1. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma Chapter 1

2. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma “The longer an article is in the process of manufacture and the more it is moved about, the greater the ultimate cost.” Henry Ford

3. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma Lean tools and techniques are used to standardize work and remove waste and non value-added activities. Six Sigma tools and techniques are used to attack the variation present in processes.

4. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma Lean Benefits: –Reduced cycle times –Lower handling costs –Faster lead times –Decreased floor space usage –Lower inventory with greater inventory turns –Improved customer responsiveness and service –improved quality –Higher profit margins

5. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma Lean thinking is a mindset best described as a relentless war on waste.

6. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean seeks to eliminate seven sources of waste: –Overproduction –Idle time waste (waiting time/queue time) –Delivery waste (transport/conveyance waste) –Waste in the work itself –Inventory waste –Wasted operator motions –Waste of rejected parts

7. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean thinking generates process improvement by following five key steps: –1. Study the process by directly observing the work activities, their connections and flow. –2. Study the process to systematically eliminate wasteful activities, their connections and flow.

8. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean thinking generates process improvement by following five key steps: –3. Establish agreement among those affected by the process in terms of what the process needs to accomplish and how the process will accomplish it. –4. Attack and solve problems using a systematic method. –5. Integrate the above approach throughout the organization

9. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean tools include: –Kaizen –Value stream process mapping –5 S –Kanban

10. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean tools include: –Error proofing –Preventive and predictive maintenance –Setup time reduction –Reduced lot sizes

11. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Methodology Lean tools include: –Line-balancing –Schedule leveling –Standardized work –Visual Management

12. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Origins Bill Smith, Reliability Engineer, Motorola Corporation –The increasing complexity of systems and products used by consumers created higher than desired system failure rates. –Holistic approach to reliability and quality and developed a strategy for improving both (1988).

13. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Methodology Six Sigma is a structured, data driven methodology for eliminating waste from processes, products, and other business activities while having a positive impact on financial performance.

14. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Perceptions –Perceived to be a business system that improves the bottom line. –Perceived as fitting naturally into the business systems of most companies.

15. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Perceptions –Perceived as being more easily and more successfully launched than traditional Total Quality Management programs. TQM perceived as technical system owned by technical specialists.

16. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Comparison with Quality Systems Six SigmaQuality SystemsHighly focused problem-solving system DMAIC PDSA Focus on profitsFocus on improving organizational performance including profit Tools include SPC, DOE, FMEATools include SPC, DOE, FMEA, Project management,capability studies, benchmarking, Benchmarking. Theory of constraints 3.4 defects/millionProcess capability Focus on metricsMeasures of Performance

17. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Benefits Benefits of adopting the Six Sigma methodology –Enhanced ability to provide value to customer –Enhanced understanding of key business processes –Reduction of waste –Improved profit performance

18. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Focus Six Sigma Methodology focuses on: –Customer knowledge Critical to Quality information –Core processes Key business processes that deliver value directly to the customer –Accurate performance measures of both

19. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Basis Six Sigma Methodology is based on: –Statistical Process Control Techniques –Data Analysis Methods –Project Management Techniques –Systematic Training of Participants

20. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Six Sigma is data driven and profit focused.

21. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma The goal of Six Sigma is to reach 3.4 defects per million opportunities over the long term.

22. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Six Sigma seeks to reduce the variability present in processes.

23. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma SigmaDefects per million opportunities Yield 1690,00030.90% 2308,00069.20% 366,80093.30% 46,21099.40% 532099.98% 63.499.9997%

24. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma An improvement of just 1 sigma can result in a ten-fold reduction in the number of defects –At three sigma, 66,800 defects per million costing $10/piece to fix = $668,000 –At four sigma, 6,210 defects per million costing $10/piece to fix = $62,100

25. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Projects Six Sigma projects are selected based on their ability to contribute to and enhance an organization’s financial performance.

26. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Projects Six Sigma projects seek out sources of waste (overtime, warranty claims, production backlogs, customer issues).

27. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Projects Six Sigma projects have five phases: –Define –Measure –Analyze –Improve –Control (note similarity to PDSA)

28. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Participants Six Sigma Project Participants –Green Belts training complete a cost-savings project ($10,000+) –Black Belts training (more advanced) complete cost-savings projects ($100,000+) –Master Black Belts extensive training complete cost-savings projects ($1,000,000+)

29. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma CategoryASQ Certified Quality Engineer (CQE)Black Belt LeadershipManagement and Leadership in Enterprise-Wide Quality EngineeringDeployment Business Not coveredBusiness Process Processes ProcessesManagement Quality Quality Systems Development, Not Covered Systems Implementation, and Verification QualityPlanning, Controlling, and Assuring Not Covered Assurance Product and Process Quality ReliabilityReliability and Risk Management Not Covered Problem-Problem-Solving and Quality ImprovementDefine-Measure- SolvingAnalyze-Improve-Control Quality ToolsProblem-Solving and Quality Improvement DMAIC Project Not CoveredProject Management Team Not CoveredTeam Leadership Concepts StatisticalProbability and StatisticsProbability and MethodsCollecting and Summarizing DataStatistics Collecting and Summarizing Data Design ofDesigning ExperimentsDesign of Experiments Experiments Process Analyzing Process CapabilityAnalyzing Process Capability Capability StatisticalStatistical Process ControlStatistical Process Control Process Control Measurement Measurement SystemsMeasurement Systems SystemsMetrologyMetrology (metrology/calibration) Lean Not CoveredLean Enterprise Manufacturing Other TechniquesFMEA, FMECA, FTFMEA, QFD Multi-Variate Studies Body of Knowledge Comparison of CQE and Black Belt Certification

30. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Six Sigma Acronyms APQPAdvanced Product Quality Planning CTQCritical to Quality DFSSDesign for Six Sigma DMAICDefine, measure, analyze, improve, control DPMODefects per million opportunities DPU Defect per unit FMEAFailure Modes and Effects Analysis KPIVKey process input variable KPOVKey process output variable Process OwnersThe individual responsible for the process and what it produces Reliability measured as mean-time-to-failure Quality measured as process variability and defect rates

31. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Methodology In order to successfully adopt the Six Sigma methodology, an organization must have: –Visible management commitment –Visible management involvement –Clear definition of customer requirements –Understanding of key business processes –Sound measures of performance –Discipline –Rewards

32. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma A point to consider: –Six Sigma focuses on defects while other quality improvement methodologies emphasize non-conformances. A subtle, yet important distinction, especially in the legal sense.

33. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Six Sigma Another point to consider: –When the organization say no more improvement is possible. Remember Six Sigma has a two pronged approach: –Fix the existing problems –Design Six Sigma into processes, products and services.

34. Lean Six Sigma: Process Improvement Tools and Techniques Donna C. Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458. All Rights Reserved. Lean Six Sigma Lean Six Sigma is about results –Enhancing profitability through elimination of waste and reduced variability.