Lean Six Sigma Fundamentals Training

Lean Six Sigma Fundamentals Training Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Classroom Logistics • Safety • Exit routes and emergency procedures of the facility • Safety hazards • Logistics • Location of restrooms, soda machines, LAN access, etc. • Courtesy and Respect • Turn off all cell phones and computers during class • Be engaged and participative Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 TRAINING Objectives To provide participants with an awareness of: • Lean Six Sigma • Lean Six Sigma Principles • Kaizen Events Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma (LSS) • A systematic approach of identifying and eliminating non-valueadded activities through continuous improvement. • Built on the premise that the lowest cost and highest velocity is achieved when quality is at it’s highest. This includes quality of all business processes and services, not simply product quality. • It maximizes employee involvement to solve problems and improve processes. • Relentless focus on elimination of waste and creating greater customer value. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma (LSS) Producing what is needed, when it is needed, with right amount of materials, equipment, labor, and space Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Why Lean Six Sigma (LSS)? • LSS focuses on customer value keeping us competitive in the long-term horizon. • Effective LSS initiatives empower employees and build trust within the company. • LSS provides a common sense approach to continuous improvement that focuses on waste elimination. • LSS extends beyond manufacturing and is applied to all processes or functions. • A successful LSS journey will have significant impact on an organization’s performance. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Philosophy Too early Too late Defects Too early? Too much inventory on hand…Asset costs too high! Defects Too late? Missed sales... Lost revenue, lost customers Delivery Time Too early Too late Rath & Strong, 2000 Delivery Time Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Focus of LSS The Process Equation The process equation is fundamental to Lean Six Sigma concepts and methods. It represents a process with “Y” as the outputs and “x” as the inputs. Y = f(x) Y = f(x) Y OUTPUTS The goal is to meet customer requirements. x INPUTS & PROCESSES To improve, we must understand the x‟s of our process. Owned by BOS Program Office, Last edited: 3/5/07 Ver. 1.0 Lean Six Sigma Results Project Y Examples Cycle Time Quality Cost Delivery Time Baseline Period Kaizen & DMAICL End of Project USL Y Project Life Cycle Your Project Goal… Move The “Y” Question: How Should The “Y” Move ? Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Potential Impact of Lean Six Sigma Inventory Reductions Free Up Floor Space Increase Turns Productivity Gains Lead Times Cut 10-50% 10-50% 30-100+% 12-50% 30-70% Product Cycle Reduced 15-40% Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Benefits of Lean Six Sigma • Eliminate waste daily • Learn by doing • Encourage innovation – keep stretch goals • Work toward zero defects • Know and show baseline / current measurements • Drive step function improvements • Continuously improve daily • Involve people early Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Employee Expectations • Participate on LSS project teams • Participate business processes • Follow pate in creation and/or deployment of common and support the company’s common business processes, once implemented • Use defined process modules and tools in day-to-day activities • Incorporate Lean Six Sigma methodology • Training for all employees over the next year on Lean Six Sigma Fundamentals Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Workplace Organization 5S • Sifting, removing everything from your work place that is not required to do the job. • Sorting, Establishing a semi-permanent location for all required objects in the workplace • Sweeping and Washing, cleaning the workplace to eliminate all dirt and rubbish • Spic and Span, The result of the first three S’s • Self Discipline, The most difficult of the S’s. Requires constant vigilance to maintain the accomplished levels of Spic and Span Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Becoming Waste Conscious The 7 Elements of Waste … • Over production • Correction • Inventory • Processing • Conveyance • Motion • Waiting Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Overproduction Producing goods at a rate faster than required or producing more than is required. Overproduction leads to increased levels of all other types of waste. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Correction The quality of our product can only be as good as the quality of the worst component, (remember the RTY calculation). The waste in our process is magnified by the cost associated with correcting the defect as well as the costs associated by delaying further production while waiting for the correction The waste of correction is often amplified by overproduction. Not only have we generated the mistake once, but unknowingly we have generated the same defect multiple times. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Inventory Inventory costs money. As we build excess inventory to accommodate problems in our process, the costs escalate. Safety stock levels are driven by downtime, quality problems, supplier delivery problems, line imbalances etc. Lowering the amount of in process inventory forces us to improve our processes. $$$ Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Processing Everything we do in our organization is part of a process. However… We sometimes OVER PROCESS. We use systems and tools that are really the equivalent of using a surgeon to remove a splinter. Remember, resources cost money and when we over process, we use the organizations resources that are not required. WASTING RESOURCES Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Conveyance $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ EVERY TIME, you move a part, you add cost to that part. Unfortunately, the added cost does not translate to added value. We cannot charge our customer more because we have shuffled our products around the plant or around the world. We must MINIMIZE conveyance in order to preserve our product margins. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Motion Waste of motion can occur in many forms. People moving to gather needed tools and components to perform their work. Movement of equipment that adds no value like machining “air cuts”, multi-spindle indexes etc. In most cases, just recognizing the opportunity is the most difficult part of reducing this waste. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Waiting We cannot wait in line anywhere without growing impatient. EXCEPT… When we are at work. It is often with a sigh of relief that we accept a waiting period at work. Waiting for “batch produced” WIP from a previous process. Waiting for a document from a previous department. Waiting for inventory (raw components) to be delivered etc… All types of waiting cost $$$ To minimize waste we must see out opportunities to eliminate the waste of waiting. Remember… The waste of waiting is 100% waste, whenever it is identified the cost is reduced by ALL of the Ver. 1.0 amount of wait time you have eliminated. Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principles 1) Specify value in the eyes of the customer 2) Identify the value stream and eliminate waste 3) Make value flow at the pull of the customer 4) Involve and empower employees 5) Continuously improve in pursuit of perfection Adapted from Womack, J. P. and D. T. Jones, 1996, Lean Thinking, Simon & Schuster. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principle One Value Value Stream Flow/Pull Empowerment Value Add vs. Non-Value Add Defining Value Recognizing Value Perfection Ver. 1.0 Importance of Value Owned by BOS Program Office, Last edited: 3/5/07 How Value is Defined • Value is defined… • by the end customer. • to meet customer’s needs at a specific price at a specific time. • when expressed in terms of a specific product or service. • To understand value, we must have dialogue with specific customers. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 How to Recognize Value Value is provided when a quality product or service is delivered…… • that meets the customer requirements, • within the customer response time, • in the proper quantity, • with minimal waste and • at the right price. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Value Added vs. Non-Value Added Activity Value must be defined by the end customer. Value-Added Activity: an activity that adds value from a customer perspective. a) Customer is willing to pay for activity or service b) The activity physically transforms the product or service offering c) Activity is performed correctly first time Non-Value-Added Activity: Activities in a process or service that neither add value to a product or service, nor enable other value added activities. These activities take time, resources, and/or space, but do not add value to the product or service from a customer perspective. Some of these activities are necessary and unavoidable, but nonetheless still considered waste. (e.g. Inspection) Ver. 1.0 Ingersoll Rand people are always value added. Owned by BOS Program Office, Last edited: 3/5/07 Why focus on value? • Customers have choices in the marketplace. • Purchasing decisions are based on a combination of factors: Price Durability Quality Brand Delivery Etc. • Global competitors look for the optimal combination of these factors to maximize customer value. • If we fail to consistently focus on maximizing customer value, our share of the market will erode. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principle Two Value Streams Value Value Stream Wastes Flow/Pull Empowerment Importance of Focusing on Inventory Perfection Value Stream Mapping Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 A Value Stream What is a value stream? INFORMATION FLOW Market & Sales Design Order Entry Suppliers Sub Assy Mfg Assembly Finance PRODUCT/SERVICE MATERIAL FLOW All the activities from customer order to cash. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Customer Value The eight ways we waste 1. Transportation – multiple handling, delay in material handling, unnecessary handling 2. 3. Inventory –up or implementing employee ideas or suggestions. holding or purchasing unnecessary raw material, WIP and finished goods 4. 5. 6. Motion – actions of people or equipment that do not add value Waiting – time delays, idle time, non-value added time Over-production – producing over customer requirements, producing unnecessary materials/ products Over-processing – unnecessary processing steps or work elements. Procedures Defects – producing a part that requires rework or is scrapped Unused Creativity – not following Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 7. 8. 9. Employees and Waste • Waste is an activity. • Employees are never considered waste. • At times some wasteful activities are required until the current process can be improved. • The intent of Lean Six Sigma is to redefine our processes so that everyone spends more time on value added activities. • This increases value to our customers as well as our own competitiveness in the global marketplace. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Importance of Focusing in Inventory Inventory is a Key Lean Six Sigma Indicator • Inventory turns can be used to measure the velocity of a process. • Other wastes usually result in excess inventory. • As wastes are eliminated and inventory reduced, the velocity of the process will increase. • This means higher value for our customers at a lower cost for Ingersoll Rand. Inventory Examples Retained E-Mails Unprocessed Orders Paperwork Raw Materials & Parts Finished Goods Quotes Awaiting Approval Job Applications Open Purchase Orders Uncommunicated Ideas Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Inventory Hides Problems: Manufacturing Process Inventory is like a river, when water level is lowered, boulders must be dealt with Inventory/ Batch Size 100 Sea of Inventory/WIP 50 0 Long Transportation Long Setups Defects Ver. Poor Scheduling 1.0 Line Imbalance Owned by BOS Program Office, Last edited: 3/5/07 Lead / Cycle Time Inventory Hides Problems: Transactional Process Inventory is like a river, when water level is lowered, boulders must be dealt with Data/System Invoice Inventory/ WIP 100 Sea of Inventory/WIP 50 0 Sending forms from one location to the next for approval Multiple Approvals Multiple Data Streams Errors Errors in data. Incomplete data. Ver. 1.0 Wrong discount. Waiting Overload One process is taking longer than the rest Owned by BOS Program Office, Last edited: 3/5/07 Gathering data takes too long. Inputting takes too long. Vacation scheduling. Poor synchronization. Lead / Cycle Time Value Stream of a Carton of Cola Incoming Storage Mine Reduction Mill Smelter 2 wks 3 mos Processing Time 20 min 30 min 2 hrs Finished Storage 2 wks 2 wks 2 wks Total Value Stream = 324 days Value add = 3 hours Hot Rolling Mill Cold Rolling Mill Can Maker 2 wks 2 wks 2 wks 1 min 1 min 1 min 4 wks 4 wks 4 wks Can Warehouse Bottler Bottler Warehouse 4 days 1 min 1 wk 5 wks 1 wk VA/NVA = 0.04% Tesco Warehouse Tesco Store Total 144 days 3 hrs 3 days 2 days 180 days Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Value Stream Mapping It is not uncommon to realize a 50 - 70% reduction in processing time !! 150 Days Inventory 15 Days Inventory 3 Hours Processing Ideal State (all value, no waste) 3 Hours Processing Future State 324 Days Inventory 3 Hours Processing (3-6 month target) 324 Days Inventory 3 Hours Processing Current State (where you are now) Ver. 1.0 No Action Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principle Three Value Value Stream Flow/Pull Flow/Pull Definition Principles Empowerment Perfection Ver. 1.0 Examples Prerequisites Owned by BOS Program Office, Last edited: 3/5/07 What is Flow/Pull? The progressive achievement of tasks along the value stream so that a product proceeds from design to launch, order to delivery, and raw materials into the hands of the customer with no stoppages, scrap, or back flows. Before Flow After Flow Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Flow/Pull Principles • • • • Match Output Output to Customer Demand. Reduce Variation Within the Process. Identify Opportunities to Eliminate Waste. Balance the Line. • Create a Continuous Flow. • Utilize the Smallest, Cost Effective Quantity (Lot Size). Ideal State: • Only Value Added Steps/time • Balanced flow • No Scrap/Rework • No Back Flows Process A Process B Process C Process D Flow/Pull Principles Look at the Entire Process • No Stoppages • Continuous Flow Owned by BOS Program Office, Last edited: 3/5/07 Ver. 1.0 Push vs. Flow/Pull Systems • Push system • resources are provided to the consumer based on forecasts or schedules. • Flow/Pull system • a method of controlling the flow of resources by replacing only what has been consumed. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Push System • In a “Push” System upstream processes supply material as produced – not necessarily as needed Traditional “Push” System Material Flow Casting Machining Assembly Final Changes in Demand Changes in Demand All processes must be rescheduled simultaneously. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Downstream Upstream Flow/Pull System • In a “Flow/Pull” System downstream process signal the need for, or pull material from upstream processes. Lean “Flow/Pull” System Material Flow Casting Machining Assembly Final Pull Signals Changes in Demand Changes in Demand Continual update of upstream processes with pull signals. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Downstream Upstream Prerequisites for Flow/Pull Systems For JIT/Pull systems to be successful, other LSS Concepts are needed: • • • • • • Quality at the source (Zero defects) Poka-yoke (Fail safe tools and methods) Preventive maintenance (TPM) Good housekeeping (5S) Set-up time reduction (SMED) Waste elimination Flow/Pull systems typically utilize some form of Kanban (visible record), which is the fundamental activity control in a lean system Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principle Four Value Value Stream Flow/Pull Empowerment Perfection Employees Responsibility LSS Culture Importance Benefits to Employees Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 What a Lean Six Sigma Culture Looks Like • Everyone knows what the goals are for the process, leading to more alignment and better communications. • Teams continuously monitor how well their process is performing towards the goals. • Problems are identified within the process. • Processes are managed visually; both in the factory and in the office. • Process improvements can be initiated by anyone and are happening all the time. • People talk about eliminating wastes on a daily basis. • More focus on process improvement versus disciplinary action. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Employee’s Responsibility for LSS • Work to achieve world class process performance in: Safety Quality Delivery Cost • Become agents of change • Prefer change over failure to seek change • Implement radical change followed by continuous improvement • Give ideas, look at what you do • Participate in LSS projects when requested Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 ALL EMPLOYEES Benefits to Employees What’s in it for me? LSS provides the following benefits for employees: • Standardizes the way we work, thereby reducing conflict and increasing alignment with management. • Allows employees to express and incorporate ideas on how to do their jobs better. • Seeks to balance work between processes. • Fosters a team environment and a sense of common purpose. • Helps to ensure we have the proper tools to do our jobs. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Principle Five Value Value Stream Flow/Pull Empowerment Perfection Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Execution Projects Kaizen DMAICL Sustainment Lean Six Sigma Execution Once a future state value stream map has been developed for a process, LSS projects must be completed to reduce waste and methods must be implemented to sustain the gains. Value Stream Identification Value Stream Mapping Lean Six Sigma Projects Continuous Ver. 1.0 Sustainment Owned by BOS Program Office, Last edited: 3/5/07 Types of Lean Six Sigma Projects • Kaizen Events • • • • • • • • Used to achieve continuous improvement All employees are able to participate Events last a few hours to several days Basic toolset Used to achieve breakthrough performance of processes Projects led by Black Belts and Green Belts Projects generally last two to six months Statistical and project management toolset • DMAICL Projects Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Projects PROBLEM COMPLEXITY BB PROJECTS Black Belts GB PROJECTS Green Belts KAIZEN EVENTS Everyone EMPLOYEE INVOLVEMENT Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Kaizen Event The Kaizen Event is a tool that empowers people to achieve rapid, tangible results. The process combines people, material, and equipment improvements to drive bottom-line results. Kaizen is Action Oriented! Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Importance of Kaizen Events • Kaizen events enable project teams to quickly drive improvement in all areas of the business. • Kaizen events can obtain significant and measurable results in just a short amount of time • Kaizen events involve the knowledge and experience of all associates to drive excellence • Kaizen tools learned in these events are applicable across the enterprise Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Typical Results from Kaizen Events • • • • Reduced Distance Traveled - 30-40% Less Indirect Labor Hours Labor Productivity 25-30% Improved Ergonomics • • • Less Rework and Scrap Less Inventory 50-60% Increased throughput • • Overtime Reduction Reduced Warranty Costs Kaizen is Action & Results Oriented! Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Common Tools Deployed in Kaizen Two Most Common Tools are 5S and Standard Work 5S A visual management technique/tool used to establish and maintain a workplace focused on organization and quality. Standard Work A tool that defines the interaction between a person and a process. Standard Work defines the sequence and content of work to be performed to achieve the optimal process. Sort Set Shine Standardize Sustain Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 5S Basics • 5S is a set of 5 necessary disciplines for successful Lean Operations – Sort (Organization) – Set (Orderliness) – Shine (Cleanliness) – Standardize (Neatness) – Sustain (Conduct / Discipline / Motivate) • 5S disciplines are prerequisites for any improvement program • The 5S Philosophy focuses on effective work place organization, simplifies the work environment, and reduces waste, while improving quality and safety Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Standard Operation • A Standard Operation is the ideal arrangement of: • • • • • The work of people performing the process Materials, forms, spreadsheets used Processing equipment and tools Methods to provide a safe environment A Standard Operation consists of: • Takt Time--the rate of customer demand • Work Sequence--the order of actions that a worker must perform within a given cycle time • Standard Work-In-Process (SWIP) -- the minimum inventory required to complete the work sequence Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 DMAICL Project Methodology Define Measure Analyze Improve Control Leverage • Utilized by BBs and GBs on complex projects. • Achieves breakthrough performance. • Focuses on “real problems” directly related to customer satisfaction and the “bottom line.” • Many tools and techniques – requires statistics • Sustains improvement… makes it „stick‟ • Share best practices company wide. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 DMAICL Project Roles Role Green Belt Black Belt Master Black Belt Champion Responsibility • Lead moderately complex DMAICL projects • Projects generally in natural work area • Deliver financial results • Lead complex DMAICL projects • Train and mentor Green Belts • Deliver financial results •Train and mentor Black Belts • Drive sector LSS initiatives • Develop LSS training materials • Selects projects and writes charters • Provides project team members • Breaks down barriers • Ultimate project owner with accountability Ver. 1.0 Training 2 Weeks 4 Weeks 6 Weeks 2 Days Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Results Project Y Examples Cycle Time Quality Cost Delivery Time Baseline Period Kaizen & DMAICL End of Project USL Y Project Life Cycle Your Project Goal… Move The “Y” Question: How Should The “Y” Move ? Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Sustainment Methods LSS Provides Multiple Methods of Sustainment TYPES OF SUSTAINMENT Standard Work LSS Boards 5-Star Audit Process SPC Process Control Plans RESULTS WITHOUT SUSTAINMENT TIME Without sustainment, processes typically revert to pre-improvement state. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Summary Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 2. Lean Six Sigma __________________________. a) is a systematic approach. b) maximizes employee involvement. c) focuses on eliminating waste. d) all the above. d) all the above. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 3. Who defines value for the company’s products and services? a) Management b) Customers c) Engineers d) None of the above b) Customers Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 4. Which is never considered a waste? a) Transportation b) Employees c) Unused Creativity d) Waiting b) Employees Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 5. Which waste is a key Lean Six Sigma indicator? a) Inventory b) Transportation c) Defects d) Overprocessing a) Inventory Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 6. Which of the following concepts are prerequisites of a flow/pull system? a) Quality at the source (Zero defects) b) Good housekeeping (5S) c) Waste elimination d) All the above d) All the above Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 7. Which type of projects are included in Ingersoll Rand’s Lean Six Sigma toolkit? a) Black Belt Projects b) Kaizen Events c) Green Belt Projects d) All the above d) All the above Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Review Questions 8. Who gets involved in Kaizen Events? a) Engineers b) Everyone c) Black Belts d) Champions b) Everyone Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07 Lean Six Sigma Summary • The key philosophy of Lean Six Sigma is variation and waste reduction. • Lean Six Sigma has five principles: • Value • Value Stream • Flow/Pull • Empowerment • Perfection • Everyone at the company will be engaged in Lean Six Sigma activity through Kaizen Events. Ver. 1.0 Owned by BOS Program Office, Last edited: 3/5/07