BUS 4543 Quality Management Tools Learning Outcome Four Continual Improvements Methods

Continual Improvement Methods with Six Sigma, Lean, and Lean Six Sigma MAJOR TOPICS Rationale for Continual Improvement Management’s Role in Continual Improvement Essential Improvement Activities Structure for Quality Improvement The Scientific Approach Identification of Improvement Needs

Continual Improvement Major Topics Continued Development of Improvement Plans Common Improvement Strategies Additional Improvement Strategies The Kaizen Approach Goldratt’s Theory of Constraints The CEDAC Approach The Lean Approach The Six Sigma Approach The Lean Sigma Approach The Theory of Constraints (TOC) and Integrated TOC, Lean, Six Sigma (iTLS) Approach

Rationale for Continual Improvement - Continual Improvement is fundamental to success in the global market place. - Customer needs are not static; they change continually. - Just maintaining the status quo, even if the status quo is high quality, is like standing still in a race.

Management’s Role in Continual Improvement In his book Juran on Leadership for Quality, Joseph Juran writes: “The picture of a company reaping big rewards through quality improvement is incomplete unless it includes some realities that have been unwelcome to most upper managers. Chief among these realities is the fact that the upper managers must participate personally and extensively in the effort. It is not enough to establish policies, create awareness, and then leave all else to subordinates. That has been tried, over and over again, with disappointing results”.

Cont’d… Management should play necessary role in continual improvement by doing the following: Establishing an organization-wide quality council. Working with the quality council. Providing the necessary moral and physical support. Scheduling periodic progress reviews. Building continual quality improvement in to the regular reward system.

Essential improvement elements Maintain communication- teams should know what, when and where and how should be done. Correct obvious problems- use scientific methods, observe and record where required only Look upstream- look for causes not results. Document problems and progress- enable you to save time on problems encountered and solved earlier Monitor changes-pride of ownership of monitoring should be given to those who initiated the changes. Deming’s rule- Improvement is not putting out fires.

Improvement must be Continual “Improve constantly and forever the system of production and service. Improvement is not a one-time effort. Management is obligated to continually look for ways to reduce waste and improve quality”.

Structure for Quality Improvement Establishing a quality council. Develop a statement of responsibilities. Formulating policy as it relates to quality. Setting the benchmarks and dimensions. Establishing the team and project selection processes. Providing the necessary resources. Implementing the project. Establishing quality measures for monitoring progress and undertaking monitoring efforts. Implementing appropriate reward and recognition program. Establish the necessary infrastructure

The Scientific Approach Collect Meaningful Data. Identify Root Causes of problems. Develop Appropriate Solutions. Plan and Make Changes. Ways of identifying improvement needs include the following: Multi-voting (brainstorming) for improvement candidates Identifying customer needs Studying how employee time is spent. Localizing problems before trying to solve them.

Improvement can be Measured Improvement can be measured and monitored by using performance indicators. Some of the examples are listed below: Number of errors or defects Number of or level of need for repetitions of work tasks Efficiency indicators Number of delays Duration of a given procedure or activity Response time or cycle Cost /ratio Amount of overtime required Changes in work load Level of standardization Number of unfinished documents

improvement Strategies Developing improvement plans involves the following steps: Understanding and describing the process (Flow chart the process) Eliminating any obvious errors Removing slack from processes (anything that serves no purpose) Reducing variation in processes (special and common causes) Planning for continual improvement to become a way-of-life.

Commonly used improvement strategies include the following: Cont. Commonly used improvement strategies include the following: Standardizing the process (make sure the process procedures are followed) Eliminating errors and potential errors in the process Streamlining the process (eliminating non- value-adding steps) Bringing the process under statistical control Improving the design of the process.

Continual Improvement Additional improvement strategies include the following: Reducing lead-time Flowing production Using group technology Leveling production Synchronizing production Overlapping production Using flexible scheduling Using pull control Using visual control Using stockless production

Other improvement strategies Using jidoka Reducing setup time Controlling work-in-process Improving quality Applying total cost cycles Using cost curves Using supplier partners Applying total productive maintenance

Elements of kaizen Customer focus Teamwork Just-in-time Quality circles Automation Labor/ management cooperation Total productive maintenance

Straighten up (getting rid of any tools, materials, etc. not required) kaizen Process Kaizen is the name given by Japanese to the concept of continual incremental improvement. Kai means change and Zen means good. People, processes, management and products and services should improve continually if KAIZEN is in place. It includes the following: Straighten up (getting rid of any tools, materials, etc. not required) Put things in order (so when a tool is needed, it is readily available) Clean up (keeping the workplace neat and clean Standardize (on the best practices) Discipline (everyone adheres to the work procedures)

CEDAC and continual Improvement CEDAC = cause-and-effect with additional cards. The Lean Approach is based on the just-in-time Toyota Production System (TPS). A Lean operation is one in which a better product is developed or a better service is delivered using less of everything required (i.e. human, financial, technological, and physical resources). Lean is about being flexible enough to get the right things, to the right place, at the right time, in the right amounts. Lean is focused on elimination of all wastes, and continual improvement of products and processes.

CEDAC Approach 3 conditions must exist for continual improvement to occur. A reliable system (standardized and reliable) A favorable environment (favorable to improvement) Practicing as teams (Total Quality is performed by teams. Teams must practice)

Six Sigma and Continual Improvement Six Sigma is a statistically based approach that targets the defect rate at 3.4 per million or less. Key elements of Six Sigma include; the DMAIC roadmap. Like other approaches, Six Sigma aims for quality improvement, but goes further to tie these quality improvement initiatives to the financial elements of the organization. The Lean Six Sigma approach is not a low calorie variation of Six Sigma, but a linking of JIT/Lean and Six Sigma that synergistically combine the benefits of both.

DMAIC Roadmap The Nucleus of Six Sigma: Define, Measure, Analyze, Improve, and Control. Five Phases are constant Steps, tools and outputs of each phase may vary somewhat.

Define 1. initiate the project 2. Define the process 3. Determine Customer requirements 4. define key process output variables Possible tools: value stream maps, affinity diagrams, brainstorming, surveys

Measure 1. Understand the process 2. Evaluate risks on process inputs 3. Develop and evaluate measurements systems 4. measure current performance Results: Knowing your starting point, verification of measurement systems, current capabilities

Analyze 1. Analyze data to prioritize key input variables 2. Identify waste Results: root causes reduced. Prioritize potential key inputs, and list specific wastes. Tools: Five-S (sort, store, shine, standardize, & sustain)

Improve 1. verify critical outputs 2. Design Improvements 3. Pilot the new process Results: an action plan for improvement, future state process maps, control maps, new process design/documentation

Control 1. Finalize the control system 2. Verify long-term capability Results: a control system, improvement validated for long term, identified continual improvement opportunities, team recognition

Goldratt Defines Restraint “Anything that limits an organization from achieving higher performance vis-à-vis its goal”. Identify: any factor that tends to constrain. Exploit: how can the factor be turned into positive factors, eliminated, or circumvented.

Six Sigma Concept Introduced by Motorola in the mid- 1980’s Purpose: to improve the performance process to where defects rate was 3.4 per million or less. Designed for high volume production settings.

Six Sigma: The Name From the concept of standard deviation signified by lowercase Greek letter sigma: σ Processes and outputs typically measure in their standard deviations from the mean (ideal point).

What Does That Mean? Most good companies operate between 3 and 4 sigma. Or: 99.73% of process output will fall between ± 3 standard deviation at 3 sigma or 99.9937% at 4 sigma. 3 sigma operation will yield 2700 defective parts for every 1 million produced.

Six Sigma and Total Quality Six Sigma is an extension of Total Quality. Six Sigma is a total quality strategy, like all others, to achieve: superior performance, that is continually improved, forever. Six Sigma is achieved by improving process performance.

Defining Lean Based on the Toyota Production System (TPS). Lean Operation: a better product is developed or a better service is delivered by using less of everything required.

Definition Lean is: being flexible enough to get the right things, to the right place, at the right time, in the right amounts. The Heart: reduction of waste and the improvement of workflow.

Lean Focuses on Waste Overproduction Waste Inventory Waste Motion Waste Transportation Waste Over-processing Waste Defects Waste Waiting Waste Underutilization Waste

Lean Six Sigma Combining Lean and Six Sigma Key Concepts: Green Belts Black Belts Master Black Belts Champions DMAIC Roadmap (or lean Six Sigma)

Where to Use? In Manufacturing: Especially effective for the following types of continual improvement projects: Accuracy in invoicing Capacity of line and product Lead time on delivery Production Replenish downtime on equipment and lines

Where to Use? In Service Sector: Accuracy in invoicing, delivery, and product Capacity of service area, call center, and product Lead time on delivery and call hold time Downtime on equipment, servers, and lines