Prepared by Julian Kalac, P.Eng

Lean Six Sigma Master Black Belt

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2

The systematic elimination of waste and re-alignment of resources to deliver value to the customer faster, better, & more consistently

Lean in Manufacturing:

◦ Focus: Eliminate waste, non-value add steps, process constraints and bottle necks that cause problems in work throughput

◦ Approach: Intuitive and broad - “inch-deep, mile wide”

Leading to Leading to Eliminate

Waste

Reduced

Cycle Times

Increased

Capacity

Value Added

Typically 95% of all lead time is non-value added

1. Overproduction

2. Waiting

3. Transportation

4. Non-Value Added Processing

5. Excess Inventory/Material

6. Defects

7. Excess Motion

8. Underutilized People

Non-Value Added

5%

| | 4

Lack of cross-functional training Over relying on a select few while others

are Inadequately trained Operators are unable to rotate and help

each other out to balance the work-load

High overtime, increased pressure stress

Cycle Time is dictated by the slowest (bottleneck)

operation in the cell.

40 min

20 min

25 min

15 min

30 min

1

5 4

3

2

•What operation controls the cycle? •How can you relieve the bottleneck?

6

Cellular Concepts

1) CELL OPERATIONS

– Bottleneck Management:

• Maintain buffer in front of bottleneck – (never starve the bottleneck !)

• Improve bottleneck operation

• Cross train on bottleneck

– Creates a visual work place

– Continuous Improvement

– Cell Support

– Balance activities / operations

KANBAN ◦ A signal to produce

◦ Signal can be an empty square, bin, shelf, cart, or kanban card

◦ Kanban qty is safety stock used while new order is delivered

◦ Kanban qty is calculated based on usage, lead time, delivery time

◦ Can be setup manually or automated

◦ Can extend through electronic notification to suppliers using automatic messaging and triggers

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SETUP TIME ◦ Starts when last piece of previous job is

complete; ends when first good piece of next job is complete

INTERNAL SET-UP: While machine is shut-down

Goal is to reduce Internal setup time, less= better

EXTERNAL SET-UP: While machine is working

◦ Goal is to transfer internal setup activities and increase external setup time, more= better

Poke yoke = Error Proofing Eliminate/minimize chance for human error

to avoid mistakes

◦ Prevention Poke Yoke Stops the process before failures occur

Does not allow defects to pass through the process

VA/NVA Ratio= 46%

DPU = ____

RTYield = _____

SCORE CARD:

I’m going to

have coffee

Fill c.

maker

with

water

Scoop

Coffee

into

c. maker

Get &

place

Filter in

c. maker

Drink

coffee

Is

taste

OK

Brew

coffee

Pour c.

into cup

Add

cream &

sugar

Water Supply

Process Shopping

Process

Electricity

Supply

Process

Eating

Equipment

Supply

Process Tasting

Process

Housekeeping Processes

Tra

nsa

cti

onal &

Support

Pro

cess

es

Pro

cess

Data

& Info

rmati

on

NVA = Non-value Added Time

VA = Value Added Time

VA Time

NVA Time

Temp of Water= ___

Quality of Water= ___

Pressure of Water= ___

Amount of Coffee= ___

Quality of Coffee= ___

Type of Coffee= ___

Defective Coffee= ___

60 sec 30 sec 60 sec 360 sec 10 sec 60 sec

10 sec 10 sec 5 sec 600 sec 30 sec

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The Five Principles of “Lean Thinking”

1. Define value from the perspective of the

Customer

2. Map the value stream

3. Get the stream to “flow” by eliminating waste

4. Allow the customer to “pull” value from the

stream

5. Pursue perfection (continual improvement)

INSANITY --“Doing the same thing over and over again and expecting different results”

Albert Einstein

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14

Lost managemant

time cost

Maintenance

cost

Lost opportunity

Lost assets cost

Rerun cost

Lost

business,

goodwill cost

Lost

credibility

cost

Prevention cost

appraisal cost

Project

rework cost

Litigation

SS Titanic

Management

Waste Costs: Costs driven by problems and process steps that add no value

to products & services delivered to customers

Appraisal Costs: Costs incurred to determine the degree

of conformance to customer needs

Prevention Costs: Costs incurred to keep failure and

appraisal costs to a minimum

Failure Costs: Costs directly incurred

due to defects internal

to the system or after

delivery to the

customer

THE PROCESS PROCESS

OUTPUTS

CONTROLLED

VARIABLES

CUSTOMER

PROCESS

INPUTS

UNCONTROLLED

NOISE

VARIABLES

Process and Its Variables

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σ Use data-driven, measurement-based, statistical methods to Solve problems, improve performance

σ Focus: Surgical “inch-wide, mile-deep” investigation and resolution

σ Approach:

σ Solve problems at the system and root cause level

σ Implement robust control plans for sustained improvements

What is “Six Sigma”? An Analytical Methodology that Focuses on Reducing Process Variation

1

)( 2

n

xxi

Sigma = = Deviation

( Square root of variance )

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

Axis graduated in Sigma

68.27 %

95.45 %

99.73 %

99.9937 %

99.999943 %

99.9999998 %

result: 317300 ppm outside

(deviation)

45500 ppm

2700 ppm

63 ppm

0.57 ppm

0.002 ppm

between + / - 1

between + / - 2

between + / - 3

between + / - 4

between + / - 5

between + / - 6

=

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•Identify customer

metrics

•Select performances

standards

•Select objectives

•Map the process

•Validate measurement

System (MSA)

•RESULT: Process maps

and good quality data

collected by listening to

the process

•Identify sources of variation & failure points

•Redefine and Re-prioritize

•Establish process capability

•Identify improvement opportunities

•RESULT: The critical sources of variation

identified root causes determined

•Monitor processes to prevent

recurrence of variation, defects

and non-value work

•Maintain performance levels

•find more creative ways to

improve

•fix root causes

•Find/Implement Preventive Fixes

•Deploy changes organization

•RESULT: Performance is more

predictable ; culture changing

•Plan and apply Improve Tools to fix

problems and reduce variation

•Implement improvement opportunities

•RESULT: Improve tools applied, changes

implemented and performance

improvement in place

DMAIC Improvement Model A Road Map for guiding Improvement Projects

•Identify customer problems

•Identify performances standards

•Identify improvement objectives

•Link problem to the key performance metrics

•Find the right problems

•RESULT: Problem Statement & Project Charter

Define

Measure

AnalyzeImprove

Control

Results

Define

Measure

AnalyzeImprove

Control

Results

To understand where you want to be,

you need to know how to get there.v

Map the Process

Measure the Process

Identify the variables - ‘x’

Understand the Problem -

’Y’ = function of variables -’x’

Y=f(x)

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2) Clearly Define your Problem and the Impact Example: Too many mistakes in purchase request specifications are causing rework rates of 34%, high costs and late deliveries (less than 50% on time) to our customers

1) Find

• Customer Issues

• Performance

Reviews

• Meetings

• New Projects

• Failures, Re-work

• Projects

• Continuous

improvement

activities

• Champions

• Stakeholders

• Employees

• SCOR Maps

• Research

• Brainstorm

• Wait until the

crisis hits you

• Value Stream

Maps

3) Clearly State the Initial Scope for your project

(Set targets and timelines!) Example: This first phase of this project – by 3Q 2004 - will identify problems and root causes in the purchase request process, increase first pass yield rates to 95%, reduce the cost of poor quality by 50% and increase on-time deliveries to our customers to greater than 90%

4) Link improvement targets to customer needs and

organizational objectives

5) Project Plan – Charter, Resources, Milestones

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Process Flow

for Measure Phase

Data

Storage

and

Archiving

Foundations for Wisdom and good decision making start with Good Data What data do we need? Can we use “old” historical data?

Is old data (still) usable? How was it collected?

Wisdom

Knowledge

Data

Information

Wisdom

Knowledge

Data

Information

Wisdom

Knowledge

Data

Information

Data Selection

Data Integrity Analysis

Data Collection

Measurement System Analysis

Process Mapping

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X1 = _____ Y1 = _____

X2 = _____ Y2 = _____

X1 = _______ Y1 = _______

X2 = _______ Y2 = _______

X3 = _______ Y3 = _______

SIPOC Diagrams can be characterized as a 3-step, high-level (“30,000-foot)

Process Flow Diagram for a process

Critical to

Customer Quality

Requirements

(the “CTQ’s)

Key Inputs

(Materials &

Resources) and

Key Process Input

Variables

(KPIV’s)

Inputs Processes Outputs Supplier Customer

Secondary Metric

(e.g. Field Returns)

Primary Metric

(e.g. Scrap $/Month

Is your error in the process or in the way you measure it?

Could it be that you actually are “good” but the error in the measurement system shows that you are not “good”?

Overall Variation

Occurrence-to-

Occurrence ( or Piece-

to-Piece) Variation

Measurement System Variation

Repeatability:

Variation due to gage

or measurement tool

Reproducibility:

Variation due to people or

operators who are measuring

2Total = 2

Part-Part + 2R&R

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Organize & Understand your data

Statistical Analysis

Determine significant factors

Sort, Collate, Investigate your data

Organize your data and put it into some sort of

perspective, concept, picture or visual

representation that is easier to understand

Use maps, graphs, charts, summaries, spread

sheets, etc., that organize the data

Wisdom

Knowledge

Data

Information

Wisdom

Knowledge

Data

Information

Wisdom

Knowledge

Data

Information

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We know we must change X to create a change in Y…

But how do we know which Xs to change

and how to change them ?

Y =f (x1, x2, …)

process output key process input factors

affecting process output function of

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P value< 0.5--Significant

Statistical Analysis

0.0250.0200.0150.0100.0050.000

7

6

5

4

3

2

1

0

New Machine

Fre

que

ncy

0.0250.0200.0150.0100.0050.000

30

20

10

0

Machine 6 mthsF

req

ue

ncy

Is the factor really important?

Do we understand the impact for

the factor?

Has our improvement made an

impact

What is the true impact?

Hypothesis Testing

Regression Analysis

5545352515 5

60

50

40

30

20

10

0

X

Y

R-Sq = 86.0 %

Y = 2.19469 + 0.918549X

95% PI

Regression

Regression Plot

Apply statistics to validate actions & improvements

P value< 0.5--Significant

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The minimum sample size required to provide exactly 5% overlap (risk). In order to distinguish the Delta.

Note: If you are working with Non-normal Data, multiply your calculated sample size by 1.1

40 50 60 70 40 50 60 70

40 60 70 50

Population

P value< 0.5--Significant

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Normal

Test of Equal Variance 1 Sample t-test 1 Sample Variance

Variance Not Equal Variance Equal

2 Sample T One Way ANOVA 2 Sample T One Way ANOVA

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PROBLEM

FINDING

FACT

FINDING

PROBLEM

DEFINITION

IDEA

FINDING

EVAL. &

SELECT

PLAN

ACCEPT

-ANCE

ACTION

1

2

3 4

6

7

8

5

Select

Tool

Analyze Data & Information Apply tools & Make Changes

Six

Sigma

Projects 5S PM/TPM TQM

Rapid Improve-

ment Event

Integrated

Process

Team (IPT)

Establish Baselines/Metrics

Other CI

Tools Kanban DFSS

Ap

ply

th

e T

oo

l

(1)

(2)

(3) Implement / Deploy Fixes

(0) Identify failure points, bottlenecks and improvement

opportunities from Define-Measure-Analyze Phases

PM = Preventive Maintenance

TPM = Total Productive Maintenance

CI = Continuous Improvement

DFSS = Design for Six Sigma

TQM = Total Quality Management

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Maintaining and Improving Control: Managing Change

Quality Management Systems

What’s Left? What’s Next?

Control Tools:

• POKA YOKE

• Control Charts

• Statistical Process Control (SPC)

Document

Procedures and

Best Practices

Create Visual

Controls and

“Dashboards”

Update

Deployment Plan

Complete

Control

FMEA

Update and Deploy

Communication Plan

Execute

Deployment Plan

Document Other

Opportunities

Prepare and

Implement

Control Plan

Report out, Hand-

off and Closure

Prepare and

Implement Training

Plan

Process Flow Diagram for Control Phase:

Lean Manufacturing = SPEED focusses on reducing waste/Non-Value Add activity and “Speeding” up the Process cycle Times. Six Sigma = QUALITY 3.4 PPM focusses on improving quality, reducing process variation

Six Sigma “Quality”+ Lean “Speed" =

PERFORMANCE

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Lean manufacturing v Six Sigma Tools

Lean Manufacturing

1) Value Stream Mapping

2) Line Balancing

3) Continuous Flow

4) PULL system

5) KANBAN

6) Set Up reduction (SMED)

7) Poke Yoke/Error Proofing

8) 5S

Six Sigma

1) DMAIC, SIPOC process

2) Gage R&R

3) FMEA

4)Hypothesis Testing

5)Regression

6) Statistical Analysis

7) Process Capability Cp, Cpk

8) Roll Throughput Yield

9) Design of Experiments

10)Control Charts

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What are the Methods and Tools?

“Lean” focuses on:

The systematic elimination of waste

and re-alignment of resources to

deliver value to the customer faster,

better, & more consistently

Supply Chain Management:

Mapping your processes

through the entire business

enterprise with standard elements

“Six Sigma” focuses on:

Use of analytical and methodical fact based

problem solving methods

Drastically reduce variation then control and

manage whatever variation is left over

Increase predictability, accuracy and precision

Product and Services

Cash/Funding

Information

Customer’s

CustomerSupplier’s

Supplier

SupplierSupplier CustomerCustomerYour Company

PlanPlan

Make DeliverSourceSource Make /

RepairDeliverMakeSourceDeliver SourceDeliverDeliverSource

ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn

PlanPlan PlanPlan

LSL USL Ẋ

Theory of

Constraints:

Find & eliminate

the bottle necks

Business

Process Re-

engineering:

Start over

VA Time NVA Time

FLO

W

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Kaizen Events

& TPM

SPC

Six Sigma (GB &BB)

D.O.E

Which Tools

to Apply

Intuitive/

Common

Sense

Data

Driven

Non-

Value

Added

Value

Added

Type of

Variation

Special

Cause

Variation

Common

Cause

Variation

Lean

vs

6

95%

vs

5%

CO

NT

INU

UM

5S

PIT

& B

rain

sto

rmin

g

Cre

ati

ve P

rob

lem

So

lvin

g

Process

Content

Where do Visual Displays Fit In?

Visual Displays Identify and Communicate Where You Are

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Kaizen Events

& TPM

SPC

Six Sigma (GB &BB)

D.O.E

Which Tools

to Apply

Intuitive/

Common

Sense

Data

Driven

Non-

Value

Added

Value

Added

Type of

Variation

Special

Cause

Variation

Common

Cause

Variation

Lean

vs

6

95%

vs

5%

CO

NT

INU

UM

5S

PIT

& B

rain

sto

rmin

g

Cre

ati

ve P

rob

lem

So

lvin

g

Process

Content

Where do Kaizen Events Fit In?

© Ci2 2009

39

Kaizen Events

& TPM

SPC

Six Sigma (GB &BB)

D.O.E

Which Tools

to Apply

Intuitive/

Common

Sense

Data

Driven

Non-

Value

Added

Value

Added

Type of

Variation

Special

Cause

Variation

Common

Cause

Variation

Lean

vs

6

95%

vs

5%

CO

NT

INU

UM

5S

PIT

& B

rain

sto

rmin

g

Cre

ati

ve P

rob

lem

So

lvin

g

Process

Content

Where do Green Belt/Black Belt Projects Fit In?

© Ci2 2009

Numbers, words, quantities, values stored sitting in piles or queues waiting for future use

Charts, summaries, spread sheets, etc. that organize the data

Presentations, plans and tools that explain and communicate the information

Processes, organizations and team using the information to improve, manage, build systems and develop cultures

Push the data “up” to become Wise

Always loop back to check the data

Wisdom

Knowledge

Data

Information

Where are you looking from?

The WISDOM TOWER: Changing Perspectives