Process
Alan Ottley-Outsourcing Engineer (GB); Team: James Anderson-Materials Engineer, Raul Soto-Mfg Supervisor, Rob Deulhlmeier-Hardware Engineer
Lack of formal part evaluation process creates quality cost and disruption problems.
Formal material selection and qualification process and promotion of the preferred materials
7 7 7 189
Obsolete Inventory
Craig Lawson-Controller (GB); Team:Paul Day-Senior Planner, Andrew Lovegrove-Hardware Engineer, Tammy Allen-Production Coordinator
We have too much obsolete inventory. Reserve is 25% of inventory. Large carrying cost.
Identify and disposition obsolete inventory. Slow the flow, analyze and understand drivers
7 7 7 189
Business Excellence Steering Committee
Project Selection Model
BusinessExcellenceProjectExecution
“The Project Hopper”
BusinessPerformanceMetrics
EmployeeInvolvement
The Center for Excellence in Operations, Inc.
© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)
The Business Excellence CultureThe Business Excellence Culture
Without data, you are just another Without data, you are just another person with an opinion.person with an opinion.
• Unless you are placed at a level at which your opinion becomes data and facts.
• If you are fortunate enough to be at this level and you lead your organization this way, you and your people make many incorrect decisions without data and facts.
• EI is experiencing this “first hand” through their Business Excellence deployment.
• “You don’t know what you don’t know.”
The Center for Excellence in Operations, Inc.
Sponsored by
Implementing Lean/Six Sigma in Complex Industries
A Case Study at Endicott Interconnect Technologies, Inc.
Terence T. Burton, President
The Center for Excellence in Operations, Inc.
Terence T. Burton, PresidentBrad VanBrunt, Vice President , Quality
Endicott, Ney YorkBedford, New Hampshire
Question and Answer Session
Implementing Lean/Six Sigma in Complex Industries: A Case Study at Endicott
Interconnect Technologies, Inc.
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