Lean Manufacturing & Six Sigma: A Short Introduction

Part I: Lean Manufacturing

The Lean Production Concept -Originated from the work of Eiji Toyoda, Taiichi Ohno and Shigeo Shingo at Toyota. - After WW II, U.S needed large mass production to satisfy demand for products. - The Allied victory and the massive quantities of material behind it caught the attention of Japanese industrialists.

The Lean Production Concept - Japanese engineers visit the US to learn/help reconstruct the Japanese industrial engine. They studied American production methods with particular attention to: - Ford practices - SPC practices of Ishikawa, Deming, and Juran - Japanese market was much smaller, so more flexible systems were needed to produce smaller quantities of different items in the same equipment.

The Lean Production Concept Toyoda and Ohno develop a system that would help them survive: Eliminate inefficiencies that don’t add value Flexible machinery Involve employees in the solution of problems Manufacture the right product at the right time, in the right quantities Quick Changeover Flexible Machines

Trivia The current Toyota Mark consists of three ovals: the two perpendicular center ovals represent a relationship of mutual trust between the customer and Toyota. These ovals combine to symbolize the letter "T" for Toyota. The space in the background implies a global expansion of Toyota's technology and unlimited potential for the future.

The Lean Philosophy Idea: continuously improve quality and cost. Do more with less… time space human effort machinery materials while meeting customer demands.

Just-in-time After many years, Toyota established the following strategy: 1.      Kanban based pull production. 2.      Waste elimination is guide philosophy. 3.      Faith in importance and value of quality. 4.      “Kaizen” or continuous improvement as a daily strategy. 5.      Emphasis on setup reduction on all machines. 6.      Integrate suppliers and material acquisition into the planning process. 7. Cellular layouts with balanced flow.

Basic Tenets of Lean, JIT Production Categories Improving Production Environment Quality Engineering Improving Material Flow

I. Improving Production Environment Eliminate Waste Employee Cross-Training and Job Rotation Employee Empowerment and Involvement JIT Purchasing Reduction of Variability Mistake-Proof Processes Reduce Setup Times

Some Terminology Muda: Japanese term for any human activity which abosrbs resources but creates no real value. Kaizen: process of continuous incremental improvement through the identification /elimination of muda. Kaizen blitz: an event where a team of managers, engineers and line workers coordinated by a facilitator come together for three days to focus on improvements on an area of a plant.

Some Terminology Typical strategy in Kaizen Event is asking “why” five times until the root cause or motivation for an action is discovered. Golden Rule: Use everyone’s knowledge to identify and implement improvements quickly and cost effectively.

1. Eliminate Waste Original scientific approach was to dissect a large system into small pieces and make each piece optimal. Japanese approach: develop a system that connects the pieces.   Ex. Instead of tracking production statistics and inspecting “out” defective products, eliminate any production of defective items.

Seven Types of Waste commonly found in industry. A. Waste from Overproduction Why make products that won’t be sold? Before, supervisors were evaluated through quotas. Machine utilization needed to be maximized. New idea: machines and humans should only be busy when they have useful tasks to accomplish.

Seven Types of Waste commonly found in industry. B. Waste of Motion Eliminate motions that do not add value. Look at workplace design, process planning, detailed job procedures, material handling.

Seven Types of Waste commonly found in industry. C. Transportation Waste Position work and storage areas such that material moves are short. Keep tooling near its point-of use.

Seven Types of Waste commonly found in industry. D. Processing Waste Eliminate non-value added operations. May need to go back to product design and revise features and tolerances.

Seven Types of Waste commonly found in industry. E. Wasted Time (queuing) Plan for: Small lot sizes Ordered production and release of dependent Items Good coordination will achieve small WIP and throughput time.

Seven Types of Waste commonly found in industry. F. Defective Products… Cost money Deplete resources Negatively impact customer perception Reduce throughput

Seven Types of Waste commonly found in industry. G. Excess Inventory yields added costs due to… Space, obsolescence, opportunity costs, handling, among others. Avoid excess inventory. Can achieve via modular components. Negotiate long term contracts with suppliers to ensure a steady stream of high-quality parts. Make only what has/will be sold immediately.

2. Employee Cross-Training and Job Rotation Can train over time to do variety of tasks in their work area. Can then rotate through different positions. Benefits: Enhances worker flexibility and enthusiasm. Prevents boredom, fresh perspectives and ideas for improvements. Gives context of communication between workers on same team.

2. Employee Cross-Training and Job Rotation Benefits (continued): Minimizes fatigue and repetitive stress injuries. Can move workers around to eliminate temporary bottlenecks. In U-shaped cells, workers can operate more than one machine at a time.

3. Employee Empowerment and Involvement Why hire a body when it comes with a brain? Employees are a great source of ideas for improvement. Employees must be allowed and encouraged to do so. This includes authority to stop production and correct a problem in production. The goal is to identify problems early.

3. Employee Empowerment and Involvement A usual approach to empower is via a switch to stop production. This warning system is called Jikoda. Jikoda is the concept where if there is a defect it is identified and solved immediately.

3. Employee Empowerment and Involvement For an example if there is a problem in machine, the production line will be stopped and the problem will be fixed immediately. The warning light system is called andon. Usually a bank of three lights is used: green, yellow and red.

3. Employee Empowerment and Involvement One light is always on, indicating station status. Red light signals a line stoppage and location of problem to other workers. Nearby workers assist with the problem, get additional help if necessary. Identifier and solver of problem are rewarded.

3. Employee Empowerment and Involvement Employees should be involved in developing procedures. Workers take pride in job if they know they are helping meet customer expectations.

3. Employee Empowerment and Involvement Worker area should also be kept clean and organized. This helps in pride and dedication. 5S’s: Sort, Straighten, Sanitize, Sweep and Sustain (more later). Organized workplace reduces: Misplacing Contamination Brightens up atmosphere Gives feeling system is under control. Conveys that sloppiness is not tolerated.

4. JIT Purchasing Changes that can be implemented 1.  Sole source vs. multiple supply sources. - Idea: better negotiate long-term contracts with single supplier. - This encourages cooperation instead of competing over terms. - Supplier’s long term interest is now to provide high quality on time at a fair price to ensure customer’s success.

4. JIT Purchasing Changes that can be implemented 2. Frequent delivery of small lots vs quantity discounts. - Traditional approach: occasional deliveries of large quantities of parts. - Parts were inspected via sampling. -Now, no inspection is needed since vendor product quality has been certified and meets requirements. (If not, get a new supplier).

4. JIT Purchasing Changes that can be implemented 3. Flexible ordering vs. paperwork. - Contracts usually call for steady flow of product +/- 10% - Customer can change order quantity on short notice with little hassle. - Requires some reserve capacity by vendor.

4. JIT Purchasing Changes that can be implemented Vendor owns and manages inventories. -Vendor can hold inventory on customer’s site. - Customer gets billed only when extracting parts. - Supplier has responsibility to keep enough inventory level.

5. Reduction of Variability Variability reduces efficiency. If supplies, yields or machine availability are unpredictable, the tendency is to have large safety stocks of inventory. Idea: Eliminate variability from production processes.

6. Mistake-Proof Processes This involves eliminating opportunities for errors. Idea: Design processes to avoid producing defective items. Be able to detect defects before more production steps are done. Poka-Yoke: “mistake proofing a process.”

6. Mistake-Proof Processes Basic ideas: 100% of units should be inspected. Identify defects as close to the source as possible. Stop production immediately and take corrective action right after a defect is detected. Design processes to avoid producing defects.

6. Mistake-Proof Processes Some Poka-Yoke Techniques Checklists and worker source inspection. Worker checks his own work. Problem: humans tend to approve their own work. Checklists help ensure all steps have been completed in station.

6. Mistake-Proof Processes Some Poka-Yoke Techniques Successive check systems Worker checks incoming parts from previous station before starting his own operation. Worker must approve work by previous worker or defects must be communicated to previous worker right away.

6. Mistake-Proof Processes Some Poka-Yoke Techniques Mistake-proof part and fixture design. Design parts so that they can only fit in a tooling fixture in proper orientation. Reshape symmetrical parts to exaggerate asymmetries – easier to detect misalignments.

7. Reduce Setup Times Usually the MOST productive investment that can be made to improve production system performance.   Techniques (*):   - Design parts for manufacturability - Design parts for standard tools. -  Develop standard methods for setups. - Divide setup activities into external/internal tasks. -  Design procedures to perform setup tasks in parallel. - Modular fixturing - Eliminate adjustments. - Use power clamps.

Transitioning from Traditional to Lean 1900’s Philosophy Worker was immigrant, uneducated, spoke little English. Worker is like a machine designed to perform a limited set of tasks well. Product customization was not an issue for customers (all model T’s were the same).  2000 Lean Philosophy Worker: most flexible machine. If properly educated, worker can solve problems and adapt to new situation. The customer expects customization.

Transitioning from Traditional to Lean Old Production Mentality: Process-Based Organization Economic Order Quantities Large Unit Handling Loads Receiving Inspection Maximize Equipment Use

Transitioning from Traditional to Lean New Lean Thinking Product Cell Layouts Single-Unit mixed model production Continuous material flow Mistake proofing Balanced production line

Problems in Implementing Lean Cannot make it happen without the support of floor operators. Culture change needs to happen. Old philosophy: run large batches to amortize setup costs of the largest number of parts and products. New philosophy: demand based production. Management not fully involved. Loss of interest by top management and workers. After initial implementation, no hard benefits seen in bottom line. Might have implemented Lean in wrong areas.

Transition Stages in Lean Thinking (Ford Motor Company) Phase 1: Process Stabilization Improve production environment - predictable/reliable processes - total productive maintenance - total quality – poka yoke - setup time reduction - standard procedures - clean & organize the workplace -train employees in lean thinking. Phase 2: Continuous Flow Reduce WIP and batch sizes. No need to run machines at full capacity. Unit parts can plow in small or single quantities between workstations.

Transition Stages in Lean Thinking (Ford Motor Company) Phase 3: Synchronous production. Follow weekly production schedules. Phase 4: Pull authorization To authorize production, parts must be “pulled” by successive workstations. Kanbans dictate production. Phase 5: Balanced production All process produce at a constant level and continuous rate. Every part type is made daily; parts flow continuously.

Lean Production Toolbox 5S Quick Changeover TPM (Total Productive Maintenance) Value Stream Mapping Kanban / Visual Management Improvement Activities – Kaizen Continuous Flow JIT

What is 5S? A system for higher productivity, less defects and a safer workplace. A method to improve and sustain the workplace organization. 5 constant behaviors to maintain a visual workplace First step towards Lean Manufacturing Reduces clutter and time to look for tools Improves efficiency and appearance Motto: A place for everything and everything in its place.

The Five S’s Seiri (Sort) Remove all unnecessary materials / equipment Set in Order (Seiton) Make it obvious where things belong Shine (Seiso) Clean everything inside and out. Standardize (Seiketsu) Establish policies/procedures to maintain 5S Sustain (Shitsuke) Train, daily cleaning activities The 6th ‘S’: Safety Commit to safety in all activities.

Value Stream Mapping A pencil and paper tool that helps you to see and understand the flow of material and information as a product makes its way through the value stream. Follow a product’s production path from customer to supplier Carefully draw a visual representation of every process in the material and information flow. Then ask a set of key questions and draw a “future state”map of how value should flow.

VSM Goals Improve the “value Added” process through step-by-step review and identification of connections, activities, information, and flow. Aim: Create a picture of the system of processes from beginning to end.

Example of Value Stream Mapping

Example of Value Stream Mapping

Example of Value Stream Mapping

Part II: Introduction to 6 Sigma

What is Six Sigma (6s)? A movement focused on business process improvement. It is a quality measurement and improvement program Focuses on the control of a process to the point of ± six sigma (standard deviations) from a centerline. Provides businesses with the tools to improve the capability of their business processes. (Cp)

What is Six Sigma (6s)? A disciplined methodology Uses data and statistical analysis to measure and improve a company's operational performance Helps identifies and eliminates "defects" in manufacturing and service-related processes.

History Credit for coining the term "Six Sigma" goes to Motorola engineer named Bill Smith It is a Motorola registered trademark 1980s: Motorola developed the methodology and needed cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line results in their organization. Six Sigma is a tool to achieve success.

What is Six Sigma (6s)?

Six Sigma Basics Std Deviation (σ)–Most common measure of statistical dispersion, measuring how spread out the values are from their mean (average) Computing the Std Deviation –Data Set:•5,6,8,9

Six Sigma Basics 6 Sigma Focuses on the Reduction of Variation that Generates Defects for Customers

Defect Reduction due to Variation Achieved by eliminating root causes of variation that affect the amount of variation in the process output

Six Sigma Basics Achieved by Eliminating Root Causes of Variation which move the mean performance of the process output

Six Sigma Basics

Six Sigma Philosophy

Six Sigma Philosophy

Six Sigma Tools Process Mapping Tolerance Analysis Structure Tree Components Search Pareto Analysis Hypothesis Testing Gauge R & R (Repeatability and Reproducibility) Regression Rational Subgrouping DOE Baselining SPC

Six Sigma Methodologies - DMAIC vs DMEDI DMAIC (Define, Measure, Analyze, Improve, Control): an analytical, data-driven approach to eliminating weaknesses in active processes, products and services. focuses on reducing variation and defects, produces incremental improvements.

Six Sigma Methodologies - DMAIC vs DMEDI DMEDI (Define, Measure, Explore, Develop, Implement): a creative approach to designing new robust processes, products and services. A roadmap focused on obtaining significant competitive advantages or quantum leaps over current environments. DMEDI projects typically require more time and resources to complete.

Six Sigma Methodology The greatest difference between the two roadmaps lies in their unique purposes. DMAIC roadmap resources are spent on reducing waste, cost or time in a process. DMEDI resources are focused on preventing potential losses

DMAIC Methodology

DMEDI Methodology

DMAIC vs DMEDI DMAIC DMEDI Define – Determine Project Scope, Objectives, Resources, Constraints Measure – Determine Customer Groups, Determine CCRs, Obtain Data to Quantify Process Performance Analyze - Analyze Data to Identify Tangible Root Causes of Defects Improve – Intervene in the Process to Improve Performance, Pilot New Process Control – Implement a Control System to Maintain Performance Over Time DMEDI Define – Very Similar to DMAIC Measure – Define Customers and Needs Using Voice of the Customer and QFD, Determine CCRs Explore – Develop Design Concepts, and High-Level Design Develop - Develop and Optimize Detailed Design Implement – Validate Design with Pilot, Establish Controls, Full-Scale Implementation

DMAIC vs DMEDI Transactional Business Environment: > Reduce cycle time and errors on service orders > Increase first call resolution on support calls > Reduce service order cycle time Service Manufacturing Environment: > Reduce product manufacturing/assembly cycle time > Provide IT solutions – improve backup and recovery time, reduce patching time   > Identify causes and eliminate defects in molds > Eliminate false server alerts Product Development Environment: > Reduce product development cycle time > Identify causes of defects in a copier design > Reduce defects released in new software versions

DMAIC vs DMEDI Transactional Business Environment: > Design a new project management office > Develop a new service order handling process > Develop a new contract renewal process Service Manufacturing Environment:  > Major redesign of manufacturing process (conversion from gasoline to alcohol engines) > Weld new materials > Design new triage process for new technologies > Develop new formats for storing larger data files Product Development Environment: > New fuel injection design > New material development > Next generation ink delivery system

DMAIC vs DMEDI: which to use?

Green Belts, Black Belts, Master Black Belts - Employees who take up Six Sigma implementation along with their other job responsibilities. – Lead and execute important process improvement projects. –Are proficient in the basic tools (Courses 1-7) of Six Sigma and can characterize their processes. –Typically work part-time on projects. - Operate under the guidance of Black Belts and support them in achieving the overall results.

Green Belts, Black Belts, Master Black Belts – Lead and execute more strategic, high impact process improvement projects. –Are proficient in both the basic and advanced tools (Courses 8-14) of Six Sigma and can both characterize and optimize their processes. –They devote 100% of their time to Six Sigma. - Operate under Master Black Belts to apply Six Sigma methodology to specific projects.

Green Belts, Black Belts, Master Black Belts Focus on identifying projects/functions for Six Sigma. Act as in-house expert coach for the organization on Six Sigma. Devote 100% of their time to Six Sigma. Apart from the usual rigor of statistics, their time is spent on ensuring integrated deployment of Six Sigma across various functions and departments.

Green Belts, Black Belts, Master Black Belts Champions 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.

Putting the Two Together…Lean Six Sigma A philosophy of “Continuous Improvement” in quality and cost. It is the elimination of all types of waste in any type of process. Launched Toyota to the top of the automobile industry, while other companies fell to mediocre levels. Do more with less… Time - Space Human effort - Machinery Materials while meeting the customer’s demands.

Putting the Two Together…Lean Six Sigma The application of the DMAIC Methodology Supplemented with concepts extracted from the principles of lean. Combined together, they provide a sustainable process for increasing velocity, managing inventory/capacity and reducing waste.

Putting the Two Together…Lean Six Sigma Shortcomings of each: •Six Sigma will eliminate defects but it will not address the question of how to optimize process flow. •Lean principles exclude the advanced statistical tools often required to achieve the process capabilities needed to be truly 'lean‘. Utilizing both methods simultaneously holds the promise of being able to address all types of process problems with the most appropriate toolkit.

Benefits of Lean Six Sigma • Achieve total customer satisfaction and improved operational effectiveness and efficiency Remove wasteful/non-value added activities Decrease defects and cycle time, and increase first pass yields • Improve communication and teamwork through a common set of tools and techniques (a disciplined, repeatable methodology) • Develop leaders in breakthrough technologies to meet stretch goals of producing better products and services delivered faster and at lower cost

Conclusions •Excessive variation increases the cost of poor quality •DMAIC Methodology is used to improve existing products and process •DMEDI methodology is used to create new products and processes •Lean is a natural fit with Six Sigma •Process management is critical to sustain the gains

Sources and references: Askin, Ronald et al “Design and Analysis of Lean Production Systems” Wiley 2002 Florida International University – Global and Corporate Programs (Lean Six Sigma Certification Course - 2006) http://www.asq.org/certification/six-sigma/bok.html http://en.wikipedia.org/wiki/Six_Sigma http://books.google.com/books?id=9ObvCcJsz1kC&dq=definition+of+visual+workplace&pg=RA1- PA91&ots=tQqmfyJZez&sig=cYcXnDI0ycIWYMIJo6ZbTYQzpxg&prev=http://www.google.com/search%3Fhl%3Den%26q%3Ddefinition%2Bof%2Bvisual%2Bworkplace&sa=X&oi=print&ct=result&cd=2#PRA1-PA2,M1 http://www.semizone.com/product-file/22/sixs1522/overview_notes.pdf http://www.isixsigma.com/library/content/c060313a.asp http://www.sme.org/cgi-bin/get-mag.pl?&&03sem002&000007&2003/03sem002&ARTME&SME&  http://www.sme.org/cgi-bin/get-mag.pl?&&03sem005&000007&2003/03sem005&ARTME&SME& http://www.sme.org/cgi-bin/get-newsletter.pl?SIGMA&20070129&1&