What is Six Sigma? How is it related to Lean? Deb Lucia Practice Manager, Lean Manufacturing & Engineering

Six Sigma Vs. Lean Manufacturing Six sigma and lean manufacturing are methods to improve business and manufacturing processes and drive profitability of companies.  Both six sigma and lean manufacturing, are proven concepts and have saved companies billions of dollars and are the leading continuous improvement methods utilized today.  Lean Manufacturing Focuses on eliminating the 7 or 8 wastes and is based on the philosophy of getting all levels of an organization involved. It was developed by Toyota in the late 1950’s. TPS - Toyota Production System means lean manufacturing. Six sigma is a philosophy of doing business with a focus on eliminating defects through fundamental process knowledge.  Six sigma methods integrate principles of business, statistics and engineering to achieve tangible results.

7 or 8 Wastes of Lean 1. Defects 2. Overproduction 3. Transportation 4. Waiting 5. Inventory 6. Motion 7. Processing 8. Skills – Not utilizing people’s talents Use the acronym 'DOTWIMP' to remember the 7 Wastes of Lean. Use ‘Tim Woods’ to remember the 8 Wastes

Lean Terminology ABNORMALITY MANAGEMENT — The ability to see and respond to an abnormality (any violation of standard operations) in a timely manner. ACTIVITY BASED COSTING – An accounting system that assigns costs to a product based on the amount of resources used to design, order and make it. ANDON — A visual signal. Typically, a light mounted on a machine or line to indicate a potential problem or work stoppage. AUTONOMATION — English translation of Jidoka. Imparting human intelligence to a machine so that it automatically stops when a problem arises. BALANCED PLANT — A plant where all available capacity is balanced exactly to market demand. BOTTLENECK — An area or workstation in a manufacturing environment that limits throughput of the entire process. CHAKU-CHAKU LINE — Meaning load-load in Japanese, this describes a work cell where machines off-load parts automatically so that operators can take a piece directly from one machine to the next without waiting. CHANGE AGENT —One who leads cultural change in an organization to move from the current state to a lean state. CELLULAR MANUFACTURING — An alignment of machines in correct process sequence, where operators remain within the cell and materials are presented to them from outside. CONSTRAINT — A workstation or a process that limits the output of the entire system. CONTINUOUS IMPROVEMENT — The commitment to creating a better product, work environment and business, every day or Kaizen. CYCLE TIME — The time it takes an operator to complete one full repetition of work. Globally, it is the time it takes before the cycle repeats itself. 3Ds — Dirty, dangerous, difficult. 3P – Production Preparation Process is the development of a designed low waste product with low manufacturing capital cost ELEMENTAL TIME — Time allotted to a specific operational step, within standard work. ERROR PROOFING – Poka Yoke Process used to prevent errors for occurring or to immediately point out a defect as it occurs. EXTERNAL SET-UP — Elements of tooling set-up that can be performed safely while the machine is still running. FIFO – First in First Out

Lean Terminology FIVE S (5S) — The primary conditioning discipline for kaizen, the five Ss are defined as: Seiri, Sort to segregate and discard. Seiton, Set in order to arrange and identify. Seiso, Sanitize or Shine to clean and inspect daily. Seiketsu, Standarize to revisit frequently, and Shitsuke, Sustain. GLOBAL PRODUCTION SYSTEM — An expansion of the Toyota Production System, this is a strategy to enable lean manufacturing using kaizen methodology. HANEDASHI — A device that allows a machine to automatically unload a part without waiting for an operator. HEIJUNKA — Production leveling; creating a build sequence that is determined by SKU average demand. Hoshin Kanri - The selection of goals, projects to achieve goals, designation of people and resources for project complement and the establishment of metrics. Hoshin Planning: Breakthrough Strategic Planning INTERNAL SET-UP — Elements of tooling set-up that must be performed while the machine is not in motion. INVENTORY — Usually the highest cost category, inventory is all raw materials, purchased parts, work-in-progress and finished goods that are not yet sold to a customer. JIDOKA — See "autonomation." Japanese term for transferring human intelligence to a machine. JUST IN TIME (JIT) — Manufacturing what is needed, when it is needed, in the quantity it is needed. KAIKAKU — Radical improvement, usually in a business process, that affects the future value stream. KAIZEN — A combination of two Japanese words Kai (change) and Zen (good). Usually defined as "continuous improvement." KAIZEN BREAKTHROUGH — A time-sensitive, rapid-deployment methodology that employs a focused, team-based approach. Continuous improvement. KANBAN — Visual signal. Typically a re-order card or other method of triggering the pull system, based on actual usage of material. It should be located for use at the point of manufacturing. KITTING – Supplying parts to assemblers in “kits” LEAD TIME — The amount of time required to produce a single product, from the time of customer order to shipping. LEAN MANUFACTURING — Using the minimum amount of total resources — man, materials, money, machines, etc. — to produce a product and deliver it on time. MACHINE AUTOMATIC TIME — The time is takes for a machine to produce one unit, exclusive of loading and unloading. MACHINE CYCLE TIME — The time it takes for a machine to produce one unit, including the time it takes to load and unload.

Lean Terminology MUDA — Any activity that adds to cost without adding to value of the product. MURA — Variations in process quality, cost and delivery MURI — Unreasonableness; demand exceeds capacity. NAGARA SYSTEM — Accomplishing two or more activities with one motion. NON-VALUE ADDED — Any activity that adds cost without adding value to the product or process. ONE-TOUCH EXCHANGE OF DIES — The reduction of die set-up activities down to a single step. ONE-PIECE FLOW — A manufacturing philosophy which supports the movement of product from one workstation to the next, one piece at a time, without allowing inventory to build up in between. OPERATOR CYCLE TIME — The time it takes for a person to complete a predetermined sequence of operations, inclusive of loading and unloading, exclusive of time spent waiting. OVERALL EQUIPMENT EFFECTIVENESS – OEE – The equipment’s operational availability, performance effeciency or first-pass yield. PACEMAKER — A technique for pacing a process to takt time. PDCA - (plan-do-check-act) POLICY DEPLOYMENT — Matching the strategic business goals of an organization to its available resources. Communicating those goals throughout the organization and linking everyone to the same objectives. POKA YOKE — A Japanese word for mistake proofing, a poka yoke device prevents a human error from affecting a machine or process; prevents operator mistakes from becoming defects. POINT KAIZEN — An improvement activity intensely directed at a single workstation, performed quickly by two or three specialists. Typically follows a full-blown kaizen event. PROCESS CAPACITY TABLE — A chart primarily used in a machining environment that compares machine load to available capacity. PRODUCTION SMOOTHING — A method of production scheduling that, over a period of time, takes the fluctuation of customer demand out of manufacturing. Producing every part, every day. PULL SYSTEM – A method of replenishment that is signaled by a “pull” on the system indicating a need to replenish.

Lean Terminology QUALITY FUNCTION DEPLOYMENT — A methodology in which a cross-functional team reaches consensus about final product specifications, in accord with the wishes of the customer. QUEUE TIME – The time a product spends in a line waiting for the next process. QUICK CHANGEOVER (SMED) – The ability to change tooling and fixtures rapidly to run multiple products on the same machine. SENSI — A revered master or teacher. SET-UP REDUCTION — Reducing the amount of downtime during changeover from the last good piece to the first good piece of the next order. SINGLE-MINUTE EXCHANGE OF DIES (SMED) — From the last good part to the first good part on the new set-up accomplished in anything less than 10 minutes. AKA "Single-digit set-up." STANDARD OPERATIONS — The best combination of people and machines utilizing the minimum amount of labor, space, inventory and equipment. STANDARD WORK — Pre-determined sequence of tasks for the operator to complete within takt time. STANDARD WORK COMBINATION SHEET — A document showing the sequence of production steps assigned to a single operator. It is used to illustrate the best combination of worker and machine. STANDARD WORK LAYOUT — A diagram of a work station or cell showing how standard work is accomplished. STANDARD WORK IN PROCESS — Minimum material required to complete one cycle of operator work without delay. STOP-THE-LINE AUTHORITY — When abnormalities occur, workers have power to stop the process and prevent the defect or variation from being passed along. SUB-OPTIMIZATION — Optimizing each piece of equipment; keeping all machines running, no matter the cost or consequence. Typically this inflates the number-one cost of production: material. SUPERMARKET — A shop floor, line-side location where parts are sorted and made ready for presentation to operators.

Lean Terminology TAKT TIME — The total net daily operating time divided by the total daily customer demand. THEORY OF CONTRAINTS (TOC) – A lean management philosophy that stresses removal of constraints to increase throughput while decreasing inventory and operating expenses. TOC’’s set of tools examine the entire continuos improvement system. THROUGHPUT — The rate at which the entire system generates money. TIME-BASED STRATEGY — Organizing business objectives around economy-of-time principles. TOYOTA PRODUCTION SYSTEM — Based on some of the first principles of Henry Ford, this describes the philosophies of one of the world’s most successful companies. The foundation of TPS is production smoothing, the supports are just-in-time and jidoka. VALUE ADDED — Any activity that transforms a product or service to meet the customer need. VALUE ANALYSIS — Evaluating the total lead-time and value-added time to identify the percentage spent in value added activities. VALUE STREAM MAP (or Value Chain Map) — A visual picture of how material and information flows from suppliers, through manufacturing, to the customer. It includes calculations of total cycle time and value-added time. Typically written for the current state of the value chain and the future, to indicate where the business is going. VISUAL CONTROLS — Creating standards in the workplace that make it obvious if anything is out of order. VISUAL MANAGEMENT — System enabling anyone to quickly spot abnormalities in the workplace, regardless of their knowledge of the process. WASTE – Any activity that consumes resources but does not add value to the product or service a customer receives (muda). WORK-IN-PROCESS (WIP) — Inventory waiting between operation steps. WORK SEQUENCE — The correct steps the operator takes, in the order in which they should be taken.

Six Sigma Vs. Lean Manufacturing Huge difference between "lean Tools" and Six Sigma tools. Lean = Improved process flow and the elimination of waste in a continual mode of improvement Any of the following mean Lean Manufacturing: TPS, Continuous Improvement, Kaizen, Lean Manufacturing, JIT TPS engages all the employees of a company from the CEO to factory worker. Six Sigma = Reduced process variation Six Sigma holds the improvement process in the hands of a select group of “belted” individuals

Six Sigma In 1986, Bill Smith, a senior engineer and scientist at Motorola, introduced the concept of Six Sigma to standardize the way defects are counted. Six Sigma provided Motorola the key to addressing quality concerns throughout the organization, from manufacturing to support functions. The application of Six Sigma also contributed to Motorola winning the Malcolm Baldrige National Quality award in 1988. Since then, the impact of the Six Sigma process on improving business performance has been dramatic and well documented by other leading global organizations, such as General Electric, Allied Signal, and Citibank. Today, Motorola continues to implement Six Sigma throughout its own enterprise, and extends the benefit of its Six Sigma expertise to other organizations worldwide through Motorola University. Six Sigma was derived from the statistical term of sigma which measures deviations from perfection

Six Sigma History 1986: Motorola Defines Six Sigma and in 1987 Chief Executive declares Motorola will be at 6σ by 1992 (5-year goal) 1988: Original Six Sigma consortium is formed: Motorola, Raytheon, ABB, CDI, Kodak 1989/1990: IBM, DEC try Six Sigma -- and fail 1993: AlliedSignal adds a new level to Six Sigma : Dedicated Black Belts with a supporting infrastructure 1995: Jack Welch of General Electric adopts Six Sigma 1996-1998: Six Sigma implementation expands significantly as companies observe the success of Allied and GE :Siebel, Bombardier, Whirlpool, Navistar, Gencorp, Lockheed Martin, Polaroid,Sony, Nokia, John Deere Siemens, BBA, Seagate, Compaq, PACCAR, Toshiba, McKesson, AmEx, ... 1999: Starting to see exponential growth. Formal Six Sigma training begins at ASQ: Johnson & Johnson, Air Products, Maytag, Dow Chemical, DuPont, Honeywell, PraxAir, Ford, BMW, Johnson Controls, Samsung

Sigma Levels Sigma Level A value from 1 to 6 that signifies the maximum number of defects per million: 1 Sigma = 690,000 defects/million = 31% accurate 2 Sigma = 308,537 defects/million = 69.1463% accurate 3 Sigma = 66,807 defects/million = 93.3193% accurate 4 Sigma = 6,210 defects/million = 99.3790% accurate 5 Sigma = 233 defects/million = 99.9767% accurate 6 Sigma = 3.4 defects/million = 99.999997% accurate

Six Sigma Key Concepts At its core, Six Sigma revolves around a few key concepts. Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the customer wants Process Capability: What your process can deliver Variation: What the customer sees and feels Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels Design for Six Sigma (DFSS): Designing to meet customer needs and process capability

Six Sigma Methodology Six Sigma has two key methodologies: DMAIC and DMADV. DMAIC is used to improve an existing business process. DMADV is used to create new product designs or process designs in such a way that it results in a more predictable, mature and defect free performance. Sometimes a DMAIC project may turn into a DFSS project because the process in question requires complete re-design to bring about the desired degree of improvement.

Statistical Process Control Methodology Statistical process control is an important part of Six Sigma methodology, which proceeds through the following steps, also called DMAIC (Define, Measure, Analyze, Improve and Control): 1. Define - benchmarking, process flow mapping, flowcharts 2. Measure - defect metrics, data collection, sampling 3. Analyze - Fishbone diagrams, failure analysis, root cause analysis 4. Improve - modeling, tolerance control, defect control, design changes 5. Control - SPC control charts, performance management

Six Sigma Five Phases Basic methodology consists of the following five phases DMADV (Define, Measure, Analyze, Design, and Verify): Define - formally define the goals of the design activity that are consistent with customer demands and enterprise strategy. Measure - identify CTQs (Critical to Quality), product capabilities, production process capability, risk assessment, etc. Analyze - develop design alternatives, create high-level design and evaluate design capability to select the best design. Design - develop detail design, optimize design, and plan for design verification. This phase may require simulations. Verify - verify design, setup pilot runs, implement production process and handover to process owners. This phase may also require simulations.

Six Sigma Tool Box Define Measure Analyze Improve Control Benchmarking Value Stream Map Fishbone Diagrams Modeling SPC Charts Process Flow Mapping Cause & Effect FMEA Tolerance Control Performance Metrics Flow charts Defect Metrics Root Cause Analysis Defect Control Multiple Regression Project Charter as a Team Statistical Analysis ANOVA Design Changes Train Set Up a Plan & Guidelines for Team Data Collection Run Charts, Time Series Chars, Time Value Charts, Pareto Charts Cause & Effect Diagram Piloting Review Existing Data Sampling Scatter Plots Best Practices SIPOC

Six Sigma Key People Roles Executive Leadership includes CEO and other key top management team members. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. Champions are responsible for the Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from the upper management. Champions also act as mentor to Black Belts. Master Black Belts, identified by champions, act as in-house expert coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from the usual rigor of statistics, their time is spent on ensuring integrated deployment of Six Sigma across various functions and departments. Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts and support them in achieving the overall results.

Minimum Training Executive – 1 to 2 day workshop Champion – 1 week Green Belt training Green Belt – 2 weeks of classes over 2 months Cert: 3 years of work and one project $2000 -$4000 Black Belt – 4 weeks of study over 4 months Cert: 3 yrs of work, 2 documented projects, recertify every 3 yrs. $5000 - $6500 Master Black Belt – two weeks extensive training with additional mathematical theory, quality, lean, super project, mentoring Cert: 3 years of work, additional projects, recertify every three yrs. $5000

Recognized Training GE Motorola ASQ American Society for Quality Six Sigma Academy Institute of Industrial Engineers ISSSP International Society of Six Sigma Professionals

"... the most powerful breakthrough management tool ever devised" Six Sigma Quotes "... the most powerful breakthrough management tool ever devised" Mikel Harry and Richard Schroeder Six Sigma: The BREAKTHROUGH Management Strategy Revolutionizing the World's Top Corporations "Six Sigma is arguably the most important business and industry initiative that has involved statistical thinking and methods." Ronald D. Snee "Impact of Six Sigma on Quality Engineering" Quality Engineering Volume 12, Number 3, 2000 "Six Sigma has spread like wildfire across the company and its transforming everything we do." Jack Welch, CEO, GE Business Week special report June 8, 1998

Next step in Lean & Six Sigma? Next step is the Lean Six Sigma Process that combines the benefits of both lean TPS systems and six sigma into one program.