Define Phase Elements of Waste Now we will continue in the Define Phase with “Elements of Waste”.

Elements of Waste Understanding Six Sigma Six Sigma Fundamentals 7 Components of Waste 5S Understanding Six Sigma Selecting Projects Elements of Waste Six Sigma Fundamentals Wrap Up & Action Items The core fundamentals of this phase are the 7 Components of Waste and 5S.

Definition of Lean “Lean Enterprise is based on the premise that anywhere work is being done, waste is being generated. The Lean Enterprise seeks to organize its processes to the optimum level, through the continual focus on the identification and elimination of waste.” -- Barbara Wheat Please read the slide.

Lean – History Lean Manufacturing has been going on for a very long time, however the phrase is credited to James Womac in 1990. A small list of accomplishments are noted in the slide above primarily focused on higher volume manufacturing.

Strength: Effectiveness An Extremely Powerful Combination! Lean Six Sigma Lean Six Sigma combines the strengths of each system: Lean Guiding principles based operating system Relentless elimination of all waste Creation of process flow and demand pull Resource optimization Simple and visual Strength: Efficiency Six Sigma Focus on voice of the customer Data and fact based decision making Variation reduction to near perfection levels Analytical and statistical rigor Strength: Effectiveness The essence of Lean is to concentrate effort on removing waste while improving process flow to achieve speed and agility at lower cost. The focus of Lean is to increase the percentage of value-added work performed by a company. Lean recognizes that most businesses spend a relatively small portion of their energies on the true delivery of value to a customer. While all companies are busy, it is estimated for some companies that as little as 10% of their time is spent on value-added work, meaning as much as 90% of time is allocated to non value-added activities, or waste. Forms of waste include: Wasted capital (inventory), wasted material (scrap), wasted time (cycle time), wasted human effort (inefficiency, rework) and wasted energy (energy inefficiency). Lean is a prescriptive methodology for relatively fast improvements across a variety of processes, from administrative to manufacturing applications. Lean enables your company to identify waste where it exists. It also provides the tools to make improvements on the spot. Lean focuses on what calls the Value Stream, the sequence of activities and work required to produce a product or to provide a service. It is similar to a linear process flow map, but it contains its own unique symbols and data. The Lean method is based on understanding how the Value Stream is organized, how work is performed, which work is value added vs. non-value added, and what happens to products and services and information as they flow through the Value Stream. Lean identifies and eliminates the barriers to efficient flow through simple, effective tools. Lean removes many forms of waste so that Six Sigma can focus on eliminating variability. Variation leads to defects, which is a major source of waste. Six Sigma is a method to make processes more capable through the reduction of variation. Thus the symbiotic relationship between the two methodologies. An Extremely Powerful Combination!

Project Requirements for Lean Perhaps one of the most criminal employee performance issues in today’s organizations is generated not by a desire to cheat one’s employer but rather by a lack of regard to waste. In every work environment there are multiple opportunities for reducing the non-value added activities that have (over time) become an ingrained part of the standard operating procedure. These non-value added activities have become so ingrained in our process that they are no longer recognized for what they are, WASTE. waste (v.) Anything other than the minimum amount of time, material, people, space, energy, etc needed to add value to the product or service you are providing. The Japanese word for waste is muda. Employees at some level have been de-sensitized to waste: “That’s what we’ve always done.” Lean brings these opportunities for savings back into focus with specific approaches to finding and eliminating waste. Get that stuff outta here!

Seven Components of Waste Muda is classified into seven components: Overproduction Correction (defects) Inventory Motion Overprocessing Conveyance Waiting Sometimes additional forms of muda are added: Under use of talent Lack of safety Please read the slide. Being Lean means eliminating waste.

Overproduction Overproduction is producing more than the next step needs or more than the customer buys. It may be the worst form of waste because it contributes to all the others. Examples are: Preparing extra reports Reports not acted upon or even read Multiple copies in data storage Over-ordering materials Duplication of effort/reports Producing more parts than necessary to satisfy the customer’s quantity demand thus leading to idle capital invested in inventory. Also producing parts at a rate faster than required such that a work-in-process queue is created – again, idle capital. Waste of Overproduction relates to the excessive accumulation of work-in-process (WIP) or finished goods inventory.

Correction of defects is as obvious as it sounds. Examples are: Incorrect data entry Paying the wrong vendor Misspelled words in communications Making bad product Materials or labor discarded during production Eliminate errors!! Correcting or repairing a defect in materials or parts adds unnecessary costs because of additional equipment and labor expenses. An example is the labor cost of scheduling employees to work overtime to rework defects. Waste of Correction includes the waste of handling and fixing mistakes. This is common in both manufacturing and transactional settings.

Inventory Inventory is the liability of materials that are bought, invested in and not immediately sold or used. Examples are: Transactions not processed Bigger “in box” than “out box” Over-ordering materials consumed in-house Over-ordering raw materials – just in case Inventory is a drain on an organization’s overhead. The greater the inventory, the higher the overhead costs become. If quality issues arise and inventory is not minimized, defective material is hidden in finished goods. To remain flexible to customer requirements and to control product variation, we must minimize inventory. Excess inventory masks unacceptable change-over times, excessive downtime, operator inefficiency and a lack of organizational sense of urgency to produce product. Waste of Inventory is identical to overproduction except that it refers to the waste of acquiring raw material before the exact moment that it is needed.

Motion is the unnecessary movement of people and equipment. This includes looking for things like documents or parts as well as movement that is straining. Examples are: Extra steps Extra data entry Having to look for something Waste of Motion examines how people move to ensure that value is added. Any movement of people or machinery that does not contribute added value to the product, i.e. programming delay times and excessive walking distance between operations.

Overprocessing Overprocessing is tasks, activities and materials that don’t add value. Can be caused by poor product or tool design as well as from not understanding what the customer wants. Examples are: Sign-offs Reports that contain more information than the customer wants or needs Communications, reports, emails, contracts, etc that contain more than the necessary points (briefer is better) Voice mails that are too long Waste of Overprocessing relates to over-processing anything that may not be adding value in the eyes of the customer. Processing work that has no connection to advancing the line or improving the quality of the product. Examples include typing memos that could be had written or painting components or fixtures internal to the equipment.

Conveyance is the unnecessary movement of material and goods. Steps in a process should be located close to each other so movement is minimized. Examples are: Extra steps in the process Distance traveled Moving paper from place to place Conveyance is incidental, required action that does not directly contribute value to the product. Perhaps it must be moved however, the time and expense incurred does not produce product or service characteristics that customers see. It’s vital to avoid conveyance unless it is supplying items when and where they are needed (i.e. just-in-time delivery). Waste of Conveyance is the movement of material.

Waiting Waiting is nonproductive time due to lack of material, people, or equipment. Can be due to slow or broken machines, material not arriving on time, etc. Examples are: Processing once each month instead of as the work comes in Showing up on time for a meeting that starts late Delayed work due to lack of communication from another internal group Idle time between operations or events, i.e. an employee waiting for machine cycle to finish or a machine waiting for the operator to load new parts. Waste of Waiting is the cost of an idle resource.

Exercise objective: To identify waste that occurs in your processes. Write an example of each type of Muda below: Overproduction ___________________ Correction ___________________ Inventory ___________________ Motion ___________________ Overprocessing ___________________ Conveyance ___________________ Waiting ___________________ Using the Excel file “Define Templates.xls”, (TAB) Muda – Elements of waste, perform this exercise.

5S – The Basics 5S is a process designed to organize the workplace, keep it neat and clean, maintain standardized conditions and instill the discipline required to enable each individual to achieve and maintain a world class work environment. Seiri - Put things in order Seiton - Proper Arrangement Seiso – Clean Seiketsu – Purity Shitsuke - Commitment 5S The term “5S” derives from the Japanese words for five practices leading to a clean and manageable work area. The five “S” are: ‘Seiri' means to separate needed tools, parts and instructions from unneeded materials and to remove the latter. 'Seiton' means to neatly arrange and identify parts and tools for ease of use. 'Seiso' means to conduct a cleanup campaign. 'Seiketsu' means to conduct seiri, seiton and seiso at frequent, indeed daily, intervals to maintain a workplace in perfect condition. 'Shitsuke' means to form the habit of always following the first four S’s. Simply put, 5S means the workplace is clean, there is a place for everything and everything is in its place. The 5S will create a work place that is suitable for and will stimulate high quality and high productivity work. Additionally it will make the workplace more comfortable and a place of which you can be proud. Developed in Japan, this method assumes no effective and quality job can be done without clean and safe environment and without behavioral rules. The 5S approach allows you to set up a well adapted and functional work environment, ruled by simple yet effective rules. 5S deployment is done in a logical and progressive way. The first three S’s are workplace actions, while the last two are sustaining and progress actions. It is recommended to start implementing 5S in a well chosen pilot workspace or pilot process and spread to the others step by step.

5 S Straighten Shine Sort Self-Discipline Standardize English Translation There have been many attempts to force five English “S” words to maintain the original intent of 5S from Japanese. Listed below are typical English words used to translate: 1. Sort (Seiri) 2. Straighten or Systematically Arrange (Seiton) 3. Shine or Spic and Span (Seiso) 4. Standardize (Seiketsu) 5. Sustain or Self-Discipline (Shitsuke) Place things in such a way that they can be easily reached whenever they are needed. Straighten Shine Sort 5 S Visual sweep of areas, eliminate dirt, dust and scrap. Make workplace shine. Identify necessary items and remove unnecessary ones, use time management. Regardless of which “S” words you use, the intent is clear: Organize the workplace, keep it neat and clean, maintain standardized conditions and instill the discipline required to enable each individual to achieve and maintain a world class work environment. Self-Discipline Standardize Make 5S strong in habit. Make problems appear and solve them. Work to standards, maintain standards, wear safety equipment.

Exercise objective: To identify elements of 5S in your workplace. Write an example for each of the 5S’s below: Sort ____________________ Straighten ____________________ Shine ____________________ Standardize ____________________ Self-Discipline ____________________ Using the Excel file “Define Templates.xls”, (TAB) 5S, perform this exercise.

Identify and describe the 7 Elements of Waste Summary At this point, you should be able to: Identify and describe the 7 Elements of Waste Describe 5S Provide examples of how Lean Principles can affect your area Please read the slide.

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