What is Lean Six Sigma

What is Lean Six Sigma? The origins of Lean and Six Sigma, 2. What makes Lean Six Sigma effective, 3. How organizations are implementing it, 1. 4. Tedd Snyder www.albanyanalytical.com tsnyder@albanyanalytical.com Some keys to success. MAQIN Lean and Six Sigma BB February 22, 2006 My Background Education: B.S.I.E.- UW-Madison, M.B.A.-Rensselaer Polytechnic Institute More Education: Dr’s Deming, Juran, Kano, Kondo, Wheeler, Box, Joiner, and Ermer Experience: Florida Power & Light-Japanese TQC, Deming Prize American Family - Deming Approach Wisconsin MEP – Lean The George Group – Lean Six Sigma WFA – Performance Excellence ASQ Certified Quality Engineer - 1991 FPL Statistical Application Expert (Black Belt) -1991 Certifications: What is Lean Six Sigma? History of Lean Production and Six Sigma Tedd Snyder www.albanyanalytical.com tsnyder@albanyanalytical.com MAQIN Lean and Six Sigma BB February 22, 2006 Where did Lean Production come from?  Which company do many people credit with mastering Lean Production?  Where did they learn about Lean Production? Henry Ford Driven by Return on Capital (ROIC) and Low Cost “The time element in manufacturing stretches from the moment raw material is separated from the earth to the moment when finished product is delivered to the ultimate consumer. Ordinarily, money put into inventory is thought of as live money,...but it is waste – which like every other form of waste, turns up in high prices. We “Our production cycle is 33 hoursdo not own or use a single warehouse! from iron ore to an automobile, compared to 12 days which we thought record breaking.” Time waste differs from material waste because there can be no salvage.” Sakichi Toyoda-The father of Toyota 1894 - Sakichi Toyoda, a tinkerer and inventor, begins making manual weaving looms in Japan.  1926 – Mr. Toyoda opens Toyoda Automatic Loom Works. He later invents looms that stop automatically when thread breaks (mistakeproofing). Kiichiro Toyoda opens Toyota Motor Company in 1937. “Unless we establish a method far superior to Ford’s, we will never beat Ford." Taiichi Ohno (Toyota, 1950-1990) Father of the Toyota Production System  Created Toyota Production System (TPS) in about 1950. TPS is the origin of Just-In-Time and Lean Production movements in U.S. and around the world. Basics of Lean (Muda, Mura, Muri) Focused on eliminating waste (Muda): 1. Transportation (moving material/product/information from one place to another) 2. Inventory (material/product/information waiting to be processed) 3. Motion (excess movement and/or poor ergonomics) 4. Waiting (delays caused by shortages, approvals, downtime) 5. Overproduction (producing more than is needed) 6. Overprocessing (adding more value than the customer is paying for) 7. Defects/Rework (making, finding, and correcting mistakes)  Another waste is: People (untapped, under utilized and/or misused resources) Also focuses on removing Uneveness (Mura) and Overexertion (Muri) Lean Tools and Techniques  Standard Work-How, How long, How much WIP Value Analysis Value stream mapping for opportunity identification 5S housekeeping to improve productivity and develop a “disciplined approach” Pull Systems to increase speed and flexibility Rapid Changeover for flexibility and responsiveness    Work flow/layout improvement to reduce non-value add transportation Process Balancing to identify time traps, balance workloads, and increase throughput Mistake-Proofing to eliminate rework through mistake-proofing (defect detection and prevention) Queue Reduction for productivity improvement       5S (Seiri, Seiton, Seiso, Seiketsu, Shitsuke) Sort Set in Order Shine Standardize Sustain Where did Six Sigma come from?  Which company made Six Sigma famous?  What company created Six Sigma? What Is Six Sigma?  The term “Sigma” is a Greek letter (σ) used in statistics to describe variability. Centered Normal Distribution +/-6 Sigma Limits LSL Normal Distribution Centered USL Effects of 1.5 Standard Deviation Shift LSL Normal Distribution Shifted USL -6σ -3σ -2σ -1σ x Percent 68.27 95.45 99.73 99.9937 99.999943 99.9999998 +1σ +2σ +3σ Defect. PPM 317,300 45,500 2,700 63 0.57 0.002 +6σ -6σ Spec Limit +/-1 sigma +/-2 sigma +/-3 sigma +/-4 sigma +/-5 sigma +/-6 sigma -3σ -2σ -1σ x +1σ +2σ +3σ Percent 30.23 69.13 93.32 99.3790 99.97670 99.9996600 Defect. PPM 697,700 308,700 66,810 6,210 233 3.4 +6σ Spec Limit +/-1 sigma +/-2 sigma +/-3 sigma +/-4 sigma +/-5 sigma +/-6 sigma  Sigma Quality Level is an indicator of how often defects are likely to occur (Six Sigma Quality Level is said to equate to 3.4 PPM defective). How Complex Are Your Products and Services? (% Shippable without Rework) # of Parts or Steps 1 2 3 4 5 10 30 50 100 300 500 1,000 3,000 5,000 10,000 ±3σ ±4σ (Cp=1.00)* (Cp=1.33)* 93.32% 99.38% 87.08% 98.76% 81.27% 98.15% 75.84% 97.54% 70.77% 96.93% 50.09% 93.96% 12.56% 82.96% 3.15% 73.24% 0.10% 53.64% 15.43% 4.44% 0.20% ±5σ (Cp=1.67)* 99.98% 99.95% 99.93% 99.91% 99.88% 99.77% 99.30% 98.84% 97.70% 93.26% 89.02% 79.24% 49.75% 31.24% 9.76% ±6σ (Cp=2.00)* 99.9997% 99.9993% 99.9990% 99.9986% 99.9983% 99.9966% 99.9898% 99.9830% 99.9660% 99.8980% 99.8301% 99.6605% 98.9849% 98.3140% 96.6564% * Distribution shifted by 1.5σ In Six Sigma, Costs Are Always Kept in Mind  There is an optimum quality level beyond which the costs of quality improvement exceed the expected cost savings from a reduced number of defects. Impact of Quality Level on Cost Cost Optimum Sigma Quality Level Six Sigma History  Nobody at GE gets promoted without Six Sigma training.  GE annual reports states that Six Sigma delivered:   $300 million to its operating income in 1997 $750 million to the bottom line in 1998 10-fold increase in life of CT scanner x-ray tubes Improved yields of super-abrasives – worth a full decade of increased capacity despite growing demands 62% reduction in turn-around time of railcar leasing repairs Plastics business added 300 million pounds of new capacity – equivalent to “one free plant”  Additional annual report examples:     What is Lean Six Sigma What makes Lean Six Sigma so effective? Tedd Snyder www.albanyanalytical.com tsnyder@albanyanalytical.com MAQIN Lean and Six Sigma BB February 22, 2006 The marriage of Lean and 6 Sigma One lens to look for waste and another to look for variation allows us to increase speed and reduce “defects.” These improvements interact to further increase customer satisfaction. D-M-A-I-C - a structured approach to problem solving/process analysis  Define the Problem and its impact on the Organization  Measure the Current Performance  Analyze the Performance to identify Causes of this Performance  Improve the Problem by attacking its Causes  Control the Improved Process to Maintain the Gains. Infrastructure- Belts, Sponsors, Champions  A Black Belt is:      A Sponsor is:      Project Manager Team Leader Problem Solver Statistical Whiz  Like a martial arts black belt they are elegant. They use the minimum force to achieve their objective.  Green Belts are part time. They use the many of the same skills but have a smaller toolbox than Black Belts and thus smaller projects. the owner of the project supportive of the team’s needs the decision maker at Gate Reviews regularly updated by the Belt a coach  A Champion   Leads department performance improvement Prioritizes projects Kaizen Events or “Blitzes” effect rapid impact/changes and create “a bias for action” Mon, Sep 9 7:00 AM 7:30 AM 8:00 AM 8:30 AM 9:00 AM 9:30 AM 10:00 AM 10:30 AM 11:00 AM 11:30 AM 12:00 PM 12:30 PM 1:00 PM 1:30 PM 2:00 PM 2:30 PM 3:00 PM 3:30 PM 4:00 PM 4:30 PM 5:00 PM 5:30 PM Tue, Sep 10 Wed, Sep 11 Thu, Sep 12 Fri, Sep 13 Review plan for the day Review plan for the day Review plan for the day Review plan for the day Area Observations Brainsorm Solutions Guest Speaker, Intro & Training Area Observations Lunch & status review Problems seen Fishbone diagram Lunch & status review Affinitize list of possible solutions Complete Effort / Impact Matrix Assign Action Items Begin Implementation Capture observations & ideas Status review & updates Status review & updates Status review & updates Time to go home Time to go home Time to go home Lunch & status review Lunch & status review Presentation & Questions Continue implementation Prepare presentation Continue implementation Continue implementation Prepare presentation Lunch Define & assign roles Area Discovery Area Discovery Cause & effect 6:00 PM Time to go home Following the process…  Project Identification and prioritization  Creating a project hopper  Project Scoping  Four months seems to be key  Don’t have to fix entire problem, but make it better  Focused, disciplined execution of DMAIC  Little’s Law says to use full time BB’s so you can get to the money faster (kaizen events vs traditional projects)  Trust the process but only use tools as needed  Gate Reviews  Keeps the team on track  Keeps the stakeholders committed  Control and Replication But its not just the process, it’s the people.  Like Sakichi Toyoda, be a tinkerer and inventor:         Passion for improvement Curious Patient Practical Analytical Creative Bias for action Learns from the world around him/her What is Lean Six Sigma How to Implement Tedd Snyder www.albanyanalytical.com tsnyder@albanyanalytical.com MAQIN Lean and Six Sigma BB February 22, 2006 Broad Based Program  Create Burning Platform  Leadership work     Commit, Communicate, Care for  Project identification and Prioritization Train Black Belts and Sponsors Coach Black Belts and Sponsors Show me the money More training and coaching (Black, Green, others)  Project Based Implementation       Leadership education and commitment Project Selection Project Initiation Workshops (Define/Measure) BB Coaching and Mentoring Show me the money Replicate and Grow What is Lean Six Sigma? Some Keys to Success Tedd Snyder www.albanyanalytical.com tsnyder@albanyanalytical.com MAQIN Lean and Six Sigma BB February 22, 2006 Lesson Learned #1  Inventor Charles Kettering said “A problem well defined is a problem half solved.”  It helps to think of the Belt as a well paid consultant brought in to solve a problem. Would you bring the consultant in before you had clearly defined the problem you wanted them to solve? Lesson Learned #2  You may not be able to eat the elephant in one bite.  One of the keys to scoping a project is to make it executable. It’s often better to scope a project to look at one location and then replicate what is applicable rather than seeking a global solution.  The whole gap in performance may not be closeable with just one project. Americans are bad at this. We see problems to be “fixed” not processes to be made better. Lesson Learned #3  There is an improvement hierarchy:       Just Do it Workout (Just Do It in a group) Kaizen Event Green Belt Project Black Belt DMAIC Project Black Belt DMEDI Project Lesson Learned #4 Not every “Project” is a DMAIC/DMEDI project. Cause Known Unknown Complex Issues Do “I” and “C” Simple Issues “Just do it” Unknown DMAIC Issues Use DMAIC Be Careful Issues Ask “What cause does this solution address?” Solution Known But make sure that your REALLY know. Lesson Learned #5 You don’t need to be a statistician to be a successful Black or Green Belt. First think practically, then graphically, then statistically. Over 90% of problems can be solved without advanced statistical methods. Lesson Learned # 6  The best question a Sponsor can ask is… “How do you know?”  The best answer that a Belt can give is… “The data shows…” Lesson Learned #7 The soft stuff is the hard stuff  Well more than half a Black Belt’s time is spent dealing with the people/organizational issues, and not learning about DMAIC or problem solving tools. In Closing… “We place the highest value on actual implementation and taking action.” Fujio Cho President, Toyota Motor Corporation 2002 Questions ???? Practice  Treat TIM WOOD like Waldo. Find him!  Try 5S on your office, work area, or computer        (desktop or email). Try the Ohno Circle. Observe something deeply. Translate an idea into action. Find something needing improvement and improve it. Try using DMAIC (with data) on a simple problem. Ask yourself “How do you know?” Plan a simple project (hours/days), and execute it as planned, learn from the experience. Learn or remember basic statistics…..OR For Further Learning  The Toyota Way by Jeffrey K. Liker  The Toyota Way Fieldbook by Jeffery K. Liker and     David Meier What Is Lean Six Sigma by Michael George, David Rowlands, Bill Kastle Lean Six Sigma by Michael George Lean Six Sigma for Service: How to Use Lean Speed and Six Sigma Quality to Improve Services and Transactions by Michael George The Lean Six Sigma Pocket Toolbook: A Quick Reference Guide to 70 Tools for Improving Quality and Speed by Michael George, John Maxey, David Rowlands, Mark Price For more in depth learning  Join the MAQIN Lean Six Sigma Special Interest Group. We meet every other month on the third Wednesday. Topic: Project Management Presenter: Dennis Verstegen Verstegen and Associates When: Wednesday, March 15th, 3:30-5:30 Where: MAQIN Training Room Contact Dave Prins (dprins@execpc.com) for information on their next meeting.  Join the Best Practices Network of SE Wisconsin.