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Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits

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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 Garcia ADVENT DESIGN CORPORATION

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

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

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

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

6 Lean Manufacturing System
Goals are Highest quality Lowest cost Shortest lead time Achieved by eliminating waste in the value stream Industry benchmark: Toyota Production System (TPS) TPS is applied I.E. and common sense Principle: 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 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

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

10 Six Sigma System A defined management process and CTQ goal (3.4 ppm) 3 sigma is 66,807 ppm! Driven from the top Focused on Voice of the Customer A data analysis and problem solving methodology Strong focus on variation reduction Supported 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 % Warranty Scrap Rejects Rework Lost Sales Late Delivery Engineering Change Orders Long Cycle Times Expediting Costs Excess Inventory More Set-ups Working Capital Allocations Excessive Material Orders/Planning Lost Opportunities Additional Costs of Poor Quality

12 Six Sigma Variation Reduction
Process Variation Should be Less Than Specs Variation 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 response to 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 average One (1)  represents 68% of the population Two (2)  represents 95% of the population Six (6)  represents % of the population With 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 System Improving Profitability A 1 Sigma Improvement Yields….. 20% margin improvement 12 to 18% increase in capacity 12% reduction in number of employees 10 to 30% reduction in capital Source: 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 Reduction Revenue Enhancement Receivables Reduction

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

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

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

20 Six Sigma Tools Check 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 Tools 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. 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 Added Remember Cycle Times and Defects

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

24 Six Sigma Information Flow

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 Cost Customers Require Six Sigma Customers Require Lean Manufacturing Competitors are implementing Lean & Six Sigma Staying in business

27 Need for Six Sigma & Lean
Internal - Improving Profitability through….. Operational Cost Reduction Improve Productivity Reduce Scrap and Rework Reduce Inventory & WIP Engineering Design Cost Reduction Define-Measure-Analyze-Design-Verify (DMADV) Stabilize & Quantify Process Capability Input for Product and Design Process

28 Lean Six Sigma Model

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

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

31 Lean Six Sigma Implementation
Some Solutions……. Need to implement in the correct order Policy deployment to align business objectives (Flow, Waste & Variation Reduction) Focus on shop floor results, not class room skills Experienced teachers & coaches Standardized 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 Satisfaction Increased Profits Improved Process Capability by Reducing Variance Increased Market Share Support Continuous Improvement Sustained Gains for Completed Projects

33 Lean and the 6  Structure
FULL TIME COMMITMENT Problem solver, Teacher, Mentor. Expert in use of the tools M.B.B Black Belt Problem solver,Proficient with tools Problem solver, assists Black Belt. Working Knowledge of tools Yellow and Green Belt 25-50% Functional 6Sigma Team Member. Familiar with tools Problem Solving Problem Solving Team Members Waste reduction and Continuous Improvement LEAN Manufacturing Practices Training 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 Justify Focused on Solving Companies’ Problems Joint Problem Solving and Knowledge/Skill Transfer Easier to Meet Customer Mandates to Use Lean Six Sigma Techniques Provides Evolutionary Approach to Lean/Six Sigma Implementation and Training

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

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

37 Y = f(X) Output(s) are a function Input(s)
Understanding the Process: The 1st Step and Foundation of Lean Six Sigma Y = f(X) Output(s) Input(s) are a function The 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 flows Shows how the shop floor currently operates Foundation for the future state

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

40

41 Value Stream Map (Current State)
Orders Every 2 Weeks Production Control Andrea Aromatics (Scented Oils) New Jersey Porcelain (Round Stones) Alanx (Shaped Stones) Order as Needed Randomly Placed Orders (Various Sizes) Various Customers Average of 6,000 Stones per Day in Various Size Orders (8 to 20 case & 200 to 400 case range mainly) 30 Cans of Oil Every 2 Weeks 59,000 Stones Every 2 Weeks 50,000+ Stones Every 2 Months (via stringer) Bi-Weekly Production Schedule Daily Shipping Orders Daily Shipments Existing Work Cell Soak & Dry Packaging Labeling Cartoning Case Packing Shipping Multiple Batch Tanks Ameripack Flow Packager APAI Automatic Stapler Manual Manual I I I I I I 125 Cans of Oil 20,640 Round Stones 49,000 Shaped Stones 1 Operator 4290 Stones up to 250 stones in WIP 1 Operator 1/2 Operator 1/2 Operator 90,504 Stones 1 Operator C/T = 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 = 2 sec. C/O = N/A Rel. = 100% C/T = 1 sec. C/O = N/A Rel. = 100% 11.6 Days 0.7 Days 15.1 days 27.4 Days Lead Time 65 minutes, 7 seconds Value-Added Time 65 min. 7 seconds

42 Value Stream Map (Future State)
Orders Every Week Production Control Andrea Aromatics (Scented Oils) New Jersey Porcelain (Round Stones) Alanx (Shaped Stones) Monthly Order Randomly Placed Orders (Various Sizes) Various Customers Average of 6,000 Stones per Day in Various Size Orders (8 to 20 case & 200 to 400 case range mainly) Bi-Weekly Production Schedule (large orders) 12 to 16 Cans of Oil Once a Week 30,000 Stones Once a Week 25,000 Stones Once a Month (via stringer) Daily Shipping Orders Daily Shipments 4 Cases Existing Work Cell Soak & Dry Packaging Labeling Cartoning Case Packing Shipping Multiple Batch Tanks Ameripack Flow Packager APAI Automatic Stapler Manual Manual I I I I I 75 Cans of Oil 40,000 Round Stones 25,000 Shaped Stones 1 Operator 4290 Stones up to 250 stones in WIP 1 Operator 1/2 Operator 1/2 Operator 30,000 Stones in a supermarket type arrangement with stocking levels by shape and scent 1 Operator C/T = 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 = 2 sec. C/O = N/A Rel. = 100% C/T = 1 sec. C/O = N/A Rel. = 100% Increase Reliability 10.8 Days 0.7 Days 5.0 days 16.5 Days Lead Time 65 minutes, 7 seconds Value-Added Time 65 min. 7 seconds

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

44

45 Lean Manufacturing Concepts & Techniques
Flow: Setup Reduction, Cellular Manufacturing, Batch Size Reduction, Visual Workplace, Layout Pull: Kanban Systems, Supply Chain Management, Point of Use Perfection: 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 place Functional operational layout Reject rate 5 to 8% Extensive material staging No space Initially, 13 people in Aurora cell Low output: 300 units/day

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

49 Cellular Assembly Layout

50 AFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS
Cell Changes LED SOLDER & CUT PLACEMENT TEST PCBs ASSEMBLY #1 COLD STAKE TEST PCBs CONTACTS & BUTTON & BATTERY LABEL ATTACH BACK COVER, STAKE STRAP & STRAP SAMPLES GLUE SWITCH/ PACK REJECT DATA WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS INSERT SWITCH ACTIVATOR ASSIST 1 2 3 4 5 6 7 8 9 REJECT DATA AFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITS 4 TEST SAMPLES 1 2 3 5 6 ATTACH BACK COVER, STAKE STRAP & STRAP PCBs from supplier ASSEMBLY #1 COLD STAKE TEST PCBs CONTACTS ASSEMBLY & SOLDER BUTTON & BATTERY ASSEMBLY LABEL GLUE SWITCH/ ATTACH STRAP PACK INSERT SWITCH ACTIVATOR REJECT DATA

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

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

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

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

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

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

57 6 Foot Long Custom Radius Panel Fabrication
Trumpf Area Straight Panel Dept. Notch & Punch (Trumpf Machine) Panel Material Bend & Stake Add Z Brace(s) (if required) Raw Material Stock 14 Ga. Galvanized Steel (pre-cut 53-15/16” by 6’3-15/16” sheets) Radius & Band (R12 - Jigless Machine) Label Rack Ship WIP Stock 16 Different Panels with Various Cutouts Custom Panel Dept. Band Material Shear & Cut Raw Material Stock Partially finished panels are stocked in sixteen different configurations. Panels are finished to order. Work is done in three different areas as noted. 11 Ga. Galvanized Steel (4’ by 8’ standard sheets)

58

59 Process Improvements Separating Process & Machine Issues
Common setup procedure Replace measurement gages Established process capability Implemented process controls for panel dimensions Identified realtime data requirements Completed identified maintenance actions Implemented 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 cutting Servo driven adjustments from panel bar codes Online radius measurement and tracking

62 R13 Capabilities After Lean Six Sigma
Operates as a cell Runs two product families Changeover in less than 5 sec. within and between product families Cycle time reduced from 5 min. to 1.8 min. Realtime auto check of each panel with data collection Operating 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 parameters Direct data input into control charts Provide realtime controls as control limits are understood Process Control

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

66 Realtime Data From R13

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

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

69 Contact Information Advent Design Corporation Canal Street and Jefferson Ave. Bristol, PA 19007 Frank Garcia, Director Engineering Services


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