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Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits Frank Garcia ADVENT DESIGN CORPORATION.

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Presentation on theme: "Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits Frank Garcia ADVENT DESIGN CORPORATION."— Presentation transcript:

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2 Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits Frank Garcia ADVENT DESIGN CORPORATION

3 SIX SIGMA or LEAN MANUFACTURING Need to lower costs & reduce lead time? Material flow is poor Material flow is poor Error rate is high Error rate is high Can’t deliver ontime Can’t deliver ontime Equipment too slow Equipment too slow

4 Six Sigma or Lean Manufacturing? LEAN MANUFACTURING: Reduce Lead Time by eliminating waste in the Value Stream Reduce Lead Time by eliminating waste in the Value Stream Provides the Game Plan and Plays SIX SIGMA: Reduce process variation Reduce process variation Provides the Play by Play Analysis and Instant Replay

5 Six Sigma or Lean Manufacturing? LEAN MANUFACTURING: Flow Focused Lean cannot bring a process under statistical control Lean cannot bring a process under statistical control SIX SIGMA: Problem Focused Can not dramatically improve process speed or reduce invested capital Can not dramatically improve process speed or reduce invested capital NEED BOTH!

6 Integrating Six Sigma with Lean Manufacturing H Increases customer satisfaction H Improves profitability & competitive position H Has historical integration problems H Requires a different system model H Requires implementation & sustaining plans

7 Lean Manufacturing System H Goals are FHighest quality FLowest cost FShortest lead time H Achieved by eliminating waste in the value stream H Industry benchmark: Toyota Production System (TPS) H TPS is applied I.E. and common sense H Principle: organization supports the value adder

8 Definition of Value -Added H Value is added any time the product is physically changed towards what the customer is intending to purchase. H Value is also added when a service is provided for which the customer is willing to pay (i.e. design, engineering, etc.). H If we are not adding value, we are adding cost or waste. 90% of lead time is non-value added!

9 Value Stream The 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 Management 2. Transformation

10 The EIGHT Wastes H Inventory (more than one piece flow) H Overproduction (more or sooner than needed) H Correction (inspection and rework) H Material Movement H Waiting H Motion H Non-Value Added Processing H Underutilized People

11 Six Sigma System H A defined management process and CTQ goal (3.4 ppm) 3 sigma is 66,807 ppm! H Driven from the top H Focused on Voice of the Customer H A data analysis and problem solving methodology H Strong focus on variation reduction H Supported by highly trained problem solvers

12 Scrap Rework Warranty Rejects Uncovering Quality’s Hidden Costs Lost Sales Late Delivery Engineering Change Orders Long Cycle Times Expediting Costs Excess Inventory More Set-ups Working Capital Allocations Excessive Material Orders/Planning Traditional (Tip of the Iceberg) Traditional (Tip of the Iceberg) Lost Opportunities Additional Costs of Poor Quality 5 to 8 %15 to 20 %

13 Six Sigma Variation Reduction Variation Reduction is Cost Reduction Process Variation Should be Less Than Specs

14 Six Sigma’s (  ) Focus: Reducing Variance “ You have heard us talk about span, the “evil” variance our customers feel in our response to their requests for delivery, service or financing.” A process mean tells us how the process is performing while the variance gives us an indication of process control. Reducing the variance provides better control of the process.

15 What is Six Sigma (  ) Quality? Population mean (  ) or average One (1)  represents 68% of the population Two (2)  represents 95% of the population Six (6)  represents 99.999997% of the population With 6  Quality, approximately 3.4 items in a population of 1,000,000 items would be unacceptable.

16 Six Sigma System H 20% margin improvement H 12 to 18% increase in capacity H 12% reduction in number of employees H 10 to 30% reduction in capital Improving Profitability A 1 Sigma Improvement Yields….. Source: Six Sigma - Harry & Schroeder

17 Six Sigma Financial Impact Areas: The Savings Categories 1. Cost Reduction (including cost at standard and costs not included in standard cost) 2. Cost Avoidance (can be difficult to document) 3. Inventory Reduction 4. Revenue Enhancement 5. Receivables Reduction

18 Six Sigma System H Customer centricity: What do they value? H Financial results H Management engagement & involvement H Resource commitment: 1 to 3% of staff full time H Execution infrastructure: black & green belts, teams A culture characterized by…..

19 Six Sigma Problem Solving Steps Process Define & Measure Validate Data Collected Analyze Vital Few Factors For Root Cause of Problem Improve Identify appropriate operating conditions Breakthrough Strategy Characterization Control Sustain - Insure Results to Bottom Line Optimization

20 The DMAIC Cycle Define Improve Plan-Do-Study-Act Measure & Analyze Control Management Commitment Plan-Do-Study-Act Teams Benchmark Analysis tools ID variability Employee Involvement Design of Experiments SDCA SDCA SDCA = Standardize-Do-Check-Adjust Six Sigma In Action

21 Six Sigma Tools Check Sheets: Check Sheets: Checklists of what is to be accomplished,etc.. Scatter Diagrams: Scatter Diagrams: A graphical representation between two measurements (variables). Fishbone or Cause and Effect Diagrams: 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: Pareto Charts: A method for organizing errors based on the number of errors created by a particular attribute (ex. Machine, Supplier, Product, Individual, etc.).

22 Six Sigma Tools Process Maps or Flowcharts: Process 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. FMEA’s (Potential Failure Mode and Effects Analysis): 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. X-Y Matrix: X-Y Matrix: A ranking method used to prioritize process inputs (X’s) to process outputs (Y’s).

23 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 Added  Remember Cycle Times and Defects

24 Traditional Six Sigma Implementation- Who is Involved Senior Management Master Black Belts Technical Trainers, Mentors: Full-Time Commitment Black Belts Project Leaders- Full-Time Commitment Green Belts Project Leaders- Part-Time Commitment Champions and Leaders Provides direction, removes obstacles, reviews progress

25 Six Sigma Information Flow

26 The Bad News: Six Sigma Program: Implementation Issues H Some of the facts: H 80% of Six Sigma Implementations fail. H Traditional Six Sigma implementations have largely been attempted at large Fortune 500 Companies due to the large investment in people, training and overall support. H 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.

27 Need for Six Sigma & Lean H Quality, Warranty, and Cost H Customers Require Six Sigma H Customers Require Lean Manufacturing H Competitors are implementing Lean & Six Sigma H Staying in business External - Satisfying Customers…..

28 Need for Six Sigma & Lean H Operational Cost Reduction FImprove Productivity FReduce Scrap and Rework FReduce Inventory & WIP H Engineering Design Cost Reduction Define-Measure-Analyze-Design-Verify (DMADV) FStabilize & Quantify Process Capability FInput for Product and Design Process Internal - Improving Profitability through…..

29 Lean Six Sigma Model

30 You Can Apply Six Sigma Techniques to Complement Existing Lean Capabilities Lean Training & Implementation VSM Inventory Reduction & Control Waste ReductionProcessvariation Six Sigma Analysis, Problem Solving & Training Supply Chain Management Lean Techniques

31 Lean Six Sigma Implementation H Only Six Sigma or Lean Implemented - big $ savings but money left on the table H Separate Six Sigma & Lean initiatives competing for best resources H Difficulty in sustaining the gain Historical Implementation Problems

32 Lean Six Sigma Implementation H Need to implement in the correct order H Policy deployment to align business objectives (Flow, Waste & Variation Reduction) H Focus on shop floor results, not class room skills H Experienced teachers & coaches H Standardized work to institutionalize the gains Some Solutions…….

33 The Lean Six Sigma Strategy : H 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. H Goals: Improved Customer Satisfaction Improved Customer Satisfaction Increased Profits Increased Profits Improved Process Capability by Reducing Variance Improved Process Capability by Reducing Variance Increased Market Share Increased Market Share Support Continuous Improvement Support Continuous Improvement Sustained Gains for Completed Projects Sustained Gains for Completed Projects

34 Lean and the 6  Structure LEAN Manufacturing Practices Problem Solving Yellow and Green Belt Black Belt M.B.B Problem Solving Team Members Waste reduction and Continuous Improvement Functional 6Sigma Team Member. Familiar with tools Problem solver, assists Black Belt. Working Knowledge of tools Problem solver,Proficient with tools Problem solver, Teacher, Mentor. Expert in use of the tools FULL TIME COMMITMENT 25-50% Training Costs- up to $2,500 Week (excludes lodging, travel and salary)

35 Why Not Rent a Belt (Black, Yellow or Green) Pay for only What You Need to Solve Real Business Problems? H Easier for Small Business to Justify H Focused on Solving Companies’ Problems H Joint Problem Solving and Knowledge/Skill Transfer H Easier to Meet Customer Mandates to Use Lean Six Sigma Techniques H Provides Evolutionary Approach to Lean/Six Sigma Implementation and Training

36 How Do We Use Lean Six Sigma Techniques How Do We Use Lean Six Sigma Techniques H Get Management commitment H Assess the operation & understand the Process using a Value Stream Map (Product families & Production data) H Identify lean improvements & kaizens without automation H Implement lean improvements using VSM plan H Identify processes requiring Six Sigma analysis H Analyze, eliminate, and control variation H Start the cycle again!

37 The Lean Six Sigma Cycle Commitment & Assessment Implementation Plan Recommended Solutions DO IT! Continuous Improvement Set Up Layout Cells Visual Variation Reduction Information Systems VSM

38 Understanding the Process: The 1 st Step and Foundation of Lean Six Sigma Y = f(X) Output(s) are a function Input(s) The Lean Six Sigma process attempts to control the outputs by controlling the inputs (those Critical to Quality or CTQ’s)

39 H 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 flows H Shows how the shop floor currently operates H Foundation for the future state An Assessment Tool Value Stream Map An Assessment Tool

40 Using the Value Stream Mapping Tool product family current state drawing future state drawing plan and implementation Understanding how the shop floor currently operates. The foundation for the future state. Designing a lean flow

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42 Soak & DryPackagingLabelingCase PackingCartoningShipping IIIIII C/T = 25 - 65 min. C/O = 10 min. Rel. = 100% C/T = 1 sec. C/O = 5 min. Rel. = 85% C/T = 3 sec. C/O = 2 min. Rel. = 80% C/T = 1 sec. C/O = N/A Rel. = 100% C/T = 2 sec. C/O = N/A Rel. = 100% up to 250 stones in WIP 00 1 Operator1/2 Operator1 Operator 1/2 Operator125 Cans of Oil 20,640 Round Stones 49,000 Shaped Stones 4290 Stones 90,504 Stones Various Customers Andrea Aromatics (Scented Oils) New Jersey Porcelain (Round Stones) Alanx (Shaped Stones) 30 Cans of Oil Every 2 Weeks 59,000 Stones Every 2 Weeks 50,000+ Stones Every 2 Months (via stringer) Average of 6,000 Stones per Day in Various Size Orders (8 to 20 case & 200 to 400 case range mainly) Production Control Randomly Placed Orders (Various Sizes) Orders Every 2 Weeks Order as Needed Bi- Weekly Productio n Schedule Daily Shipping Orders 11.6 Days 65 min. 0.7 Days 7 seconds 15.1 days27.4 Days Lead Time 65 minutes, 7 seconds Value-Added Time Value Stream Map (Current State) Daily Shipments Existing Work Cell Ameripack Flow Packager APAI Automatic Stapler Manual Multiple Batch Tanks

43 Soak & DryPackagingLabelingCase PackingCartoningShipping IIIII C/T = 25 - 65 min. C/O = 10 min. Rel. = 100% C/T = 1 sec. C/O = 5 min. Rel. = 85% C/T = 3 sec. C/O = 2 min. Rel. = 80% C/T = 1 sec. C/O = N/A Rel. = 100% C/T = 2 sec. C/O = N/A Rel. = 100% up to 250 stones in WIP 00 1 Operator1/2 Operator1 Operator 1/2 Operator75 Cans of Oil 40,000 Round Stones 25,000 Shaped Stones 4290 Stones 30,000 Stones in a supermarket type arrangement with stocking levels by shape and scent Various Customers Andrea Aromatics (Scented Oils) New Jersey Porcelain (Round Stones) Alanx (Shaped Stones) 12 to 16 Cans of Oil Once a Week 30,000 Stones Once a Week 25,000 Stones Once a Month (via stringer) Average of 6,000 Stones per Day in Various Size Orders (8 to 20 case & 200 to 400 case range mainly) Production Control Randomly Placed Orders (Various Sizes) Orders Every Week Monthly Order Bi-Weekly Production Schedule (large orders) Daily Shipping Orders 10.8 Days 65 min. 0.7 Days 7 seconds 5.0 days16.5 Days Lead Time 65 minutes, 7 seconds Value-Added Time Value Stream Map (Future State) Daily Shipments Existing Work Cell Ameripack Flow Packager APAI Automatic Stapler Manual Multiple Batch Tanks 4 Cases Increase Reliability

44 Questions to Ask About the Value Stream H Is the step valuable? H Is the step capable? H Is the step available? H Is the step adequate (capacity)? H Is the step flexible?

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46 Lean Manufacturing Concepts & Techniques H Flow: Setup Reduction, Cellular Manufacturing, Batch Size Reduction, Visual Workplace, Layout H Pull: Kanban Systems, Supply Chain Management, Point of Use H Perfection: Quality Systems including variation reduction, Training

47 Road Map to Lean Six Sigma Six Sigma for Process Variation in Value Stream Lean to improve flow and reduce inventory & lead time Six Sigma for Process Variation in Value Stream

48 Low Productivity Electrical Device Assembly The Challenge in Two Steps H Client wanted wave soldering and robotic pick and place H Functional operational layout H Reject rate 5 to 8% H Extensive material staging H No space H Initially, 13 people in Aurora cell H Low output: 300 units/day

49 Lean Six Sigma Techniques Used H Process mapping H Cellular Manufacturing & Layout H Balance Cycle Times Between Work Stations H Reduce Batch Size & parts staging H Quality Data Collection & Analysis (Reduce Reject Rate)

50 Cellular Assembly Layout

51 Cell Changes LED SOLDER & CUT LED PLACEMENT TEST PCBs ASSEMBLY #1 COLD STAKE TEST PCBs CONTACTS ASSEMBLY & SOLDER BUTTON & BATTERY ASSEMBLY LABEL ATTACH BACK COVER, STAKE STRAP & ATTACH STRAP TEST SAMPLES GLUE SWITCH/ ATTACH STRAP PACK REJECT DATA WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS LED SOLDER & CUT INSERT SWITCH ACTIVATOR REJECT DATA ASSIST 1 2 3 456 7 89 ASSEMBLY #1 COLD STAKE TEST PCBs CONTACTS ASSEMBLY & SOLDER BUTTON & BATTERY ASSEMBLY LABEL ATTACH BACK COVER, STAKE STRAP & ATTACH STRAP TEST SAMPLES GLUE SWITCH/ ATTACH STRAP PACK REJECT DATA AFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS PCBs from supplier INSERT SWITCH ACTIVATOR REJECT DATA 123 4 56

52 Lean Six Sigma Changes H Cold staking fixtures H Powered screw drivers H Light test & Soldering fixtures H Quality data tracking via % defect control chart (p chart)

53 With Lean Six Sigma The Results H Balanced cell at 24 sec per work station H Two U-shaped cells H 3 piece flow H 1000 units/day per cell vs 300 H 6 people per cell vs 13 H Faster identification of quality problems H Operating at 5 to 6 sigma H Better teamwork H No backlog

54 Reducing Lead Time & Improving Quality Steel Panel Fabrication The Challenge H Client wanted to reduce lead time to less than one week H Automated equipment had been installed but had problems H Panel rejects & rework (5%) H Material flow problems H Few process controls or data collection

55 ShearNotch Corner PunchStake & LabelBendShipping I C/T = 4 min. C/O = N/A Rel. = 99% C/T = 2 min. C/O = 4 min Rel. = 95% C/T = 2 min. C/O = up to 30 min. Rel. = 99% C/T = 2 min. C/O = N/A Rel. = 99% C/T = 5 min. C/O = 30 to 60 sec. Rel. = 90% 1 Operator1/2 Operator 1 Operator 2 Operators1/2 Operator Various Distributors (~ 24 for Smith Corp. & ~ 6 for Jones Systems Sheet Galvanized Steel (4’ by 8’ or cut) Up to an average of 130,000 lbs daily in peak season Production Control (normally working 24 to 48 hours ahead of promised shipment) Randomly Placed Orders (normally single unit orders) Blanket Annual Purchase Order with Daily Releases 2 to 5 days 4 min. 2 to 5 Working Days, Lead Time 32 minutes, Value-Added Time Value Stream Map (Current State) Daily Shipments 1/2 Operator Add Z Brace C/T = 7 min. C/O = N/A Rel. = 98% to 99% 1/2 Operator 2 min. 5 min.2 min. 7 min. Daily Production Reports Daily Shipping Schedule Rack 1 Material Handler Daily Production Reports Average volume of 1000 systems per month in peak season. Customers are mainly distributors. There are a few dealers. C/T = N/A C/O = N/A Rel. = 100% Radius & Band C/T = 8 min. (average) C/O = 2 to 30 min. Rel. = 80% to 100% 2 Operators 8 min. Sheet Galvanized Steel (4’ by 8’ or cut) Sheet Galvanized Steel (4’ by 8’ or cut) Sheet Galvanized Steel (4’ by 8’ or cut) 2 to 5 days depending on pre-cut size 1 Accurshear Automated Shear (P-3) 1 Manual Notcher (S-23) & 1 Automated Notcher (R-3) 3 Semi-Auto Punches (S-1, S-2, & S-3) 1 Manual Brake (R-7) & 1 Automated Brake (R-13) 1 Automated Machine (R-8) 1 Automated Machine (ACR) 1 Manual Table, 1 Jig-less Machine (R12), & 1 Jig Machine (R1) Specialty Punch C/T = 2 min. C/O = N/A Rel. = 99% 0 Operators 2 min. 4 Semi-Auto Punches In Straight Panel Dept.

56 Lean & Six Sigma Techniques Used H Value Stream Mapping H Process flow diagrams H Setup time Analysis H Quality Data Collection & Analysis (Reduce Reject Rate & Variability)

57 Rack 1 Material Handler C/T = N/A C/O = N/A Rel. = 100% Radius & Band C/T = 8 min. (average) C/O = 2 to 30 min. Reject rate = 5% Rel. = 80% to 100% 2 Operators 8 min. 1 Manual Table, 1 Jig-less Machine (R12), & 1 Jig Machine (R1) Improve reliability and changeover capability of R1 and R12 machines. Reduce panel reject rate. Work to 1 to 2 days lead time INITIAL IMPROVEMENT CONCEPTS 2 to 5 Working Days, Lead Time

58 6 Foot Long Custom Radius Panel Fabrication Partially finished panels are stocked in sixteen different configurations. Panels are finished to order. Work is done in three different areas as noted. Raw Material Stock 14 Ga. Galvanized Steel (pre-cut 53-15/16” by 6’3-15/16” sheets) Notch & Punch (Trumpf Machine) Ship Bend & Stake Add Z Brace(s) (if required) Label Radius & Band (R12 - Jigless Machine) WIP Stock 16 Different Panels with Various Cutouts Trumpf Area Custom Panel Dept. Straight Panel Dept. Panel Material Rack Raw Material Stock 11 Ga. Galvanized Steel (4’ by 8’ standard sheets) Shear & Cut Band Material

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60 Process Improvements Separating Process & Machine Issues H Common setup procedure H Replace measurement gages H Established process capability H Implemented process controls for panel dimensions H Identified realtime data requirements H Completed identified maintenance actions H Implemented PM program

61 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

62 New Radius Bending Machine R13 Automated band cutting Servo driven adjustments from panel bar codes Servo driven adjustments from panel bar codes Online radius measurement and tracking Online radius measurement and tracking

63 R13 Capabilities After Lean Six Sigma H Operates as a cell H Runs two product families H Changeover in less than 5 sec. within and between product families H Cycle time reduced from 5 min. to 1.8 min. H Realtime auto check of each panel with data collection H Operating at 6 sigma

64 As lead time decreases………….. the need for realtime data increases ! Lean Six Sigma in the Fast Lane!

65 Automation Provides Realtime Data to Control Variation for Six Sigma H Enhances Define-Measure- Analyze-Improve-Control methodology (DMAIC) H Online measurement of process parameters H Direct data input into control charts H Provide realtime controls as control limits are understood Process Control

66 R13 Process Controls & System Status Realtime Data Collection for Six Sigma Analysis Diagnostics for Rapid Identification of Problems

67 Realtime Data From R13

68 How Do We Use Lean Six Sigma Techniques How Do We Use Lean Six Sigma Techniques H Get Management commitment H Assess the operation using a Value Stream Map (Product families & Production data) H Identify lean improvements & kaizens without automation H Implement lean improvements using VSM plan H Identify processes requiring Six Sigma analysis H Analyze, eliminate, and control variation H Start the cycle again!

69 Lean Six Sigma Operating costs Process speed(lead time) Inventory & invested capital Quality Customer satisfaction Operating flexibility Methodology that maximizes shareholder value by achieving the fastest rate of improvement in…..

70 Contact Information Advent Design Corporation Canal Street and Jefferson Ave. Bristol, PA 19007 www.adventdesign.com800-959-0310 Frank Garcia, Director Engineering Services frank.garcia@adventdesign.com


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