LESSON 4 Process Improvement – Lean 29 August 2014

Lesson Objectives Upon completion of this lesson, you should be able to: Contrast the roles and techniques of the Lean and Six Sigma methodologies Evaluate a given scenario for opportunities for improving Quality, Productivity, and Cost

Lesson Topics This lesson will cover the following topics: Lean Manufacturing and Six Sigma Lean Manufacturing Six Sigma

What’s In It For Me? Your understanding of Lean Manufacturing and Six Sigma will enable you to support your suppliers’ efforts toward continuous improvement

Lesson Introduction How does Lean Manufacturing and Six Sigma improve quality, increase productivity, and reduce cost?

Lean Manufacturing and Six Sigma Lesson Topics: Lean Manufacturing and Six Sigma Lean Manufacturing Six Sigma

Lean Manufacturing and Six Sigma Standards for: Quality Cost reduction Production Improves customer satisfaction and builds customer loyalty through improved quality

Lean and Six Sigma Similarities Scientific, disciplined approach Both Lean and Six Sigma adhere to the principles of scientific investigation Consistent practices and large process capability driven Data-driven methodologies Change a process when data necessitate it Perform processes the same way every time

Lean Manufacturing and Six Sigma Lesson Topics: Lean Manufacturing and Six Sigma Lean Manufacturing Six Sigma

Lean Manufacturing Value Stream Maps Lean Toolkit Lead-time Reduction Use visual cues, identify and eliminate waste, reduce lead times, simplify, standardize.

Lean Tools Lean tools include: Value stream maps Improved process layouts 5S (Sort, Straighten, Shine, Standardize, Sustain) Visual processes Mistake-proofing (Poka Yoke) techniques Work cells

Lean Tools (cont.) Lean tools improve a process and eliminate waste by: Simplifying a process Standardizing the process Making the process visually apparent Synchronizing process steps Mistake-proofing process steps Reducing changeover time Using technology and automation effectively

Value Stream Map A value stream map: Identifies the value-added and non-value added steps Enables you to identify waste in the process Visually identifies steps in a process Identifies lead time required for each step Identifies process time for each process step

Waste Waste is anything that increases process lead time or adds cost without benefitting the customer Waste will not: Compel the customer to pay more Raise customer satisfaction

Seven Deadly Types of Waste Waiting Overproduction Inventory Defects Transportation Overprocessing Motion

Example: Value Stream Map Pilot Pulls Plane to Gate Gate Attendant Moves Jetway Flight Attendant Opens Door Lead Time 360 sec LT 1000 sec Lead Time 60 sec LT 10 sec Lead Time 15 sec VA1 VA2 VA3 NVA1 NVA2 1010 sec 435 sec Lead time = 360 sec + 1000 sec + 60 sec + 10 sec +15 sec = 1,445 sec

Process Layouts Sample Process Layout

5S 5S is a visual tool used to: See also: 5S Visual Simplify Reduce wasted time Improve safety Clean and remove clutter See also: 5S Visual http://www.lmsi.ca/5s.htm 5S Sort Straighten Shine Standardize Sustain

Benefits of Lean Methodology Inventory, productivity, and responsiveness improvements Quality improvement Reduction in waste Improved customer satisfaction

Example: Custom Cables, Inc. (1 of 3) Class Activity Refer to Module 5, Lesson 4, Scenario 1 CMM100_M5_L4_S1_Scenario_FINAL.docx Read directions on the Custom Cables, Inc. Complete the activity as a class

Example: Custom Cables, Inc. (2 of 3) What examples of Lean Manufacturing were implemented?

Example: Custom Cables, Inc. (3 of 3) What were some of the results from implementing Lean Manufacturing?

Lean Manufacturing and Six Sigma Lesson Topics: Lean Manufacturing and Six Sigma Lean Manufacturing Six Sigma

Six Sigma Six Sigma (6σ): Reduces quality defects through graphical data analysis and statistical tools Identifies critical causes of quality problems Eliminates causes of quality defects Standardizes and trains processes

Process Capability Index (CPK) Six Sigma (cont.) Six Sigma is a statistical level of quality close to zero defects Specification Limits Amount Defective Outside Sigma Limit Process Capability Index (CPK) Category % PPM* 𝐱 ± 1σ 69 691,462 PPM 0.33 Noncompetitive 𝐱 ± 2σ 31 310,000 PPM 0.67 𝐱 ± 3σ 6.7 67,000 PPM 1.00 Industry Average 𝐱 ± 4σ 0.62 6,200 PPM 1.33 𝐱 ± 5σ 0.023 230 PPM 1.67 𝐱 ± 6σ 0.00034 3.4 PPM 2.00 World Class * A 1% defective = 10,000 parts per million (ppm) defective

Six Sigma Language Six Sigma: Y = f(X) Ys are outputs (quality dimensions) Defects First-Pass Yield Warranty claims Other specific measures Xs are inputs: Raw materials Capacity and capability

Six Sigma (cont.) Use Six Sigma for: Quality improvement: Improve process inputs Identify relationships between inputs and outputs Reduce defects, errors, and variation Identify critical inputs and ensure they are fixed first

Summary of Six Sigma Methodology Reduce quality defects Eliminate causes of defects Improve inputs to improve the outputs Apply graphical data analysis and statistical tools to processes

Six Sigma Tools Reduce variation: X-Bar Chart Sigma X-Bar Chart X-Bar Control Limits P-Chart Statistical Process Control (SPC) and Acceptance Sampling

Exercise: Explaining Lean and Six Sigma Small Group Exercise Find a partner or work in a trio Refer to Module 5 Lesson 4, Exercise 1 CMM100_M5_L4_E1_Exercise_FINAL.docx Read the directions in the exercise Complete the activity; be prepared to share your responses Time allowed: 15 minutes

Summary Having completed this lesson, you should now be able to: Contrast the roles and techniques of the Lean and Six Sigma methodologies Evaluate a given scenario for opportunities for improving Quality, Productivity, and Cost

Summary (cont.) Your understanding of Lean Manufacturing and Six Sigma will support your suppliers’ efforts toward continuous performance improvement.

Module 5 Wrap Up Activity Refer to the Module 5 Wrap up Activity As a team, answer the questions in the Module 5 Wrap Up Activity File Each team must answer all the questions. Each Team must be prepared to present their answers. You have the remaining time as directed by the instructor to complete this activity.