Lean Principles First, let’s investigate Lean Principles. Copyright OpenSourceSixSigma.com

Lean Principles Definition Lean is a systematic approach to process optimization based on the premise that anywhere work is done, some amount of waste (non-value add effort) is generated The goal is: Total elimination of waste (MUDA) through: Identifying the sources Planning for waste elimination Use of Lean, Process Management and Six Sigma Establishing “permanent” controls that prevent reoccurrence The first step toward waste elimination is identifying it Move it! 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. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste Seven Areas of WASTE Correction 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. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste 2. Overproduction Producing more parts than necessary. Producing parts at a rate faster than required. Doing this requires more raw product inventory than necessary, over uses machines and people and requires more storage area. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste 3. Processing Processing work that has no connection to advancing the line or improving the quality of the product. Examples include typing memos that could be hand written or painting components or fixtures internal to the equipment. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste Conveyance Conveyance is incidental, required action that does not directly contribute value to the product. It’s vital to avoid conveyance unless it is supplying items when and where they are needed (i.e. just-in-time delivery). Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste 5. Inventory Inventory is a drain on an organization’s use of capital. The greater the inventory, the higher the carrying costs. If quality issues arise and inventory perishes, defective material may be 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. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste Motion 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. Copyright OpenSourceSixSigma.com

Examples of the 7 Areas of Waste 7. Waiting 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. Copyright OpenSourceSixSigma.com

Lean Value Stream Analysis Now we look at the flow of work through your organization. Copyright OpenSourceSixSigma.com

Enabling you to “see what is actually happening.” Lean Value Stream Map I Coils 5 days Person C/T = Uptime = Run Hrs= Breaks= Hrs Avail= Sec. Avail= Stamping 1 Person 500 Ft Rolls Tue. & Thurs Pieces/Mo Tray= Shifts= Delivery DPMO= Quality DPMO= Best Metal, Inc Dellex . A way of viewing the overall Value Stream, from supplier to the customer, on one sheet of paper. Enabling you to “see what is actually happening.” Mon & Wed A Value Stream is all of the actions (both value-added and non-value added) currently required to deliver a product or a service. It is the work activity and information flow occurring as raw material or information becomes a product/service that is delivered to a customer. It is the flow of paper and information from its origin or initial request, to the desired service or action, to its final delivery to the user or customer. It is the entire flow, from door to door. It can be comprised of several key process areas that together achieve the deliverable. Using a Value Stream perspective means working on the big picture, not just individual process steps, to find individual opportunities to optimize the whole. For any given product or service, a Value Stream spans all of the processes from the delivery of supplied parts, material and information, to the delivery and receipt by the user or customer. It is an analysis that helps you to see and understand the flow of materials, documents and information as a product or service flows through the all of the processes from the customer back to the supplier. The analysis is performed by drawing a visual representation with specific information about every major process of the material and information flow from the customer to the supplier. The end goal is to achieve an efficient future state of process flow that integrates individual optimizations achieved from Six Sigma projects and other appropriate methods. Copyright OpenSourceSixSigma.com

Why a Value Stream Analysis is Essential It helps you visualize more than the just the single process level, i.e. order entry, invoicing, shipping, assembly, test, welding, etc. You can see the complete flow. Value Stream Analysis is a qualitative process that allows you to understand in detail how your business should operate to achieve breakthrough performance levels. It helps you see sources of inefficiency and problems in the complete generation and delivery of your service or product. It forms the basis of an improvement vision and plan by helping understand how door-to-door flow should be performed to optimize costs, cycle times and quality. It conceptualizes Six Sigma projects as well as other improvement efforts. Value Stream Analysis is good for describing what you will do to change business-performance levels. I Coils 5 days Person C/T = Uptime = Run Hrs= Breaks= Hrs Avail= Sec. Avail= Stamping 1 Person 500 Ft Rolls Tues. & Thurs. Pieces/Mo Tray= Shifts= Delivery DPMO= Quality DPMO= Best Metal, Inc Dellex . Mon & Wed With products and services, we tend to think mostly of the flow of materials that achieve the required deliverables. It is important to know the information flow also. Information tells each process step what to do next and what to produce. The goal is understand how information flows so every discrete process will do only what is needed and when it is needed. We must define the workflow, then look at how the workflow is managed using various forms of information and communication. For the purposes of this class we will focus only on the workflow and just briefly cover information flow. A Value Stream Map will provide you with these six essential benefits and if you add Six Sigma metrics to the Value Stream Map, you will have a door to door characterization for a product or service you deliver to a customer. Copyright OpenSourceSixSigma.com

Value-Stream Analysis Summary Value Stream Analysis puts the pertinent information about the total work effort of a product or service on one sheet of paper, the current-state map. The human mind loses continuity and clarity when information is fragmented across multiple places and sheets of paper. We can also map the information flow, i.e. customer and supplier ordering, production control, etc., to complete the picture. Overall performance and process-specific problem areas become visible for improvement actions. This analysis can be done as a part of the overall characterization of a process. The next step is to identify efficiency and effectiveness targets for the process. The end result is a future-state map with a vision/plan that is achieved through Six Sigma projects and other actions. Please read the slide. Copyright OpenSourceSixSigma.com

Applying the 5S Principles Next we must get the workplace organized. Copyright OpenSourceSixSigma.com

5S - Workplace Organization 5S means the workplace is clean, there is a place for everything and everything is in its place. 5S is the starting point for implementing improvements to a process. To ensure your gains are sustainable, you must start with a firm foundation. Its strength is contingent upon the employees and company being committed to maintaining it. 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 Ss. On the next several pages we have translated the Japanese words to English word. 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 that you can be proud of. Developed in Japan, this method assume no effective and quality job can be done without clean and safe environment and without behavioral rules. The 5S allow 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 S’s 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. Copyright OpenSourceSixSigma.com

5S Translation - Workplace Organization Focus on using the English words, much easier to remember. Step Japanese Literal Translation English Step 1: Seiri Clearing Up Sorting Step 2: Seiton Organizing Straightening Step 3: Seiso Cleaning Shining Step 4: Seketsu Standardizing Standardizing Step 5: Shitsuke Training & Discipline Sustaining The English translations are: Seiri = Sorting Eliminate everything not required for the current work, keeping only the bare essentials. Seiton = Straightening Arrange items in a way that they are easily visible and accessible. Seiso = Shining Clean everything and find ways to keep it clean. Make cleaning a part of your everyday work. Seketsu = Standardizing Create rules by which the first 3 S’s are maintained. Shitsuke = Sustaining Keep the efforts from unraveling. Copyright OpenSourceSixSigma.com

SORTING - Decide what is needed. Definition: To sort out necessary and unnecessary items. To store often used items at the work area, infrequently used items away from the work area and dispose of items that are not needed. Why: Removes waste. Safer work area. Gains space. Easier to visualize the process. Things to remember Start in one area, then sort through everything. Discuss removal of items with all persons involved. Use appropriate decontamination, environmental, and safety procedures. Items that cannot be removed immediately should be tagged for later removal. if necessary, use movers and riggers. The first stage of 5S is to organize the work area, leaving only the tools and materials necessary to perform daily activities. When “sorting” is well implemented, communication between workers is improved and product quality and productivity are increased. Copyright OpenSourceSixSigma.com

A Method for Sorting Dispose Sorting Unknown Item Useful ABC Storage Useless Sorting Keep & Monitor Unknown Item Keep & Store Useful ABC Storage 5S usually begins with a great initial cleaning, where sorting out the items is a highlight. For each item, it must be stated if it is useful, useless or undetermined. For some items the statement may be touchy, as nobody seems to know if they are really useful or not and what is their frequency of use. Always start with the easiest items to classify. Difficulty should be no excuse, go for it, starting with easiest. Sort each item according to 3 categories: Useful Useless Unknown The two first categories are problem to sort as their status is clear. Dispose of immediately any useless items, because they just clutter the workspace, lead to loss of time, confusion and poor quality. For items in the unknown category or the frequency of use is unclear, keep them where they are for a predetermined period of time and if found that they are not used, dispose of them. For items that are useful, there is also a method for determining how and where they should be stored to help you achieve a clean and orderly workplace. Copyright OpenSourceSixSigma.com

STRAIGHTENING – Arranging Necessary Items Definition: To arrange all necessary items. To have a designated place for everything. A place for everything and everything in its place. Easily visible and accessible. Why: Visually shows what is required or is out of place. More efficient to find items and documents (silhouettes/labels). Saves time by not having to search for items. Shorter travel distances. Things to remember Things used together should be kept together. Use labels, tape, floor markings, signs, and shadow outlines. Sharable items should be kept at a central location (eliminated excess). The second stage of 5S involves the orderly arrangement of needed items so they are easy to use and accessible for “anyone” to find. Orderliness eliminates waste in production and clerical activities. Copyright OpenSourceSixSigma.com

SHINING – Cleaning the Workplace Definition: Clean everything and find ways to keep it clean. Make cleaning a part of your everyday work. Why: A clean workplace indicates a quality product and process. Dust and dirt cause product contamination and potential health hazards. A clean workplace helps identify abnormal conditions. Things to remember “Everything in its place” frees up time for cleaning. Use an office or facility layout as a visual aid to identify individual responsibilities for cleaning. This eliminates “no man’s land.” Cleaning the work area is like bathing. It relieves stress and strain, removes sweat and dirt, and prepares the body for the next day. The third stage of 5S is keeping everything clean and swept. This maintains a safer work area and problem areas are quickly identified. An important part of “shining” is “Mess Prevention.” In other words, don’t allow litter, scrap, shavings, cuttings, etc., to land on the floor in the first place. Copyright OpenSourceSixSigma.com

STANDARDIZING – Creating Consistency Definition: To maintain the workplace at a level that uncovers problems and makes them obvious. To continuously improve your office or facility by continuous assessment and action. Why: To sustain sorting, storage and shining activities every day. Things to remember We must keep the work place neat enough for visual identifiers to be effective in uncovering hidden problems. Develop a system that enables everyone in the workplace to see problems when they occur. The fourth stage of 5S involves creating a consistent approach for carrying out tasks and procedures. Orderliness is the core of “standardization” and is maintained by Visual Controls which might consist of: Signboards, Painted Lines, Color-coding strategies and Standardizing “Best Methods” across the organization. Copyright OpenSourceSixSigma.com

SUSTAINING – Maintaining the 5S Definition: To maintain our discipline, we need to practice and repeat until it becomes a way of life. Why: To build 5S into our everyday process. Things to Remember Develop schedules and check lists. Good habits are hard to establish. Commitment and discipline toward housekeeping are essential first steps toward being world class. This last stage of 5S is the discipline and commitment of all other stages. Without “sustaining”, your workplace can easily revert back to being dirty and chaotic. That is why it is so crucial for your team to be empowered to improve and maintain their workplace. Keeping a 5s program vital in an organization creates a cleaner workplace, a safer workplace, it contributes to how we feel about our product, our process, our company and ourselves, it provides a customer showcase to promote your business, product quality will improve – especially by reducing contaminants and efficiency will increase. When employees take pride in their work and workplace it can lead to greater job satisfaction and higher productivity. Copyright OpenSourceSixSigma.com