Vital Links: Lean, Six Sigma and Change Management The Lean Enterprise Vital Links: Lean, Six Sigma and Change Management Welcome and introductions. Allow 45 minutes to 1 hour to cover this material. Lean Foundations Continuous Improvement Training freeleansite.com

Learning Objectives Explore the component parts of a Continuous Improvement Process (CIP) and how Six Sigma, Change Management and Lean methodologies work together within the DMAIC problem solving process. Examine the importance, benefits and integration of ‘Lean Thinking’ to help achieve Company objectives and operational strategies. Explain the need for providing more detailed Lean tools. Provide additional resources for self study. freeleansite.com

? N: Improvement What is the Importance of doing better (CIP)? Need for Improvement Achieve Process Excellence Address Process Summary Analysis (Most operations exhibit 15% - 30% waste!) Differentiate brand/ market/ service/ value (i.e. John Crane, Wal-Mart, Maytag, Costco …) Economic Benefits (reduce costs) Enhance Safety, Improve Quality Speed to Market (Total Cycle Time reduction) Employee Satisfaction Customer Delight ! N: (Need) freeleansite.com freeleansite.com

What are some more benefits?   - Ability to attain Better Caliber, High Profit Customers - Identification of “Shining Stars” within the Organization - Less Safety related Incidents, Accidents and Downtime Through Safer Operations and incorporation of workplace organization (6S) a Reduction of Liability Insurance Premiums FY20xx (5% to 15%) Reduction of COPQ - rework and scrap (labor and material savings and associated benefits) - Trained Team Leaders: 6S, Green/ Lean Belts, Black Belts - Generation of ‘Mistake Proofing’ Ideas/ Processes Realization of $15,000 to $150,000 (or more) cost savings per Black Belt/ Green/ Lean Belt project freeleansite.com

What are some more benefits?   - Better response to ever increasing Customer Demands - Shorter Lead times, Less Inventory - Less Debt/ reduced carrying charges/ COGS - Continually decreasing Set-up times (increased capacity) - More floor space for production Better reliability, maintainability and utilization of equipment - Longer equipment life Reduction of Supply Partners and reduction in associated SCM administrative costs More satisfied employees Less tardiness, absenteeism, turnover freeleansite.com

$ What are some developmental elements? Safety 6s Lean Executive Sponsorship Metrics focused on results important to the customer and with the highest potential for adding hard dollars to the bottom line (DMAIC) Disciplined systematic approach designed to maximize results Safety 6s Lean “Lean Belt’s” $ Quality Speed Project Reviews 6S Project Leaders “Green Belt’s” Change Management Safety First ! Proactive Workforce Safety and 5S together: Integrated and aligned people and processes CAP Prevention is the Key freeleansite.com Trained “Champions” freeleansite.com

What are the 3 components comprising CIP? I P O Voice of the Customer Policy Deployment/ SOX / ISO Visual Management Supplier Quality Process Capability SOPs/Standard Work Product Assurance (SPC, RCCA) Communication Team Dynamics Turnover Rate Cellularization One Piece Flow Manpower Setup SOPs/ SMED Maintenance SOPs (TPM) Cell Cleanliness (6S) Total Employee Involvement (TEI) Measurement Systems PPM COPQ Quality S y First Pass Yield Six Sigma Setup Labor Cost Space Inventory Process Product Change Management Process Excellence In-Process Storage Throughput Travel (Material) Lean Labor Delay Delivery Capacity Lead Time Setup Kanban Process freeleansite.com freeleansite.com

How do the 3 components come together? The Lean Enterprise (including 6S) Methodology (philosophy and rich tool set) that is particularly focused on identifying and eliminating waste and improving workflows WIP, Lead Time, Waste & Wasted Motions Change Management Methodology for assuring that change is sustained within organization “Positively affecting the Continuous Improvement culture” Six Sigma Methodology for reducing variation and driving solutions of any existing process (using data with graphical and statistical analysis) Yield, Cycle Time, Re-Work “Six Sigma / Change Management/ Lean L-I-N-K” When done in concert - powerful combination freeleansite.com freeleansite.com

Other subjects touched on: What is the presentation ratio of Topics/ Subject Matter within typical CIP training? (% material content) Green Belt, 2 weeks Black Belt, 4 weeks Six Sigma (40%) Lean (40%) Change Management (20%) Other subjects touched on: Project Management, Facilitation/ Communication/ Presentation Skills, Report Writing and use of statistical software packages: i.e. Excel, Mini-Tab freeleansite.com

What are some CIP training topics What are some CIP training topics? (A sampling of techniques/ tools taught) Project Charter Decision Making XY Matrix Process Capability SPC/ FMEA/ DoE etc Change Management Addressed in typical GB/ BB curriculum: Some topics are addressed in both: 6S Kaizen Takt Time Mistake Proofing Process Mapping TPM Quick Change-over Kanban Value Stream Mapping Visual Management Standard Work Others addressed in ‘Lean Enterprise’ modules only: (single point lessons, more detailed) freeleansite.com

What is Six Sigma about? Six Sigma … Measure defects in a process and … (with rigor and discipline) systematically figure out ways to reduce them to zero. “Puts practical tools to work to reduce variation at all levels achieving tangible results of cost savings, employee, customer and stakeholder satisfaction.” freeleansite.com freeleansite.com

What is the “DISCIPLINE” of Six Sigma? Measure Analyze Improve Control Quantify Define Project Selection Team Formation Identify CTXs Y Define Process Capability Validate Measurement System Define Defects Baseline Set Goals Identify x’s Find and Confirm vital few x’s Pilot Solution Y = f (x) Ensure Solution is Sustainable freeleansite.com freeleansite.com freeleansite.com

What is the focus of Six Sigma? Variation reduction: Six Sigma attacks process variation Six Sigma creates capable and predictable processes Six Sigma is about measuring and improving how close we come to delivering on what we planned to do Six Sigma does one thing… freeleansite.com freeleansite.com

What are some Six Sigma Tools? Process Map X - Y Matrix Measurement System Analysis Capability Analysis Descriptive Statistics Graphical Techniques Box Plots Histograms Scatter plots Time Series Plots Run Charts Pareto Charts Check Sheets Analysis of Variance Correlation Regression Inferential Statistics Central Limit theorem Confidence Intervals Failure Modes and Effects Analysis Multi - vari Studies Design of Experiments Fractional Experiments Full Experiments Response Surface Methods Analysis of Means Transformations Sample Size Selection Fishbone Diagrams Hypothesis Testing F - test. T - test Chi - square test Tests for Normality Tests for Equal Variances SPC Charts Control Plans DFSS Statistical Tolerancing Cover just a few tools … freeleansite.com freeleansite.com

What is Change Management about? - Change acceleration is a process to ease acceptance of new ideas. Effective Change Management assures that improvement initiatives remain in force and that organizations don’t revert back to the old ways (methods). “Ensures that process and system improvements are permanent, gains are realized, proven effective and continuously improved.” freeleansite.com freeleansite.com

What is the Change Acceleration Process? Leading Change Share Need Shape Vision Get Buy-in Current State Transition State Improved State Make it last Monitor Progress Changing Systems & Structures freeleansite.com freeleansite.com

What are the steps for Managing Change? Leading Change Give people someone to follow – by you and your Champions actions. Shared Need Create an imperative to act now. Pass this on to others. Shape Vision Be precise about what you want to achieve and and make sure it is widely understood and shared. Get Buy-in You must involve people and pass on your enthusiasm so that once you start another project the change is sustained. freeleansite.com freeleansite.com

Steps for Change (Cont.) Make it Last Ensure that all influences to confound or support change are controlled. Monitor Progress Ensure that you are measuring effect not effort. Further publish progress Finally: Changing Systems and Structures Making sure that management practices (Staffing, development, rewards, measures, communication and organizational design) are used to compliment and reinforce change . freeleansite.com freeleansite.com

What are the elements to making change last? Leading Change Ability to adjust Understanding Reflection/ integration Clear path forward Making change last Motivation/ energy Ongoing support/ commitment Clear Continuous Communication Changing systems & structures freeleansite.com freeleansite.com

What is Lean about ? The Lean Enterprise … - Identify and eliminate Waste (Muda) and Wasteful Practices Providing value in the eyes of the customer … “any part of the process for which the customer is willing to pay. Value added activities would be those involved in producing and delivering goods and services.” freeleansite.com freeleansite.com

What is the Alignment of Lean w/ DMAIC? Define Measure Analyze Improve Control 6S activities Inventory Accuracy Takt Time Value Stream Analysis Line Balance Standardized Operations/ Standard Work Set-up Reduction Visual Management/ Control Kanban/ POU TPM Poka-Yoke Lean Approaches Align with D-M-A-I-C freeleansite.com freeleansite.com freeleansite.com

How does Lean fit under D/M A I(*m) C ? Define Business Case Lean Assessment Measure I.D. Waste, CTXs, Cost Savings Analyze Scope Relevant Improvement Opportunities I.D. Project Areas/Teams Improve Control Estimate New Capability Mistake Proof Define LEAN projects STILL NEED DATA !! Lean projects, such as KAIZEN, require a project charter (quantification) and follow DMAIC. Also, need metrics at improve phase to assure and sustain gains. Done quicker during the Kaizen event. Pilot / Assess Impact (*measure) Institutionalize Particularly Applicable to “Agile” Manufacturing freeleansite.com freeleansite.com freeleansite.com

What is the focus of Lean? Identification and elimination of waste Lean creates value by eliminating waste and aligning processes Lean creates standardized processes A means of revealing other projects which may require ‘DMAIC’ problem-solving methodologies Lean does another thing … freeleansite.com freeleansite.com

What are some Lean Tools? One piece flow Pull production system Level loading production Cycle time reduction/ Set-up reduction Aligning processes to customer demand (Takt-Time) Mistake proofing Elimination of the 7 elements of waste Visual Management/ Visual Control 6S (5s + safety) Value vs. Non-value added activities Kaizen Activities Best Practice Sharing Cover a few of the tools … freeleansite.com freeleansite.com

Six Sigma (GB, BB, MBB project applications) Do all methodologies incorporate DMAIC? Yes ! … time between phases may vary however. Lean Define Six Sigma (GB, BB, MBB project applications) VARIATION Measure WASTE 6S Analyze Workplace organization Improve Rapid Implementation of Solution Driving The Lean Enterprise means utilizing all technologies available. Time between DMAIC phases may be dependent on several factors: which phase you are in and what tools you are utilizing, how big the project is and maturity of the team in problem solving… The point is all improvement methodologies follow the same process. Control Problem Solving/ Root Cause and Corrective Action freeleansite.com freeleansite.com

Why the Need for additional Lean material? Changing business climate … Increased expectations of performance: Operate in a higher standard of HS&E requirements. (Safety) Produce product and deliver services (processes) with Six Sigma capability. (Quality) Produce in smaller quantities with faster delivery turnarounds. (Speed of execution) freeleansite.com

When would a team use The Lean Enterprise information (modules)? To strengthen already existing CIP vision, strategies, methodologies, projects … __________________________________________________________________ Lean Enterprise (LE) is an additional set of foundational tools and techniques that teams utilize to identify and eliminate waste and wasteful practices. They were developed to be self-taught (facilitated) by a Black Belt. Adapting LE creates standardized processes A means of revealing other projects which may require ‘DMAIC’ problem-solving methodologies freeleansite.com freeleansite.com

How does adopting ‘Lean Thinking’ fit into our Business Strategy? Lean application opportunities are identified through baseline assessment efforts (e.g. – CIP assessments, Quality audits, Internal audits, SOX, ISO audits et al) Lean enhances understanding of current operating conditions, and through Value Stream Analysis, helps determine the areas and sequencing of improvement initiatives With its ‘Process Analysis’ mindset - The Lean Enterprise, as part of CIP - integrates the strategic Corporate strategies around Process Excellence, Organizational Capability and Organic Growth freeleansite.com freeleansite.com

How does adopting The Lean Enterprise principles help the Company? Lean Enterprise (LE) emphasizes prevention of waste: any extra time, labor or material spent producing a product or service that doesn’t add value to it. LE can help reduce costs, achieve just-in-time delivery, and shorten lead times. LE allows production of a wide variety of products and services, efficient and rapid changeover, efficient response to fluctuating demand, and increased quality. freeleansite.com freeleansite.com

How does The Lean Enterprise help our Customers? Lean Thinking facilitates streamlining the front end of the business with transactional Kaizen events and frictionless e-business We add value to customer relationships through customer-focused process improvement and joining in our customer’s process improvement initiatives freeleansite.com freeleansite.com

How does The Lean Enterprise help our Customers? Through CIP (Lean, Six Sigma, Change Management), we strive to deliver the right product, at the right time, at the right price, with perfect quality every time. We use on-time delivery, lead time and quality metrics to measure our performance freeleansite.com freeleansite.com

How does The Lean Enterprise help our Suppliers? Developed to transform key suppliers into our long-term partners and leverage their capability ___________________________ Going Lean creates standardized processes. Many of our businesses represent a scorecard to supply partners – measuring their quality, on-time delivery, and other metrics Increased supplier communication pays off in high efficiency freeleansite.com freeleansite.com

How does The Lean Enterprise help our Suppliers? Other SCM elements of the overall approach include: Supplier Managed Inventory, Kanban and consignment, as well as long term agreements to realize efficiencies and reduce cost targeting point-of-use delivery – significantly improving working capital ‘On-site Supplier Development’ (OSD) work with key suppliers - leading them to become self-directed learning organizations cognizant of incorporating available improvement technologies freeleansite.com freeleansite.com

Continuous Improvement Process Putting It All Together PEOPLE Driving Growth Productivity Results Continuous Improvement Process freeleansite.com freeleansite.com

What is the “essence” of CIP What is the “essence” of CIP? Applying appropriate problem-solving tools for maximum Results! There is no single approach that guarantees project success. However there are some basics: Developing Objectives using SMART criteria Developing a good Plan Applying tried & tested tools (Six Sigma and Lean) Getting Employee Involvement (collaborating teams) Trusting Empowered People - who ACT ON FACT Utilizing Brainstorming techniques Encouraging Process Mapping and Process Analysis Assuring control and mistake proofing Accomplishing more with less Celebrating success ! No matter which methodology – or even a combination of both - Emphasize applying tools for results, project completion is the key !! Group exercise might be to perform a Threat vs. Opportunity matrix (4-up) on Why we need to do CIP?? OR Why they need to do their project ? freeleansite.com freeleansite.com

How does Lean & Six Sigma drive results? By Pursuing Perfection! Product and Process Improvement Direct and indirect cost reductions: COGS Process Analysis and Improvements: COPQ Efficient and effective utilization of Resources Labor contribution (Standard Hours) Equipment Utilization (OEE) Material Consumption (Spend) G&A / Overhead Absorption Employee Satisfaction Retainment, Training, Development, Recognition Stakeholder Delight ROI, RONA No matter which methodology – or even a combination of both - Emphasize applying tools for results, project completion is the key ! freeleansite.com freeleansite.com

by Barbara Wheat, Chuck Mills, Mike Carnell Where can I learn more about Lean Six Sigma ? (Call Jay Watson 480 820 0877) These 2 books are quick reads… Leaning into Six Sigma (paperback) by Barbara Wheat, Chuck Mills, Mike Carnell The Gold Mine by Freddy Ballé and Michael Ballé The Gold Mine: a Novel of Lean Turnaround deftly weaves together the technical and human pieces of implementing lean manufacturing in an engaging story that readers will find both compelling and instructive. freeleansite.com freeleansite.com

Vital Links: Lean, Six Sigma and Change Management The Lean Enterprise Vital Links: Lean, Six Sigma and Change Management Lean Foundations Continuous Improvement Training freeleansite.com