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LeanSigma ® Fundamentals Module 6 – Establish Flow and Pull.

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Presentation on theme: "LeanSigma ® Fundamentals Module 6 – Establish Flow and Pull."— Presentation transcript:

1 LeanSigma ® Fundamentals Module 6 – Establish Flow and Pull

2 Step 3 of the Lean execution roadmap establishes flow. Specify Value Identify the Value Stream Establish Flow – continuous movement of the service and information from beginning to end thru the process Pull from the Customer Continuously Improve the Process to Perfection © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 2

3 Beyond simple waste reduction, Lean optimizes system flow. Time Principles –Establish Continuous Flow –Operate to Takt Time –Leverage a Pull System Smooth the Process –Demand vs. capacity –Routing standardization –Workforce management Jidoka –Root Cause Identification and Elimination (Abnormality Management) –Mistake-Proofing –Standard Operations © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 3 Principles of LeanSigma ® Just in Time Just in Time Jidoka Process Smoothing Just in Time Principles Jidoka Process Smoothing

4 Batch processes create poor flow and work in process. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 4 Open Mail Batch Invoices Calculate Batch Total Enter Batch Stack and hold Voucher File Batch

5 One piece flow is the fastest way to complete a process. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 5 Open Mail Enter File Batch

6 Continuous flow is uninterrupted movement of a service through a process. It contributes to the elimination of waste through the following: –Highlights any delays, breakdowns or bottlenecks –Leads to the reduction of end-to-end lead time –Facilitates standardized processes The IDEAL state is single item continuous flow. Flow is paced to Takt Time – the pace needed to meet demand. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 6

7 Takt Time paces work to customer demand. The tempo sets the pace of any operation to match customer demand. The tempo of any operation is “Takt Time.” Can be compared to the conductor of an orchestra. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 7

8 Takt Time is calculated based on available time and demand. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 8 Takt Time = Customer Requirements / Period* Net Operating Time / Period* *Time periods must be consistent (shift, day, week... )

9 Takt Time Example © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 9 For 1 shift / day: Takt Time = Customer Requirements / Period Net Operating Time / Period Takt Time = Items / day ÷ 20# Working days/month Requirements: 9600Monthly requirements (items) Customer Cleanup: 5 minutes Breaks: 10 minutes Time Per Shift: 480Shift: 480 minutes Net Operating Net operating time per shift

10 Lead Time vs. Cycle Time © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 10 Lead TimeAssociate Cycle Time The time from the beginning of the transaction with the customer until the completion of the service The time it takes an associate to complete their portion of the process

11 Step 4 of the LeanSigma execution roadmap establishes pull. Specify Value Identify the Value Stream Establish Flow Pull from the Customer – process flow activated by customer demand signaling the need Continuously Improve the Process to Perfection © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 11

12 The objective of a Pull System is to deliver what the customer wants on demand at minimum costs. Overproducing is doing it faster than the customer needs it. Underproducing means the customer won’t get what they need when they need it. 12 Pull Systems satisfy customer demand with minimum effort. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

13 Pull systems supply output just as the customer needs it. Dependent on a few simple rules – not on brute force, elaborate systems or expensive technology. Should be self-regulating and naturally adapts to schedule changes. There are clear “customer- supplier” linkages throughout the process. It is visual – not hidden in notebooks, files, computers, etc. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 13

14 Kanban signals are visual cues that more output is needed in the pull system. Kanban is a pull system: –The customer process goes to the supplier process and withdraws (pulls) what is needed and when it is needed. –The supplier process is then free to replace what has been taken. Kanban = “Signal” © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 14 Customer Process Supplier Process Withdrawal Kanban Production Kanban Store

15 Process smoothing is the foundation of the Lean house. Time Principles –Establish Continuous Flow –Operate to Takt Time –Leverage a Pull System Smooth the Process –Demand vs. capacity –Routing standardization –Workforce management Jidoka –Root Cause Identification and Elimination (Abnormality Management) –Mistake-Proofing –Standard Operations © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 15 Principles of LeanSigma ® Just in Time Just in Time Jidoka Process Smoothing Just in Time Principles Jidoka Process Smoothing

16 Smoothing adapts processes to variable levels of demand complexity and volume. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 16 Time Customer or Request Variable volume

17 Takt Time vs. Cycle Time Bar Chart is a basic tool for matching capacity to demand. Visually contrast staff cycle time and takt time for a service Determine the proper number of staff for a service Visually display work load balance © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 17

18 The bar chart shows visually when cycle time exceeds takt time. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 18 Time Staff # Takt Time = 25 min  Cycle Times = 75 min # Staff =  Cycle Times Takt Time

19 Variation in volume is sometimes internally driven. Fluctuations in Schedules –Rush Jobs/Projects –End-of-Day Tasking –Lack of Steady Work Pace –Excessive Resources to Achieve Peak Demand –Heavy Reliance on Overtime Causes: –Unrealistic Forecasts –Excessive Service Cycle Time –Lack of Planning –Lack of Standardization © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 19

20 Routing standardization reduces volume variation by grouping work differently. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 20 Similar or complementary work is grouped together.

21 Variation in demand also can be managed by changing capacity. Capacity is controllable, however volume is often not easily influenced. –Volume is what we have to process –Capacity represents your ability and/or capability to process volume Capacity is a function dependent on a certain set of variables all working together © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 21 Capacity = Resources * Time * Productivity

22 Capacity is always in one of three stages. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 22 Capacity > Volume No Waiting High Error Rates High Costs Capacity < Volume Customers Waiting High Error Rates Low Costs Missed Expectations Capacity = Volume Good customer Flow Fewer Errors Costs are justifiable

23 Workforce management matches capacity to demand. LeanSigma Workforce Management A methodology developed for the Service Industry that determines the efficient allocation and scheduling of resources Targeted for highly complex and variable environments to maximize customer service, while containing costs. 23 Match Capacity to Volume © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

24 Forecasting volume is half of the workforce management equation. When does the work arrive to be processed? What is the variation over the year, month, week, day? How does the volume flow through the process? © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 24

25 Forecasting available manpower is the capacity portion of the equation. What activities does the team perform? What is the sum of the available work time on the team? (productive work hours) How much time does it take to create a unit of work? (productivity) © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 25

26 Many additional factors can be considered in the analysis. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 26 LeanSigma ® Workforce Management Existing Schedules Resource Requirements Resource Scheduling Customer Arrival Pattern Volume Non-Controllable Factors Customer Deadlines Productivity Limiting Resources Process Training Curve Critical Success Factors InputProcessOutput

27 Jidoka combines automation and human intervention to improve the process. Time Principles –Establish Continuous Flow –Operate to Takt Time –Leverage a Pull System Smooth the Process –Demand vs. capacity –Routing standardization –Workforce management Jidoka –Root Cause Identification and Elimination (Abnormality Management) –Mistake-Proofing –Standard Operations © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 27 Principles of LeanSigma ® Just in Time Just in Time Jidoka Process Smoothing Just in Time Principles Jidoka Process Smoothing

28 Jidoka is a mindset that doesn’t allow errors to pass to customers. Three components –Rapid Problem Solving – Root Cause Analysis –Mistake-proofing –Standard operations © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 28

29 Steps to mistake-proof the process © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 29

30 Use a Fishbone (Ishikawa) Diagram to identify the root cause © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 30 People General Categories for Services Defect Measurement (Data Collection, Calibration) Measurement (Data Collection, Calibration) Machines Methods (How work is done) Methods (How work is done) Materials Raw, In-Process Materials Raw, In-Process

31 Apply mistake-proofing strategies to prevent defects Mistake-proofing strategies: –Shut down: Process stop: Cannot proceed until issue is addressed –Control: Pull-down box: Only “X” choices available – must select from choices –Signal: Error message: Notification of incorrect data entry by pop-up text box A good example of mistake-proofing--Shut down strategy: The “safest table saw ever built” © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 31

32 Jidoka improves productivity by eliminating the need for people to supervise. Allows processes to automatically detect abnormalities and prevent reoccurrence until the abnormality is corrected. Empowers employees at all levels to: –Help solve problems –To make decisions that affect them –Be accountable for their work –Improve productivity and quality © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 32

33 Standard operations brings all of the Lean concepts together. Articulate the best way to complete a process with the most efficient use of resources. Articulate it clearly so that employees can follow and sustain the process. © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 33

34 Standard Operations Example © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 34

35 Back to EZ Money … Create a Takt Time vs. Cycle Time Bar Chart for EZ Money and Report Out Findings. The following table provides average cycle times for the current state process : © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 35 StepFunctional Area Average Cycle Time (Seconds) 1Sales78 2Admin114 3Data Entry35 4Finance60 5Accounting34 6Training75 7Ordering46

36 Back to EZ Money … Create a Future State for your process starting with the VA steps you identified. Employ the principles of flow, takt time, and pull. Create a Future State layout and spaghetti map showing information and paper flow. Determine a Staffing Plan. Report Out the Plans. Move furniture! (Make your future state a reality, and pilot the impact.) © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 36


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