Prepared by Dr. Leonard R. Hepp All Rights Reserved Lean Six Sigma Case Study Examples Prepared by Dr. Leonard R. Hepp January 5, 2010 All Rights Reserved

Prepared by Dr. Leonard R. Hepp

All Rights Reserved

Lean Six SigmaCase Study Examples

Prepared by Dr. Leonard R. HeppJanuary 5, 2010

All Rights Reserved


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Product Specs Set &

Filed w/States for Approval

Product Concept is

Conceived & Validated

Product Launched in Distribution Channels

Noble Certainty: Regulatory Approval Time Is Uncontrollable

Production

Sales &Distribution

Service Solutions

Product Competitiveness

Speed toMarket/Vitality

Product Features

Product Concept

ProductLaunch

Regulatory Approval

0

50

100

150

200

250

300

State

Day

s

Single Product Regulatory Approval Times by State

Approval of 80% of all States and Key States Needed for Launching a Product

– Critical number of States needed for effective product launch

– Within the total of all approving States, at least 80% of Key States (high sales) must have approved

First Time Data Has

Been Seen!

Data Pages

Endorsement

Policy Form

Rider

-100 0 100 200 300 400

1

510

20304050607080

9095

99

Data

Per

cent

Average Baseline Performance: 126 Days with Standard Deviation of 90 Days Range of 0 to 642 Days

40% of Key States Approved in 100 days50% of Non-Key States in 100 Days


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Improved Performance:

Average Performance 90 Days with Standard Deviation 70 Days 80% of State Approvals now within 60 DaysA Major "Ah-Ha"...ability to deliver a significant % in ZERO days.

After

Before

-200 -100 0 100 200 300 400 500

1

5

10

20304050607080

90

95

99

Data

Per

cent

Normal Probability Plot for Total Span By Period

After

Before

-200 -100 0 100 200 300 400 500

1

510

20304050607080

9095

99

Data

Per

cent


Competitor

GE 2001/02

0 100 200

1

5

10

20

3040506070

80

90

95

99

Data

Per

cent

Normal Probability Plot for Avg State Span By CompanyCompetitor

GE 2001/02

0 100 200

1

5

10

20

3040506070

80

90

95

99

Data

Per

cent

Normal Probability Plot for Avg State Span By Company

50 day difference in state average

CompetitiveBenchmark

Key States

Non-Key States

After

Before

-200 -100 0 100 200 300 400 500

1

510

20304050607080

9095

99

DataP

erce

nt



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-500 -250 0 250 500 750 1000

USLUSL

Process Capability Analysis for TimeSort

USL

Target

LSL

Mean

Sample N

StDev (Within)

StDev (Overall)

Cp

CPU

CPL

Cpk

Cpm

Pp

PPU

PPL

Ppk

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

PPM < LSL

PPM > USL

PPM Total

180.000

*

*

102.719

121

119.738

189.418

*

0.22

*

0.22

*

*

0.14

*

0.14

*

181818.18

181818.18

*

259327.85

259327.85

*

341640.04

341640.04

Process Data

Potential (Within) Capability

Overall Capability Observed Performance Exp. "Within" Performance Exp. "Overall" Performance

Within

Overall

“I don’t know where documents go after scanning”

“No clear process for what is being scanned and when.”

“Searching for documents is too time consuming.”

“Turnover and loss of institutional knowledge have caused process breakdowns.”

“Huge backlog that keeps building up.”

“Do not even know what a comprehensive deal file should contain for legal, customer reference ...”

“The late submission of [closing documentation due to backlog issues] … is raising our level of concern regarding operations”

>$30B market worthBaseline Performance Average Time To Locate a document...

515 minutes with Standard Deviation 780 MinutesRange of 0 to >4500 minutes (basically lost document issues)


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1 3 4 5 6 7

0

100

200

300

400

500

600

700

800

Subgroupsort

Tim

eS

ort

Boxplots of TimeSort by Subgroup(means are indicated by solid circles)

CMS

PF

SF

-2000 -1000 0 1000 2000 3000 4000

1

510

20304050607080

9095

99

Data

Per

cent

Normal Probability Plot for Time_Min By Bus

Segmentation AnalysisBest-in-Class Identified

After Project Results:1.5 minutes Average with 1 minute standard deviationElimination of Lost Documents


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R e s o l u t i o n o f E v e n t

S u p p l i e r

SSS u p p l i e r

SSS u p p l i e r

SSSSSSIII n p u t

( U s e n o u n s )

III n p u t

( U s e n o u n s )

IIIII n p u t

( U s e n o u n s )

PPP r o c e s s

( U s e v e r b s )

PPPPP r o c e s s

( U s e v e r b s )

OOO u t p u t

( U s e n o u n s )

OOOOO u t p u t

( U s e n o u n s )

CCC u s t o m e r

CCCCC u s t o m e r

K e y Q u e s t i o n s

W h a t a r e t h e p r o c e s s b o u n d a r i e s ?S t a r t :

S t o p :

R e - E n g i n e e r E x i s t i n g P r o c e s s

1

2

3

4

P M , L P , R e c r u i t m e n t , R e t e n t i o n

B e n e f i t s , P a y P r a c t i c e s

E v e n t o c c u r s

R e s o l u t i o n o f e v e n tL e a d e r s h i p

H u m a n R e s o u r c e s

E m p l o y e e s

E m p l o y e e C o m p l a i n t

E m p l o y e e

E v e n t t a k e s p l a c e

I n t e r a c t i o n b e t w e e n e m p l o y e e & G E F A

G E F A i n v e s t i g a t e s

G E F A p r o v i d e s p o s i t i o n t o e m p l o y e e

E m p l o y e e a c c e p t s E m p l o y e e r e j e c t s

C o m p l a i n t f i l e d

W h a t i s i n c l u d e d / e x c l u d e d i n t h e s c o p e o f t h i s p r o j e c t ?I n c l u d e s :

E x c l u d e s :

W h a t i s t h e U n i t , O p p o r t u n i t y , D e f e c t ?

H a s t h i s p r o c e s s m a p b e e n v a l i d a t e d b y k e y p e o p l e ?

U n i t = e a c h c o m p l a i n t ; O p p o r t u n i t y = o n e p e r a c t i o n ; D e f e c t = E a c h c o m p l a i n t , b a d a c t i o n

Y e s

S u b p r o c e s s e s i n c l u d e :

- P e r f o r m a n c e M a n a g e m e n t- L a b o r P r a c t i c e s- R e c r u i t m e n t- R e t e n t i o n

E N D

G O T O S T E P 2

25

30

35

40

45

50

55

60

65

70

Below 50:

Needs Improvement

51-69: Caution

70 +: Great Score

Lowest Scoring Mgmt. Practices QuestionsLowest Scoring Mgmt. Practices Questions

Drill Down On 6 Lowest Themes

Overall Management Practices Score = 47

Management of Associate Complaints50% lead to next level resolution requirementsSignificant legal cost issues in some casesMorale & Employee Engagement is Suffering (Average Survey Satisfied Ranking-@47%)


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Policy & Procedure 2001 InventoryPolicy & Procedure 2001 Inventory Too Many PoliciesToo Many Policies

2001 Bad Complaints2001 Bad Complaints Inconsistent Adherence:Inconsistent Adherence:Focus On Labor Practice & Performance ManagementFocus On Labor Practice & Performance Management

• Policy & Practices:

• Unstable Environment: Massive Restructuring & Turmoil in Environment (Acquisition, Integration, Downsizing)

Quantity of Policies

Adherence to Policies/Practices

Communication

Huge Variation in Practices

After Project:Less than 5% next resolution issuesNear elimination of legal case issuesQuality-Growth Survey…Average @65%

Mgmt Practice Changes

Policy Changes

Communication

Bad Complaint Complaints that occurred when the proper Policy & Process were not followed

Good Complaint Complaints that occurred when the proper Policy & Process were followed

Tracking Mechanism Put in PlaceTracking Mechanism Put in Place

IMPROVEMENT FOCUS

0

2

4

6

8

10

12


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Sales Leaders' Compensation Plans Stakeholder Assessment

NameStronglyAgainst

ModeratelyAgainst Neutral

Moderately Supportive

Strongly Supportive Issues & Concerns Identify "Win" Drivers Influence Strategy

Who can help?

CEO X Is variable comp an appropriate % of total

comp?

Overall Business Peformance

Strong execution focus. Keep informed of change in direction.

Periodic updates.

Laming Project Team

Business GMs X Sales/Business Goals, Mix, Market Competitive,

Retention, Culture

Develop repeatable process that incents

the desired behaviors which results in

meeting key goals.

Keep GMs involved along the

way as project develops.

Laming, Mays

Sales Leaders X X Will the plans use measures that I feel are important to my business? Will the

plan metrics in the plan be given the right

weight? Will I be paid the correct level of

compensation

Fair, Equitable, Competitive,

Significant upside opportunity, Strong link

to "my" strategy

Communication Plan - emphasis benefits of new

plan

Business GMs

CompensationTeam

X Will the comp plan be easy to administer?

Will the plans be consistent across all

businesses?

Repeatable process, maximize automation,

Fair, equitable, competitive

Involvment in the solution

Mays

Reviewed Sales Leader & Business Leader VOC Collected at beginning of project

Reviewed benchmarked information

Project team brainstormed potential variation sources

Validated finding with HR & Business Leaders

Reviewed Sales Leader & Business Leader VOC Collected at beginning of project

Reviewed benchmarked information

Project team brainstormed potential variation sources

Validated finding with HR & Business Leaders

DataData--Driven ApproachDriven Approach

Lack of Leadership Mandate

Lack of Centralized Accountability

Lack of a Process

Key Findings

Created CAP Plan to Communicate Shared Need & Mobilize Commitment

Designed a Centralized Process

Key Improve Actions

Mobilizing Commitment&

Creating Shared Need

Need to Focus On

Multiple, competing Compensation approachesNo standards for key elementsNo cross-business comparisons or market differentiations.


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Business HRMBus Leader &Sr. Sales Leader

Enter Results Into Sales Leader Comp

ModelYes

NoAre there

any exceptions?Are there

any exceptions?

Send Bonus Target to Sr. Sales Leader for Review/Approval

Input Sr. Sales Leader Changes into Sales

Leader Comp Model & Document Reason for

Exception

Send Approved Sales Leader Comp Model to Comp COE – One

Week Prior to Planned Communication Date

Discuss Exceptions with HRM

Collect Results forRequired ElementsCollect Results forRequired Elements

Sr. Sales LeaderCommunicate Sales

Bonus to Sales Leader(as appropriate) & Notify

Payroll

Sr. Sales LeaderCommunicate Sales

Bonus to Sales Leader(as appropriate) & Notify

Payroll

Comp COE VP Comp

Review Plans

Discuss Plan with Business Leader, SHRM & SVP-HR (if needed) & Approve

Document Final Approval

Cycle Time = 5 business days

Actions Taken Ne

w S

EV

Ne

w P

RO

B

Ne

w D

ET

Ne

w R

PN

Rev iew Process

Plan not receiv ed by due date

Delay in rev iew /approval. 9

Delay in submittal 9

Publish timeline and schedule rev iew s 3 243

Build trotter matrix to track completion Stev e Ow ens

M atrix built & communicated 9 3 1 27

Rev iew Process

Plan not receiv ed by due date

Sales Ldr w on't know w hat they 're acountable for 9

Delay in submittal 9

Publish timeline and schedule rev iew s 3 243

C ommunicate

model & requirements. C oord w / AIM team to identify S tev e Ow ens

M odel communicated. 9 3 1 27

Pay ments outs ide of plan

N ot paid according to plan

Potential of ov erpaying/underpaying 9

Dev iation from process 3 N one 9 243

Develop a process to audit

C omp C O E/1Q

Process identified 9 3 3 81

Plan is rev iew d by H R C omp C OE

Submitted plan doesn't meet requirements

Plan is out of spec

9 Business dev iates from process

9 C omp C OE rev iew s all plans

1 81 If can't meet plan requirements in 2003, must hav e plan for meeting

Business H RM

Issue identified and communicated that must hav e a plan for '04 9 9 1 81

Acceptance of change

Sales leaders resisting change

Sales leaders leav e/demotivated 9

Lack of communication & understanding 9

Rely on H RMs to prov ide data 3 243

Implement C AP plan to create shared need & mobilize commitment

Project team & SH RM s

Implement C AP plan 9 3 3 81

0

Item/Function

Potential Failure Modes

Potential E ffects of

Failure

S

E

V

Potential C auses of

Failure

P

R

O

B

C urrent Design

C ontrols

D

E

T RPN

Recommended Actions

Target Date and

Responsibility

Action Results

Strong Risk Mitigation PlanStrong Risk Mitigation Plan

Weekly status update to project teamResults posted to QuickPlace

Weekly status update to project teamResults posted to QuickPlace

Rigorous Method to Track Progress Against Feb. 28 DeadlineRigorous Method to Track Progress Against Feb. 28 Deadline

Trotter Matrix

FMEA

After ProjectSingle standards policy with 6 key criteria assessments55-95% reduction in Compensation Programs across businesses.


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89% of INVAs are Defects89% of INVAs are Defects

Count 1615 891 273 31Percent 57.5 31.7 9.7 1.1Cum % 57.5 89.2 98.9 100.0

Co

unt

Perc

ent

Department OtherManufacturingQAFinance

3000

2500

2000

1500

1000

500

0

100

80

60

40

20

0

Pareto Chart of I NVAs by Department (1/ 1/ 06 - 6/ 30/ 06)

Baseline Capability Info

Baseline Capability Info

35% of Picks are Defects35% of Picks are Defects

Count 2947 1391 251Percent 64.2 30.3 5.5Cum % 64.2 94.5 100.0

Count

Perc

ent

Department QAFinanceManufacturing

5000

4000

3000

2000

1000

0

100

80

60

40

20

0

Pareto Chart of PI CKs Department (1/ 1/ 06 - 6/ 30/ 06)

Current Performance (1H06)Non-Manufacturing Transactions are “Defects”

56.5% of Transactions are Defects56.5% of Transactions are Defects

Count 3220 3006 1142 31Percent 43.5 40.6 15.4 0.4Cum % 43.5 84.1 99.6 100.0

Count

Perc

ent

Department OtherQAFinanceManufacturing

8000

7000

6000

5000

4000

3000

2000

1000

0

100

80

60

40

20

0

Pareto Chart of All Transactions (PICKs and INVAs) by Department

0.565 DPU/DPO

565,000 DPMO

1.3 Sigmast

Process Yield = 43.5%

Project Focus

QFD: Big Y’s to Little y’s

1

1

5

3

3

Sam

ple andR

elease

3

3

9

9

9

Co

nsu

mp

tion

(PIC

K, IN

VA

)

9

9

1

1

3

Cycle C

ounts

114Timely Data

9

9

1

9

Bin C

ard R

econciliation

9

9

1

9

Batch R

ecord R

econciliation

5Accuracy

5Time

5Resources

3Ease of Use

Importance

Customer Needs

1

1

5

3

3

Sam

ple andR

elease

3

3

9

9

9

Co

nsu

mp

tion

(PIC

K, IN

VA

)

9

9

1

1

3

Cycle C

ounts

114Timely Data

9

9

1

9

Bin C

ard R

econciliation

9

9

1

9

Batch R

ecord R

econciliation

5Accuracy

5Time

5Resources

3Ease of Use

Importance

Customer Needs

What’s

How’s

Y >>>> y

Project Focus (y’s)

Relationships

9

1

3

High

Low

Medium

52 138 142 142112

Measure

Step 1

Measure

Step 1

Missed Picks, Cycle Count Adj., MTs, Cleaning, WasteMissed Picks, Cycle Count Adj., MTs, Cleaning, Waste

Analyze

Step 6

Analyze

Step 6

Establish Process Capability

Count 322359 1107 290 180 96 41 39 29Percent 0.856.5 26.5 6.9 4.3 2.3 1.0 0.9 0.7Cum % 100.056.5 83.1 90.0 94.3 96.6 97.6 98.5 99.2

Co

un

t

Pe

rce

nt

Reason Code

4000

3000

2000

1000

0

100

80

60

40

20

0

Pareto Chart of Transactions by Reason (Non-Manufacturing)Department2 = Other

Missed Picks, Cycle Count Adjustments, Empty Containers, Cleaning and Waste represent 70% of the defects

Significant X’s

BEFORE Project:Multiple missed PICs and Count Adjustments (35% Defects)Empty, Lost, damaged Containers (18% Defects)Bar Code errors; lost signals from portable readers > “bad” data (56% Defects)


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KEY Recognized Improvements w/ New Process!

Reduced Support Resource Requirements

Centralized Manufacturing Ops Responsibilities, Centralized

< 0.05 FTE (< $5K)0.5 FTE ($60K)Finance

00.25 FTE ($15K)QA

New ProcessOld ProcessDepartment

< 0.05 FTE (< $5K)0.5 FTE ($60K)Finance

00.25 FTE ($15K)QA


0.5 Contractor ($10K)

No ResponsibilityBin Card Reconciliation

0.25 FTE ($15K) No ResponsibilityBatch Record Reconciliation

0.25 FTE ($15K) All Operators Involved

> 0.5 FTE (>$30K)

WIP Transactions


0.5 Contractor ($10K)

No ResponsibilityBin Card Reconciliation

0.25 FTE ($15K) No ResponsibilityBatch Record Reconciliation

0.25 FTE ($15K) All Operators Involved

> 0.5 FTE (>$30K)

WIP Transactions


BR Reconciliation

reduced to 20% Audit

Completed Real-Time,

During Mfg. Review

Conducted During Mfg. BR Review

Same Resource Requirements (~1 FTE), but at Savings > $50K

43.5%

1.3

565,000

OLD

119,000DPMO

88.1%Process Yield

2.7Sigmast

NEW

43.5%

1.3

565,000

OLD

119,000DPMO

88.1%Process Yield

2.7Sigmast

NEW

Observation

Ind

ivid

ua

l V

alu

e

987654321

1000000

750000

500000

250000

0

UCL=98640

LCL=-4089

Baseline New Process

_X=47276

Observation

Mo

vin

g R

an

ge

987654321

600000

450000

300000

150000

0__MR=19313

UCL=63101

Baseline New Process

LCL=0

I-MR Chart of Inventory Carrying Cost by Status

X = 424865

MR = 206943

Key, Performance Indicating Metrics!

Reduced Inventory Carryover

10X reduction On Average & Range!

After Project:Less than 0.1% PIC Defects (99.8% Reduction)95 % Reduction in empty/lost/damaged containers“Bad” Data issues reduced by 85%


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“Production Up 35% in 2008 yet Inert Gas Usage has increased by 150% … something has to change!”

Brainstorming of Gas Usage Issues

$35K77Maintenance

$36K025Process & Technical Development

$304K2785TOTAL

$91K315Quality Control – AR&D

$142K1738Manufacturing

Est. Annual Cost# with Regulators

Total # Ports w/ Opportunities

Department

$35K77Maintenance

$36K025Process & Technical Development

$304K2785TOTAL

$91K315Quality Control – AR&D

$142K1738Manufacturing

Est. Annual Cost# with Regulators

Total # Ports w/ Opportunities

Department

Root Cause: Close-up of Isolation Points

Time

SCFM

14

13

12

11

10

9

8

7

6

Building 1SCFM every 5 min

Up the Ramp.

Valve location:

Boiler Room

MA-04,-05,-06.

Valve location:

Outside MA-02

MA-07,-08.

Valve location:

Outside MA-02

MA-01,-02,-03.

Valve location:

Outside MA-01

PP1,2,

Chromatography.

Valve location:

Outside PP1

Project Opportunity:>$100K in Savings if usage is in balanceStreamlined processes and proceduresPosition for growth in 2009


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Two Quick Fixes and One Major FixTwo Quick Fixes and One Major Fix

Root Cause Analysis

The median baseline level in Building 1 is 11.190 scfmcompared to 3.370 scfm

in Building 2

People Equipment

Methods Piping

Vacuum PumpsUse ArgonPurge

Ports left open

NMR Uses Constant ArgonPurge

Reactors DryingUnder Argon

Leaks

1 3

3

1

1

Focus is on MAFocus is on MA--04 through MA04 through MA--0808

Time

SCFM

14

13

12

11

10

9

8

7

6

Building 1SCFM every 5 min

Up the Ramp.

Valve location:

Boiler Room

MA-04,-05,-06.

Valve location:

Outside MA-02

MA-07,-08.

Valve location:

Outside MA-02

MA-01,-02,-03.

Valve location:

Outside MA-01

PP1,2,

Chromatography.

Valve location:

Outside PP1

Index

Arg

onR

eadin

g

740666592518444370296222148741

11

10

9

8

7

6

5

4

3

BaselinePage29Bldg1_1BaselinePage36Bldg1NEWMfgLowNEWMfgMedian

ProcessStatus

Time Series Plot of ArgonReadingBaseline BEFORE Leak Corrections

Plant in “Shut-Down”

Baseline AFTER Leak Corrections

Plant in “Shut-Down”

5/4/07 CONTROL Data – Baseline 1

Plant in Running Mode

5/5-7/07 CONTROL Data – Baseline 1

Plant in Running ModeNOTE Overlap!

Plant Usage during operationCan Meet BEST-IN-CLASS

Benchmark Usage when Shut-Down!

Project Results:$90K in Saving; additional $50K with investmentNew Technology to monitor systems in placeGame Changer Opportunity in Alternate Material


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Project SpotlightExubera® Make-Release Cycle Time

Key actions by the team:Stable work practicesStep visibility Cross training in Mfg. & QAIn-process BPR clearance in JulyReduced redundanciesIdentifying & addressing issues earlyReduced material transfer work (i.e. Hold)Team empowerment action itemsQC data packet reduced to 1 level reviewBatch Disposition Group improvements

A Cross-Function, multi-project team approach to this critical business metric:Exubera® BPR Sub-process:BPR Team Leads: XXX & YYY

Disposition ReleaseQC

BPR

EM

ER

Mfg

BPR Cycle Time

MFG Start

BPR

OK

- M

F G E

nd

9/1/20068/1/20067/1/20066/1/20065/1/20064/1/20063/1/20062/1/2006

80

70

60

50

40

30

20

10

0

Scatterplot of BPR OK - MFG End vs MFG Start

*Undefined Endpoint

14Apr06 – Identification of Process Improvements02May06 –1st Process Improvement Meeting

21Jun06 – Team Empowerment Session

14Jul06 –In-Process BPR Clearance

*


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15.915.815.715.615.515.415.3

LSL USLProcess Data

Sample N 125StDev(Overall) 0.0318339

LSL 15.22Target *USL 15.98Sample Mean 15.8109

Overall Capability

Cpm *

Pp 3.98PPL 6.19PPU 1.77Ppk 1.77

Observed PerformancePPM < LSL 0.00PPM > USL 0.00PPM Total 0.00

Exp. Overall PerformancePPM < LSL 0.00PPM > USL 0.05PPM Total 0.05

Process Capability of CTF 3 (15.60 +/ - 0.38mm) (R)

15.915.815.715.615.515.415.3

LSL USLProcess Data



Overall Capability

Cpm *

Pp 4.24PPL 6.97PPU 1.51Ppk 1.51



Process Capability of CTF 3 (15.60 +/ - 0.38mm) (R)

FLEX Lot 102210

Q+ Lot 102210

15.915.815.715.615.515.415.3

LSL USLProcess Data



Overall Capability

Cpm *

Pp 3.92PPL 5.73PPU 2.10Ppk 2.10



Process Capability of CTF 3 (15.60 +/ - 0.38mm) (L)

15.915.815.715.615.515.415.3

LSL USL

Process Data



Overall Capability

Cpm *

Pp 5.07PPL 7.81PPU 2.33Ppk 2.33



Process Capability of CTF 3 (15.60 +/ - 0.38mm) (L)

FLEX Lot 102210

Q+ Lot 102210

0.2240.1920.1600.1280.0960.0640.032

USLProcess Data


LSL *Target *USL 0.25Sample Mean 0.013496

Overall Capability

Cpm *

Pp *PPL *PPU 24.08Ppk 24.08

Observed PerformancePPM < LSL *PPM > USL 0.00PPM Total 0.00

Exp. Overall PerformancePPM < LSL *PPM > USL 0.00PPM Total 0.00

Process Capability of CTF 2 (Rad. 0.025mm Max) (Max)

0.2380.2040.1700.1360.1020.0680.0340.000

USLProcess Data

Sample N 125

StDev(Overall) 0.00568468

LSL *

Target *USL 0.25

Sample Mean 0.011544

Overall Capability

Cpm *

Pp *

PPL *PPU 13.98

Ppk 13.98

Observed Performance

PPM < LSL *

PPM > USL 0.00PPM Total 0.00

Exp. Overall Performance

PPM < LSL *


Process Capability of CTF 2 (Rad. 0.025mm Max) (Max)

FLEX Lot 102210

Q+ Lot 102210

2.462.402.342.282.222.162.10

LSL USLProcess Data

Sample N 125

StDev(Overall) 0.0323002

LSL 2.1

Target *USL 2.5

Sample Mean 2.20651

Overall Capability

Cpm *

Pp 2.06

PPL 1.10PPU 3.03

Ppk 1.10

Observed Performance

PPM < LSL 0.00


Exp. Overall Performance

PPM < LSL 487.64


Process Capability of CTF 1 (2.30 +/ - 0.20mm)

FLEX Lot 102210

2.462.402.342.282.222.162.10

LSL USLProcess Data



Overall Capability

Cpm *

Pp 2.14PPL 0.70PPU 3.58Ppk 0.70



Process Capability of CTF 1 (2.30 +/ - 0.20mm)

Q+ Lot 102210

NO IMPACT ON ACCEPT/REJECT DECISION BY NEKTAR!There is no statistical (to 99.9% confidence) difference between vendors.

Removal of 2Removal of 2ndnd QC Test Verification will QC Test Verification will have no material impact!have no material impact!

Establish Performance Criteria Baseline & Run Statistics

After Results:Supplier CoA Verified…no in-coming QC Reassessment

Cost Savings $60K; Cost Avoidance >$125K!


All Rights Reserved

QC10 Oall

Perc

ent

150100500-50

99.9

99

95

90

80706050403020

10

5

1

0.1

43.13 22.95 71 4.400 <0.00526.15 6.125 46 0.553 0.146

Mean StDev N AD P

A-DE

Seg 1

Probability Plot of QC10 OallNormal - 95% CI

Step

Days

QA CoAQC CoAExternal CoASup ReviewInternal TestsQC Log/ShipMfg Deliver

250

200

150

100

50

0

Boxplot of Days vs StepRef Std

736 01098908 01097

InstrumentsEquipment

Mfg eWO Completed

Mfg PrepareSamples

andTRF

MfgDeliver

Samples & TRF to QC

QC TRF Check Sample Log In

Internal or External

Test

Sample Testing

11 Attributes 9 SOP’sAnalysts

sign up for each tests

Prepare samples for

shipping to PFE

Contract Lab Management820 03537

Test Results forAttributes908 05116

QC SupervisorData Review

908 03132908 07696

Results Meet

Specification

External

Complete Data Packet

with CoA

QC Approved CoA

100%QA

Review

Packet & CoA Correct

QA Approved CoA

Yes

No

MLT ParticulatesAttributes

Process Poorly defined

Internal

Not Correct

Correct

No Operator Errors

Lab Investigations

908 05456

OperatorError

Page2 Supervisor

Review Checklist

Assignable CauseInvalidate

Result

Retest

Yes

Hypothesis as to cause

No

Exception Reports

901 03438

QADetermines Disposition

No

QC Protocol

Yes

QA Protocol Approval

Sample Retest

Report:Invalidated Old

Result

Data Review

No

Yes

Training999 00524

Chemicals, Reagents, Solutions 735 00449908 01064

Ref Std736 01098908 01097


Mfg eWO Completed

Mfg PrepareSamples

andTRF

MfgDeliver

Samples & TRF to QC



Test

Sample Testing



Prepare samples for

shipping to PFE




908 03132908 07696

Results Meet

Specification

External


with CoA

QC Approved CoA

100%QA

Review


QA Approved CoA

Yes

No



Internal

Not Correct

Correct

No Operator Errors

Lab Investigations

908 05456

OperatorError

Page2 Supervisor

Review Checklist

Assignable Cause

Ref Std736 01098908 01097


Mfg eWO Completed

Mfg PrepareSamples

andTRF

MfgDeliver

Samples & TRF to QC



Test

Sample Testing



Prepare samples for

shipping to PFE




908 03132908 07696

Results Meet

Specification

External


with CoA

QC Approved CoA

100%QA

Review


QA Approved CoA

Yes

No



Internal

Not Correct

Correct

No Operator Errors

Lab Investigations

908 05456

OperatorError

Page2 Supervisor

Review Checklist

Assignable CauseInvalidate

Result

Retest

Yes

Hypothesis as to cause

No

Exception Reports

901 03438

QADetermines Disposition

No

QC Protocol

Yes

QA Protocol Approval

Sample Retest

Report:Invalidated Old

Result

Data Review

No

Yes

Training999 00524

Chemicals, Reagents, Solutions 735 00449908 01064

Complicated QC Internal/External Process >>> Simplified Lean Value Stream >>> 7 Key SubProcess with 4 driving Cycle Time!

40% Reduction in Mean and 90% Reduction in Variance!Business grew 2X but required NO additional resourcesMajor Ah-Ha … Opportunity to REDUCE Testing by sample changes

DramaticDramaticImprovementsImprovements