Lean Six Sigma DMAIC Approach

Lean Six Sigma Lean Six Sigma DMAIC Approach Copyright 2005, AIT Group Inc. All rights reserved. 1 High Level DMAIC Approach Define • When did it happen? • Where did it happen? • What is the success criteria? Lean Six Sigma Measure • How often does this happen? • What trends have we observed relative to the target? NEM Baseline (IMR) • Is the process capable? • Do we want to reduce variation? • Do we want to shift the mean? Process Capability • What changes have been made to the process? • What possible variables relate to the change ? Process Mapping • What does the process look like? • What does the process look like from the product’s view? • Is the measurement process capable? • Is the test a destructive test? Measurement System Analysis Analyze • What is the subgrouping strategy? Improve • What does the DOE process plan look like? •What responses are we interested in (Average, Range)? • What variables do we want to optimize? Why? • How will we address Org. issues? • How will we address Behavioral issues? Control Preliminary Data Analysis Advanced NEM (XbarR) • What variables are contributing to mean shifts? • What variables are contributing to variation? Classification Of Control Issues • What variables do we need to control? • What control methods will be used to ensure gains are sustained? Control Methods •Who is responsible for implementing the control? •Who is accountable for the process results? • Where in the process do we need to scope efforts? • What is the target value? • What are the specs? DOE Planning Template • What observations did we have during the experiment? • What roles need to be established to run the DOE? DOE Execution SIPOC Components Of Variation / ANOVA • What is causing failure? • What is the impact of failure? • How do we mitigate the risk of failure? • How much waste is in this process? • What is our value added percentage? FMEA Operator & Product Activity Analysis • What variables are critical to the process? • How should the critical variables be set? Value Stream Mapping DOE Analysis & Results Control Plan Copyright 2005, AIT Group Inc. All rights reserved. 2 Funnel-Down Many Variables to the Critical Few! x x x xxx x xx x x x x x x x x x x x xx x x x x x x x x x x x x x x x x x xx x x x x x x x x x x x x xx x x x xx xx Improve VELOCITY OPPORTUNITY (Reduce Waste) Value Stream Mapping Product Families Product Flow Analysis Employee Activity Analysis Set-up Reduction VARIATION OPPORTUNITY (Reduce Variation) Thought Map TMAP SIPOC Detailed Process Map PMAP Lean Six Sigma Define Measure Failure Modes Analysis FMEA Measurement System MSE Numerical Evaluation of Metrics (NEM) Analyze Material Replenishment Improvement Considerations Workplace Design 5S Implementation T-Test, Chi Square, ANOVA, COV Design of Experiments DOE Regression Analysis Control xx x x Control Strategies Standard Work Performance Metrics Mistake Proofing Y=f(x) Copyright 2005, AIT Group Inc. All rights reserved. 3 Define Project Charter Measure Analyze Lean Six Sigma Numerical Evaluation of Metrics How is the process performing today? Measurement System Evaluation Hypothesis Testing ChiSquare Gender What variables are causing variation? ANOVA One-way ANOVA: Total No Errors versus Hiring Location (Site) Source Hiring Loc Error Total DF 3 117 120 SS 2.12 269.95 272.07 MS 0.71 2.31 F 0.31 P 0.821 S = 1.519 R-Sq = 0.78% R-Sq(adj) = 0.00% Boxplot of Total No Errors by Hiring Location (Site) 10 8 Total No Errors Project Justification Product Line Brackets Wheels Closures Shafts Separated Operations Seals Other Products Sales $ (YTD) $ 70.3 Million $ 60 Million Gross Margins $ 2.8 M / 39% $ 2.3 M / 38% $ 1 M / 33% $ 1 M / 40% Production Volumes 80 Million 94 Million 15 Million 5.4 Million 1.3 Million 4.5 Million 9.3 Million $ 31.1 Million $ 21.5 Million $ 1.7 Million $ 5 Million $ 4 Million Thought Map Problem Resolution Methodology Define Baseline Process T-Test Weekly vs. Quarterly Grant Date 1/1/02 – 12/31/03 Two-Sample T-Test and CI: Weekly, Quarterly Weekly Quarterly N 105 8 Mean 55.41 55.50 StDev 8.63 8.21 SE Mean 0.84 2.9 Estimate for difference: -0.089083 95% CI for difference: (-7.056468, 6.878301) T-Test of difference = 0 (vs not =): T-Value = -0.03 P-Value = 0.977 DF = 8 $ $ Process $ 0.3 M / 19% $ 0.7 M / 7% Market Comments High vol -Growing Cylindrical High vol. Growing Autom. Large Diameter Old Equip. Hydraulic Small batches High Labour Old equip. Automotive 6Project Phases Establish Project Scope Characterize Processes Measure ID Process Failure Modes Evaluate Measurement Systems ID Critical Variables Analyze $ 0.3 M / 17% Improve Implement Process Improvements What is my project strategy? Data Integrity ? 6 Hiring location is not a significant contributing factor to errors! XW = 55.41 XQ = 55.50 4 Conclusions: ˆ  W = 5.63 ˆ  Q = 8.21 There is no significant difference between weekly and quarterly grant dates. 2 0 Field Sales TO Hiring Location (Site) TO - RML Control Control/Maintain Process Improvements SIPOC Process Name: Process Owner: Suppliers (Providers of the required resources) Process Map Outputs (Deliverables from the process) Copper Tolling Eric Sandford Inputs (Resources required by the process) Customers (Stakeholders who place the requirements on the outputs) Product Portfolio Plan Business Plan Failure Modes and Effects Analysis: Quote Failure Modes & Effects Analysis Failure Mode (Describe what could go wrong.) (Top level description of the activity) Requirements Copper Manager Orders quantity from Delphi plants to merchant Quantity per merchant. Delivered/Timing Requirements received f rom Delphi Plants Requirements Copper delivered to suppliers for transformation Identify Product Portfolio Plans Determine Business Opportunities Customer Directed? Yes Business Pursued? No Yes Proceed With Sourcing C Profit Margin C Costs to Do Part/process No Quote Letter to Ford Failure Effects (How does the failure affect the function of the step?) Cathode delivered on time, quantity, Fabrication Suppliers right brand, and quality Delphi accounting purchasing Index used, timing & quantity's delivered & reported. Forecast from D Plants (Customer) Accuracy Copper Tolling Level & Stable N! Customer Directed Business N Vehicle Volume S CI0 (Budget, Resources) N Vehicle Timing No S PI (Budget, Resources) N Content N! ‘In Your Head’ N Ford Goals & Objectives N Personalities/Relationships S Opportunity Screener (Budget, Resources) C Customer Strategy/Portfolio C Divisional Strategies S Divisional Processes N Divisional Intelligence Apply S Divisional Quoting Philosophy Business (What is the function of each step?) S E V Causes (What is the root cause reason for the failure?) O C C Controls (What controls are currently in place to catch or prevent this failure?) D R E P T N Actions (What actions are being done to eliminate the cause?) No Quote C Doesn’t Fit Divisional Product Strategy C Doesn’t Fit Pursuit Plan C Poor Business Case Delphi Plants PC&L Lessons Learned No Yes Pursued? Execute Divisional Strategic Analysis Forecast Strategy Issue Invoice Invoice is incorrect Customer has dispute with invoice Slow response by business unit Lack of funds budgeted for payment Customer disputes invoice delaying payment (40 days) Delay in payment due to invoice dispute (40 days) Delay in payment due to dispute (40 days) Delay in payment process (30 days) 5 Price, Quantity or Work-scope does not agree with quote Miscommunication between ATL and Billing Heavy workload creating conflicting priorities Limited budget allocation for weekly payments 4 Pricing database 8 4 0 Need to study dispute issues for reduction in disputes, Focus on Price Strengthen ATL communication with Billing by incentivised roles Merchants supply quotes Delphi legal risk management (t.o), purchasing Buyer and receipt clerk Global sourcing quotes Bailment contract Selection of merchants based on Risk protection When fabricated product is paid VOC Payment to fabrication supplier Per terms correct + amount Inventory accounting and costs + C Budget Disconnects C Resource Disconnects C Poor Documentation Continuous Improvement N! Relationships N! Strategic Importance N ROLR (Right of Last Refusal) C Red Flags C Strengths C Divisional Product Strategy C Pursuit Plan Shared Information Level Knowledge Base Leveraged Synergies Critical X’s Review and confirm invoices Dispute resolution & reissue Approve payment 5 3 None 7 5 5 Note: Not part of strategic analysis for selling process Info Shared Between Divisions? Unified Front to Customer Strategic Analysis for Selling (comparison & synergies applied) Divisional Intelligence & Lessons Learned (comparison & synergies applied) Philosophy of Quoting Techniques (comparison & synergies applied) Yes Identify Relationship Broker -or-Share Knowledge C Tech Shows C Customer Contact Calls C Influence Peddling C! Divisional Strategic Analysis 5 3 None Accounts payable policy 7 5 5 6 5 0 Reduce disputes to alleviate workload Work with Customer to increase budget allocation for payments Dacor invoices, plant receipts, fabrication buyer P.O. 's Accurate 4 3 No Delphi cost accounting Supplier cost accounting P.O. price entry Platts Delphi inventory records Inventory Reconciliation Accurate quantity's and value Delphi Fabrication Suppliers What is the project scope? P.O. price and market index, quantity Accurate Payment to merchant = All-In Costs Per terms correct amount Merchants Key: ! - Critical N - Noise S - Standard Operating Procedure C - Controllable Complete Delphi Selling Strategy C Linked Divisional Strategic Analysis C! Unlinked Divisional Strategic Analysis Actions for improvement and next focus area identified • ATL’s compensation will be dependent on customer satisfaction scores to provide incentive for improved communication What does the process look like? • Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold • Need to further study source of disputes to resolve disputes How do we mitigate process risk? Product Families Value Stream Map Where should we focus? PC & L 4 week rolling foreca st 6 week rolling foreca st Supplier Weekly Orde r Weekly Orde r Daily Ship Schedule Custome r r/ Distributo r Demand/wee k: Part A = 50 500 Weekly Build Schedule Part B = 120 1200 Part C = 70 700 Process Flow & Employee Activity Analysis AREA NAME: SUPERVI OR: S NOTE: Depict rough scale o ff equip ment layout; a nd, dra w a point to poi nt diagr am of t he com plete pr oduct flow scale o equip ment layout; a nd, dra w a point he com plete pr oduct flow BEFORE - Car rier Asse mbly - Ball Bearings PREPAR ED BY: DATE: 40 The Seven Wastes D - Defective Production Bench Tool Box 13 26 14 22 8 24 2 4 9 3018 12 16 20 44 34 38 42 32 6 OVEN 35 33 31 21 Press 2x/ week 2x/ day 23 39 Trash 10 O - Over Production T - Transportation W - Waiting I - Inventory M - Motion P - Processing 19 Anneal Pickle Draw Straightening Point/Chamfe r Shipping Vice 28 36 41 Part 15 Box17 I 60 coils Where is the waste occurrin Copyright 2005, AIT Group Inc. All rights reserved. g? 6 coils 20 coils 3000 I pcs 29 25 3 37 27 1 11 5 43 7 Takt = 240 min C.T. = 200 mi n D.T. = 0.5% Takt = 240 min C.T. = 200 mi n D.T. = 1% Takt = 19 min C.T. = 15 min D.T. = 4% FTQ = 99% Takt = 20 sec C.T. = 20.4 sec D.T. = 3.1% FTQ = 99% Takt = 20 sec C.T. = 10 sec D.T. = 1% FTQ = 100% Lot Size = FTQ = 100% FTQ = 100% Lot Size = C/O Ti me = 3 0 m C/O Ti me = 1 0 min Lot Size = # of Shifts = 2 WIP = 4 coils C/O Ti me = 3 0 min Lot Size = # of Shifts = 2 WIP = 8 coils 1 C/O Ti me = 1 hr Lot Size = # of Shifts = 2 WIP = 1500 C/O Ti me = 1 5 min Parts Rack # of Shifts = 2 WIP = 3 coils # of Shifts = 2 WIP = 100 pc pcs Copyright 2005, AIT Group Inc. All rights reserved. 4 Improve Design of Experiments Design of Experiments: Price Variance = f(OTD, Sp Price, LT, Profile) Control Control Strategies Type of Control (Fix, Minimize, Standardize, Measure & Monitor, Communicate, Audit) Detailed Description of Control Facility Affected (Gas, Electric, Water) Setting or Tolerance Prior to Controls Control Set Point or Range All computers with screen savers Personal Business Plan and Six Month Reviews Lean Six Sigma Management Requirements or Organizational Changes Communicated at DRL meeting, part of security audit Date Implemented or Projected to be Implemented Responsible Individual Jacovides, Director Steve, Security Fix, Communicate, Audit Install or enable screen savers on all computers Establish a Facilities Coordinator to be responsible for DRL facilities needs Electric Random implementation April, 2002 ANOVA: Factor Customer Profile Special Price Lead Time On-Time Delivery Type fixed fixed fixed fixed Levels 2 2 2 2 Values Tier 1 Tier 2 N Y Post LT Prior LT N Y Standardize, Audit Gas, Electric, Water No individual responsible Change in job description, PBP's May, 2002 John Biafora Fix, Measure Reduce water flow through SEM by replumbing and installing chiller Water 5 gal/ min, continuous 0 gal /min Authorize chiller repair June, 2002 John Biafora, Chris Thrush Fix, Measure Reduce water flow through vacuum chamber Water 2 gal/min, continuous 1 gal/min, as needed Temperature control, now flow only when using instrument Authorize replumb June, 2002 John Biafora, Chris Thrush Fix, Measure, Communicate Thermostat control of outgoing water on MTS unit Water 2.4 gal/min, continuous Authorize purchase of temperature sensor June, 2002 John Biafora, Tom Ellis Fix, Measure Reduce flow through Hall Effect system Water 4 gal/min, continuous 2.5 gal/min, unit on only Authorize replumb, communicate need when doing measurements to have flow only during usage June, 2002 John Biafora, Joseph Heremans Source Customer Profile Special Price Lead Time On-Time Delivery Error Total DF 1 1 1 1 11 15 SS MS 473 473 40905 40905 13053 13053 75488 75488 130267 11842 260186 F 0.04 3.45 1.10 6.37 P 0.845 0.090 0.316 0.028 Fix, Measure Reduce flow through e-beam evaporator Water 8 gal/min, continuous 6 gal/min Authorize replumb June, 2002 John Biafora, Chris Thrush Regression Fix, Measure Reduce flow through environmental test chamber Water 4 gal/min, continuous 3 gal/min, flow only during testing 94 k ft^3/min 36% of total time Authorize replumb June, 2002 John Biafora, Tom Ellis John Biafora, all lab users John Biafora, Fred Scott Fix, Measure, Communicate Manual operation of exhaust hoods Gas, Electric 94 k ft^3/min continuous Random excursions in temperature Placard June-July, 2002 Fix, Measure, Communicate Adjust pre temperature air box per season Gas, Electric 65 - 72 F Authorize facilities study June-July, 2002 Special Pricing and On-Time Delivery are Significant Sources of Price Variation in the Co-Op System Fix, Standardize, Communicate Turn off unused equipment at 7:00 PM Gas, Electric, Water None Turn off specific exhaust and return air systems that do not jeopardize safety requirements Lab Director authorize and communicate at group meeting May, 2002 John Biafora and Jones Lange and LaSalle representative John Biafora and Jones Lange and LaSalle representative Standardize, Monitor, Measure Program controls of specific exhaust and return air units that can be shutdown from 6:00 p.m. to 6:00 a.m. Mon. - Fri. Gas, Electric None Shutdown specific exhaust and return air units from 6:00 p.m. to 6:00 a.m. Lab Director authorize June-July, 2002 Fix, Standardize, Audit, Measure & Monitor Curtail all non-essential power usage during peak electrical draw from the grid. Credit from electric supplier. Electric None Call from Detroit Edison to implement power curtailment Lab Director authorize and communicate at group meeting July-August, 2002 John Biafora How do we optimize critical inputs? How do we sustain the gains? Standard Work Standard Job Sheet Part N umber Part D escri pti on Part F amil y Dat e: Revisi on: B 2400172 -1 Impell ar Casti ngs Cell or Process Design/To-Be Work Flow 15s 200s 350s 62s 401s 245s Oper ator 1 Oper ator 2 Oper ator 3 190s 25s 33s 161s 191s Qualit y Chec k Safet y St andard Wor k Takt T ime in Proc ess 600s Lead Ti me Number of Operat ors 3 Measure & Monitor Liner Web Break Downtime (min) by Month 98 99 Moving Range What does the future work flow look like? 1000 Individual Value Material Replenishment 500 1 0 Subgroup Month 3.0SL=253.4 X=167.4 -3.0SL=81.44 0 10 10/98 20 99 600 500 400 300 200 100 0 3.0SL=105.6 R=32.33 -3.0SL=0.00E+00 Have we met our goals? Copyright 2005, AIT Group Inc. All rights reserved. Copyright 2005, AIT Group Inc. All rights reserved. 5 Author Lean Six Sigma Steven Bonacorsi is a Senior Master Black Belt instructor and coach. He has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies. Steven is a board member for the Boston Chapter of the Industry of Industrial Engineers. Full Bio: http://www.linkedin.com/in/stevenbonacorsi Lean Six Sigma White Belt Certification: • Add Lean Six Sigma White Belt (Basic Awareness) Training and Certification to your Resume or Job Skills. • Learn topics from one of the original Master Black Belts and world experts on Value Stream Mapping, 5s, Process Capability, Deployment Planning, Roles and Responsibilities, FMEA Risk Analysis, Control Plans and more. • Certificates will be signed for all who complete the 2 hour training session. Copyright 2005, AIT Group Inc. All rights reserved. 6 Learn More about The AIT Group http://www.theaitgroup.com Lean Six Sigma Copyright 2005, AIT Group Inc. All rights reserved. 7 Who is AIT? • AIT is a premier provider of Lean, Six Sigma and Supply Chain solutions. • Solutions are customized to the customer – not one size fits all. • The company was started in 1998 by three individual that recognized extremely early in the industry how well Lean, Six Sigma and Supply Chain disciplines integrate. • Our goal is the complete transfer of knowledge via client specific solutions – not training. • Your instructors from AIT are Certified Master Black Belts and Lean Experts. • We have worked with many different clients and some of the largest companies in the world. • We have Offices in the US, Europe, Mexico and China. Lean Six Sigma The AIT Group is an international consulting firm that has been specifically designed to help companies increase profitability by improving overall business performance and customer satisfaction through the integrated application of: Lean Supply Chain Mgmt. Value $ Six Sigma www.theAITgroup.com The AIT Group excels in implementation … not recommendation! Copyright 2005, AIT Group Inc. All rights reserved. 8