Presentation on theme: "Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits"— Presentation transcript:
1 Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits Frank GarciaADVENT DESIGN CORPORATION
2 SIX SIGMA or LEAN MANUFACTURING Need to lower costs & reduce lead time? Material flow is poorError rate is highCan’t deliver ontimeEquipment too slow
3 Six Sigma or Lean Manufacturing? Reduce Lead Time by eliminating waste in the Value StreamProvides the Game Plan and PlaysSIX SIGMA:Reduce process variationProvides the Play by Play Analysis and Instant Replay
4 Six Sigma or Lean Manufacturing? LEAN MANUFACTURING: Flow FocusedLean cannot bring a process under statistical controlSIX SIGMA: Problem FocusedCan not dramatically improve process speed or reduce invested capitalNEED BOTH!
5 Integrating Six Sigma with Lean Manufacturing Increases customer satisfactionImproves profitability & competitive positionHas historical integration problemsRequires a different system modelRequires implementation & sustaining plans
6 Lean Manufacturing System Goals areHighest qualityLowest costShortest lead timeAchieved by eliminating waste in the value streamIndustry benchmark: Toyota Production System (TPS)TPS is applied I.E. and common sensePrinciple: organization supports the value adder
7 Definition of Value -Added Value is added any time the product is physically changed towards what the customer is intending to purchase.Value is also added when a service is provided for which the customer is willing to pay (i.e. design, engineering, etc.).If we are not adding value, we are adding cost or waste.90% of lead time is non-value added!
8 Value StreamThe value stream is the set of all the specific actions required to bring a specific product (good or service) through the critical management tasks of any business:1. Information Management2. Transformation
9 The EIGHT Wastes Inventory (more than one piece flow) Overproduction (more or sooner than needed)Correction (inspection and rework)Material MovementWaitingMotionNon-Value Added ProcessingUnderutilized People
10 Six Sigma SystemA defined management process and CTQ goal (3.4 ppm) 3 sigma is 66,807 ppm!Driven from the topFocused on Voice of the CustomerA data analysis and problem solving methodologyStrong focus on variation reductionSupported by highly trained problem solvers
11 Uncovering Quality’s Hidden Costs Additional Costs of Poor Quality Traditional(Tip of the Iceberg)5 to 8 %15 to 20 %WarrantyScrapRejectsReworkLost SalesLate DeliveryEngineering Change OrdersLong Cycle TimesExpediting CostsExcess InventoryMore Set-upsWorking Capital AllocationsExcessive MaterialOrders/PlanningLostOpportunitiesAdditional Costs of Poor Quality
12 Six Sigma Variation Reduction Process Variation Should be Less Than SpecsVariation Reduction is Cost Reduction
13 Six Sigma’s () Focus: Reducing Variance “ You have heard us talk about span, the “evil” variance our customers feel in our responseto their requests for delivery, service or financing.”Reducing the variance provides better control of the process.A process mean tells us how the process is performing while the variance gives us an indication of process control.
14 What is Six Sigma () Quality? Population mean () or averageOne (1) represents 68% of the populationTwo (2) represents 95% of the populationSix (6) represents % of the populationWith 6 Quality, approximately 3.4 items in a population of 1,000,000 items would be unacceptable.
15 Improving Profitability A 1 Sigma Improvement Yields….. Six Sigma SystemImproving ProfitabilityA 1 Sigma Improvement Yields…..20% margin improvement12 to 18% increase in capacity12% reduction in number of employees10 to 30% reduction in capitalSource: Six Sigma - Harry & Schroeder
16 Six Sigma Financial Impact Areas: The Savings Categories Cost Reduction (including cost at standard and costs not included in standard cost)Cost Avoidance (can be difficult to document)Inventory ReductionRevenue EnhancementReceivables Reduction
17 Six Sigma System A culture characterized by….. Customer centricity: What do they value?Financial resultsManagement engagement & involvementResource commitment: 1 to 3% of staff full timeExecution infrastructure: black & green belts, teams
18 Six Sigma Problem Solving Steps ProcessBreakthroughStrategyDefine & MeasureValidate Data CollectedCharacterizationAnalyzeVital Few Factors For Root Causeof ProblemOptimizationImproveIdentify appropriate operatingconditionsControlSustain - Insure Results to Bottom Line
19 The DMAIC Cycle Six Sigma In Action Management Commitment SDCA DefineMeasure &AnalyzePlan-Do-Study-ActTeamsBenchmarkAnalysis toolsID variabilityManagement CommitmentSDCAEmployee InvolvementControlImprovePlan-Do-Study-ActDesign ofExperimentsSDCA = Standardize-Do-Check-Adjust
20 Six Sigma ToolsCheck Sheets: Checklists of what is to be accomplished,etc..Scatter Diagrams: A graphical representation between two measurements (variables).Fishbone or Cause and Effect Diagrams: Provides a starting point for problem analysis. Problems are diagrammed into categories of Machinery, Material, Methods and Labor (Manpower).Pareto Charts: A method for organizing errors based on the number of errors created by a particular attribute (ex. Machine, Supplier, Product, Individual, etc.).
21 Six Sigma ToolsProcess Maps or Flowcharts: Graphical representation of a process or system showing process or product transformation. In other words, what is being done, by who and what choices are being made.Ideally process maps should include cycle times, defect information, etc.X-Y Matrix: A ranking method used to prioritize process inputs (X’s) to process outputs (Y’s).FMEA’s (Potential Failure Mode and Effects Analysis): A detailed document which identifies ways in which a process or product can fail to meet critical requirements.
22 Six Sigma Tools - Process Maps or Flowcharts What are the X’s (Input variables) at each process step?What are the Y’s (Output Variables) at each process step?Remember Y = f (x)Remember Valued Added versus Non-Value AddedRemember Cycle Times and Defects
23 Traditional Six Sigma Implementation- Who is Involved Black BeltsProject Leaders- Full-Time CommitmentSenior ManagementMaster Black BeltsTechnical Trainers, Mentors: Full-Time CommitmentChampions and LeadersProvides direction, removes obstacles, reviews progressGreen BeltsProject Leaders- Part-Time Commitment
25 The Bad News: Six Sigma Program: Implementation Issues Some of the facts:80% of Six Sigma Implementations fail.Traditional Six Sigma implementations have largely been attempted at large Fortune 500 Companies due to the large investment in people, training and overall support.Training costs alone for a “wave” of 25 people can cost $250,000 for this 4 to 6 month training period. Training costs and personnel requirements can overwhelm many smaller organizations.
26 Need for Six Sigma & Lean External - Satisfying Customers…..Quality, Warranty, and CostCustomers Require Six SigmaCustomers Require Lean ManufacturingCompetitors are implementing Lean & Six SigmaStaying in business
27 Need for Six Sigma & Lean Internal - Improving Profitability through…..Operational Cost ReductionImprove ProductivityReduce Scrap and ReworkReduce Inventory & WIPEngineering Design Cost ReductionDefine-Measure-Analyze-Design-Verify (DMADV)Stabilize & Quantify Process CapabilityInput for Product and Design Process
29 You Can Apply Six Sigma Techniques to Complement Existing Lean Capabilities Lean Training &ImplementationVSMLeanTechniquesSix SigmaAnalysis,ProblemSolving &TrainingWaste ReductionProcessvariationInventory Reduction& ControlSupply ChainManagement
30 Lean Six Sigma Implementation Historical Implementation ProblemsOnly Six Sigma or Lean Implemented - big $ savings but money left on the tableSeparate Six Sigma & Lean initiatives competing for best resourcesDifficulty in sustaining the gain
31 Lean Six Sigma Implementation Some Solutions…….Need to implement in the correct orderPolicy deployment to align business objectives (Flow, Waste & Variation Reduction)Focus on shop floor results, not class room skillsExperienced teachers & coachesStandardized work to institutionalize the gains
32 The Lean Six Sigma Strategy : Lean 6 is a CHANGE STRATEGY for accelerating improvements in processes, products, and services to improve a company’s performance leading to improved financial performance and competitiveness of the organization.Goals:Improved Customer SatisfactionIncreased ProfitsImproved Process Capability by Reducing VarianceIncreased Market ShareSupport Continuous ImprovementSustained Gains for Completed Projects
33 Lean and the 6 Structure FULL TIME COMMITMENTProblem solver, Teacher, Mentor. Expert in use of the toolsM.B.BBlack BeltProblem solver,Proficient with toolsProblem solver, assists Black Belt. Working Knowledge of toolsYellow and Green Belt25-50%Functional 6Sigma Team Member. Familiar with toolsProblem SolvingProblem Solving Team MembersWaste reduction and Continuous ImprovementLEAN Manufacturing PracticesTraining Costs- up to $2,500 Week (excludes lodging, travel and salary)
34 Why Not Rent a Belt (Black, Yellow or Green) Pay for only What You Need to Solve Real Business Problems?Easier for Small Business to JustifyFocused on Solving Companies’ ProblemsJoint Problem Solving and Knowledge/Skill TransferEasier to Meet Customer Mandates to Use Lean Six Sigma TechniquesProvides Evolutionary Approach to Lean/Six Sigma Implementation and Training
35 How Do We Use Lean Six Sigma Techniques Get Management commitmentAssess the operation & understand the Process using a Value Stream Map (Product families & Production data)Identify lean improvements & kaizens without automationImplement lean improvements using VSM planIdentify processes requiring Six Sigma analysisAnalyze, eliminate, and control variationStart the cycle again!
36 The Lean Six Sigma Cycle VSMCommitment &AssessmentRecommendedSolutionsSet UpLayoutCellsVisualContinuous ImprovementVariation ReductionDO IT!ImplementationPlanInformationSystems
37 Y = f(X) Output(s) are a function Input(s) Understanding the Process: The 1st Step and Foundation of Lean Six SigmaY = f(X)Output(s)Input(s)are a functionThe Lean Six Sigma process attempts to control the outputs by controlling the inputs (those Critical to Quality or CTQ’s)
38 Value Stream Map An Assessment Tool The value stream map follows the production path from beginning to end and shows a visual representation of every process in the material and information flowsShows how the shop floor currently operatesFoundation for the future state
39 Using the Value Stream Mapping Tool product familycurrent statedrawingUnderstanding how the shop floorcurrently operates. The foundationfor the future state.future statedrawingDesigning a lean flowplan andimplementation
45 Lean Manufacturing Concepts & Techniques Flow: Setup Reduction, Cellular Manufacturing, Batch Size Reduction, Visual Workplace, LayoutPull: Kanban Systems, Supply Chain Management, Point of UsePerfection: Quality Systems including variation reduction, Training
46 Road Map to Lean Six Sigma Lean to improve flow and reduce inventory & lead time Six Sigma for Process Variation in Value Stream
47 Low Productivity Electrical Device Assembly The Challenge in Two Steps Client wanted wave soldering and robotic pick and placeFunctional operational layoutReject rate 5 to 8%Extensive material stagingNo spaceInitially, 13 people in Aurora cellLow output: 300 units/day
48 Lean Six Sigma Techniques Used Process mappingCellular Manufacturing & LayoutBalance Cycle Times Between Work StationsReduce Batch Size & parts stagingQuality Data Collection & Analysis (Reduce Reject Rate)
50 AFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS Cell ChangesLEDSOLDER& CUTPLACEMENTTESTPCBsASSEMBLY#1COLD STAKETEST PCBsCONTACTS&BUTTON &BATTERYLABELATTACHBACKCOVER,STAKESTRAP &STRAPSAMPLESGLUESWITCH/PACKREJECTDATAWORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITSINSERTSWITCHACTIVATORASSIST123456789REJECTDATAAFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS4TESTSAMPLES12356ATTACHBACKCOVER,STAKESTRAP &STRAPPCBs fromsupplierASSEMBLY#1COLD STAKETEST PCBsCONTACTSASSEMBLY&SOLDERBUTTON &BATTERYASSEMBLYLABELGLUESWITCH/ATTACHSTRAPPACKINSERTSWITCHACTIVATORREJECTDATA
51 Lean Six Sigma Changes Cold staking fixtures Powered screw drivers Light test & Soldering fixturesQuality data tracking via % defect control chart (p chart)
52 With Lean Six Sigma The Results Balanced cell at 24 sec per work stationTwo U-shaped cells3 piece flow1000 units/day per cell vs 3006 people per cell vs 13Faster identification of quality problemsOperating at 5 to 6 sigmaBetter teamworkNo backlog
53 Reducing Lead Time & Improving Quality Steel Panel Fabrication The Challenge Client wanted to reduce lead time to less than one weekAutomated equipment had been installed but had problemsPanel rejects & rework (5%)Material flow problemsFew process controls or data collection
54 Value Stream Map (Current State) Blanket Annual PurchaseOrder with Daily ReleasesProduction Control(normally working24 to 48 hours ahead ofpromised shipment)Randomly PlacedOrders (normallysingle unit orders)Various Distributors(~ 24 for Smith Corp. &~ 6 for Jones SystemsSheet GalvanizedSteel (4’ by 8’ or cut)Sheet GalvanizedSteel (4’ by 8’ or cut)Sheet GalvanizedSteel (4’ by 8’ or cut)Sheet GalvanizedSteel (4’ by 8’ or cut)Average volume of 1000systems per month in peakseason.Customers are mainlydistributors. There are afew dealers.Up to an averageof 130,000 lbsdaily in peakseasonDailyProductionReportsDailyProductionReportsDailyShippingScheduleDailyShipmentsIn StraightPanel Dept.ShearNotchSpecialty PunchCorner PunchBendStake & LabelAdd Z BraceRadius & BandRackShipping1 AccurshearAutomatedShear (P-3)1 ManualNotcher (S-23)& 1 AutomatedNotcher (R-3)4 Semi-AutoPunches3 Semi-AutoPunches(S-1, S-2, & S-3)1 ManualBrake (R-7)& 1 AutomatedBrake (R-13)1 AutomatedMachine (R-8)1 AutomatedMachine (ACR)1 Manual Table,1 Jig-lessMachine (R12),& 1 Jig Machine(R1)I2 to 5 daysdependingon pre-cutsize1 Operator1/2 Operator0 Operators1 Operator1/2 Operator1/2 Operator1/2 Operator2 Operators1 MaterialHandler2 OperatorsC/T = 4 min.C/O = N/ARel. = 99%C/T = 2 min.C/O = 4 minRel. = 95%C/T = 2 min.C/O = N/ARel. = 99%C/T = 2 min.C/O = up to30 min.Rel. = 99%C/T = 5 min.C/O = 30 to60 sec.Rel. = 90%C/T = 2 min.C/O = N/ARel. = 99%C/T = 7 min.C/O = N/ARel. = 98% to99%C/T = 8 min.(average)C/O = 2 to 30min.Rel. = 80%to 100%C/T = N/AC/O = N/ARel. = 100%2 to 5 Working Days,Lead Time32 minutes,Value-Added Time2 to 5 days4 min.2 min.2 min.2 min.5 min.2 min.7 min.8 min.
55 Lean & Six Sigma Techniques Used Value Stream MappingProcess flow diagramsSetup time AnalysisQuality Data Collection & Analysis (Reduce Reject Rate & Variability)
56 INITIAL IMPROVEMENT CONCEPTS Improve reliability and changeovercapability of R1 and R12 machines.Reduce panel reject rate.Work to 1 to 2 days lead timeRadius & Band1 Manual Table,1 Jig-lessMachine (R12),& 1 Jig Machine(R1)Rack1 MaterialHandler2 OperatorsC/T = 8 min.(average)C/O = 2 to 30min.Reject rate = 5%Rel. = 80%to 100%C/T = N/AC/O = N/ARel. = 100%2 to 5 Working Days,Lead Time8 min.
57 6 Foot Long Custom Radius Panel Fabrication Trumpf AreaStraight Panel Dept.Notch& Punch(TrumpfMachine)PanelMaterialBend& StakeAdd Z Brace(s)(if required)RawMaterial Stock14 Ga. Galvanized Steel(pre-cut 53-15/16” by 6’3-15/16” sheets)Radius& Band(R12 - JiglessMachine)LabelRackShipWIP Stock16 Different Panelswith Various CutoutsCustom Panel Dept.BandMaterialShear& CutRawMaterial StockPartially finished panels are stocked insixteen different configurations. Panelsare finished to order. Work is done inthree different areas as noted.11 Ga. Galvanized Steel(4’ by 8’ standard sheets)
59 Process Improvements Separating Process & Machine Issues Common setup procedureReplace measurement gagesEstablished process capabilityImplemented process controls for panel dimensionsIdentified realtime data requirementsCompleted identified maintenance actionsImplemented PM program
60 Richard Schonberger, June 2002 Why Lean Automation?“After implementing lean improvements such as cellular manufacturing and setup reduction, selective automation can add value and reduce human variability.”Richard Schonberger, June 2002
61 New Radius Bending Machine R13 Automated band cuttingServo driven adjustments from panel bar codesOnline radius measurement and tracking
62 R13 Capabilities After Lean Six Sigma Operates as a cellRuns two product familiesChangeover in less than 5 sec. within and between product familiesCycle time reduced from 5 min. to 1.8 min.Realtime auto check of each panel with data collectionOperating at 6 sigma
63 Lean Six Sigma in the Fast Lane! As lead time decreases…………..the need for realtime data increases!
64 Automation Provides Realtime Data to Control Variation for Six Sigma Enhances Define-Measure-Analyze-Improve-Control methodology (DMAIC)Online measurement of process parametersDirect data input into control chartsProvide realtime controls as control limits are understoodProcess Control
65 R13 Process Controls & System Status Realtime Data Collection for Six Sigma AnalysisDiagnostics for Rapid Identification of Problems
67 How Do We Use Lean Six Sigma Techniques Get Management commitmentAssess the operation using a Value Stream Map (Product families & Production data)Identify lean improvements & kaizens without automationImplement lean improvements using VSM planIdentify processes requiring Six Sigma analysisAnalyze, eliminate, and control variationStart the cycle again!
68 Lean Six Sigma Methodology that maximizes shareholder value by achieving the fastest rate of improvement in…..Customer satisfactionOperating costsProcess speed(lead time)Inventory & invested capitalQualityOperating flexibility
69 Contact InformationAdvent Design CorporationCanal Street and Jefferson Ave.Bristol, PA 19007Frank Garcia, Director Engineering Services