1. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction

2. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 1 The Breakthrough Strategy ® And The Improve Phase 1.Select Output Characteristic 2.Define Performance Standards 3.Validate Measurement System 4.Establish Baseline Process Capability 5.Define Performance Objectives 6.Identify Variation Sources 7.Screen Potential Causes 8.Discover Variable Relationships 9.Establish Operating Tolerances – Implement Improvements 10.Validate Measurement System 11.Determine Final Process Capability 12.Implement Process Controls Setup Reduction is key to the improve phase but could also be applied in Steps 4 and 6 As it can be useful in establishing the baseline capability, it also clearly applies to Step 11

3. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 2 Module Objectives By the end of this module, the participant will be able to: Define Setup Reduction Explain the importance of Setup Reduction Understand Setup Reduction rationale Explain components which drive Setup Reduction Utilize Setup Reduction techniques to minimize equipment/process downtime associated with changeover Describe the steps to reduce changeover time 123456789101112 DMACI

4. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 3 Team based improvement activity Systematic approach to significantly reduce setup and changeover time Maximize the amount of time a given process or piece of equipment is up and running Minimize the time it takes to change from one process to another What Is Setup Reduction? $$$ Time is Money $$$ Example: How well does your organization transition from one shift to the next?

5. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 4 Setup Reduction provides us with the opportunity to changeover a process more frequently, which… Creates smaller batch sizes Which lowers required inventory Which allows for better quality control Which reduces waste and Provides greater flexibility to Reduce lead time and Provide On-Time Delivery Setup requires understanding the true changeover time, identifying and classifying tasks, and moving as many tasks before or after the actual changeover as possible. Why Is Setup Reduction Important? …ultimately gives us a competitive advantage.

6. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 5 Setup Reduction In A Retail Environment Reduce time required to change from one process or activity to the next Examples: Changing shifts (shift end cash out and start-up of next shift) Changing out shelf/floor displays Changing various condiments/fountain drink supplies Opening/closing stores Changing prices Filling prescriptions Restocking shelves Replenishing inventory Designing/Planning/Publishing advertisements

7. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 6 Setup Reduction Rationale Competitive Advantage Increase Equipment Utilization Increase Equipment Utilization Reduce Overtime Shorten Lead-times Smaller Batch Sizes Lower Setup Times More Frequent Setups Increase Capacity

8. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 7 Reducing Batch Sizes Total Cost Curve Set-Up or Ordering Cost Holding Cost Inventory EOQ EBQ Batch Size Minimum Total Cost $ Based upon individual equipment costs not overall customer demand Simple trade-off Equal Order Quantity (EOQ)/Equal Batch Quantity (EBQ) minimum cost point between setup and inventory holding

9. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 8 Total Cost Inventory Holding Cost Original EBQ Batch Size Minimum Total Cost Reduced Changeover Costs Updated EBQ Case For Reduced Batch Sizes Batch size could significantly impact costs.

10. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 9 Balancing Setup Time vs. Cost Inventory holding cost should include the opportunity cost of all problems that inventory masks Setup time and cost (including ordering costs) can be reduced by applying skill Does it make sense to carry a large inventory of meats at a grocery store? Result: Small batch quantities are economically justifiable.

11. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 10 Process Areas Of Focus Queue RunWaitMove Cycle Time Components for a Single Operation. Required Activity Queue, Wait, and Move are the easiest components to minimize (Remember: This is defined as “waste”) Actual time consumed is inherently decreased proportional to the reduction in batch size Setup time reduction typically requires a focused effort Setup

12. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 11 Changeover Reduction Multi-Disciplinary Approach Resource allocation problems; Work activity tracking issues First off and batch testing activity Tool handling and service activity Work handling activity new material control Training Equipment Maintenance Quality Tool service Materials Human Resources Operation Control Setup Process Problems Driven By Setup Wear and tear problems

13. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 12 Prepare Organize Transfer Prepare Organize Transfer Attach Detach Adjust Test Attach Detach Adjust Test Examples: Remove work-piece Remove tools Remove guarding Adjust locations Test workplace Internal vs. External Activities External Activities Internal Activities Tasks which require the equipment/process to be stopped. Tasks which can be done as the process runs the previous job. Examples: Retrieve materials Retrieve tools Prepare tools Clean up Organize and Plan

14. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 13 Setup Reduction High-Level Approach External InternalExternal 1. Separate internal from external time Internal External 2. Convert internal time to external time 3. Reduce all remaining time

15. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 14 0 5 10 15 20 25 30 35 40 45 50 Check Organization Installation and Removal Locating What We Need Adjustment of Settings Final Adjustments % of Total Changeover Time Typical Changeover Time Allocation By Task Grouping

16. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 15 Setting An Improvement Target Observe the setup process (internal/external) Videotape where possible Record problems/ideas Brainstorm/analyze each element Identify opportunities for improvement Determine how much improvement is necessary to meet the goals of the project Communicate improvement targets

17. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 16 Preliminary Stage Determine business need for change Establish appropriate performance measures Assess potential obstacles/conflicts Identify bottlenecks, for starters Establish task force team including process owner Communicate objectives Train individuals For a clear path to success in process improvement, setting the stage is very important!

18. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 17 Steps To Setup Reduction 1.Document Current Process 2.Separate Activities (Internal vs. External) 3.Shift Activities from Internal to External 4.Locate Parallel Activities 5.Streamline Activities 6.Implement Improvement Plan 7.Validate Procedure/Verify Results 8.Document “New” Procedure 1.Document Current Process 2.Separate Activities (Internal vs. External) 3.Shift Activities from Internal to External 4.Locate Parallel Activities 5.Streamline Activities 6.Implement Improvement Plan 7.Validate Procedure/Verify Results 8.Document “New” Procedure

19. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 18 Steps -Record each work element by sequence and time taken (Setup Documentation Form, Appendix B) -Classify each element by category -Pareto analysis to rank categories -Prioritize elements/categories for reduction Techniques -Stopwatch/traditional work-study techniques (potentially inaccurate) -Video tape recording (accurate, repeatable, irrefutable, comprehensive, interactive) -Observation/discussion (to identify exceptional circumstances) Critical Success Factors -Open study -Non-critical -Operator involvement, understanding and ownership Step 1: Document Current Process

20. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 19 Setup Documentation Form 2466REALa_Set_Up_Documentation_Form.xls (see also Appendix)

21. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 20 Prepare Organize Transfer Prepare Organize Transfer Attach Detach Adjust Test Attach Detach Adjust Test Examples: Remove work-piece Remove tools Remove guarding Adjust locations Test workplace External Activities Internal Activities Tasks which require the equipment/process to be stopped. Tasks which can be done as the process runs the previous job. Examples: Retrieve materials Retrieve tools Prepare tools Clean up Organize and Plan Step 2: Separate Internal And External Activities

22. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 21 Each element of the internal setup should be examined and if possible be converted to an external function. Obvious Targets: Preparation Pre-loading of information Pre-setting of materials and functional dimensions/elements Using intermediary devices Using aids Using computer based organized tool/fixture/part storage Prepare for Operating Conditions in Advance Step 3: Shift Internal Activities To External

23. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 22 Parallel activities are independent of each other and can be performed simultaneously Changeover time can be reduced by more than half by doing jobs in parallel A team approach is necessary to accomplish activities in parallel Step 4: Locate Parallel Activities Internal External

24. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 23 1.Parallel Operations 2.Location and adjustment “Single Action Location” “Adjustment elimination” 3.Tool Clamping “One turn attachment” 4.Process “Adjustment reduction/elimination 5.Guarding Positive location to fixed points Standardized “functions” dimensions Location lines/gauges/positioning Fool proofed orientation Easy movement of equipment/material (rollers, quick connects) Minimized clamping/securing points Standardized holding devices Split threads, U-washers, hollow sleeves Standardized “functional” tool dimensions Positive location to gauges Marked dials/levers Minimized/standardized securing Step 5: Streamline Internal/External Activities

25. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 24 6. Transport 7. Workplace organization 8. Planning and Organization On line material/tool storage Roller conveyors Adjustable height tool trolleys Standardized hand tools Color coding hand tools Simple controls to coordinate external activities Step 5: Streamline Internal/External Activities (Cont’d)

26. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 25 Step 6: Implement the Plan And Chart Progress Test procedure Determine the total time for the longest internal procedure Implement Changes Compare the changeover time before (baseline) and after changes were implemented Verify Results Graph the Results Changeover Improvement Progress Charting of Each Set-Up of Improvement Appendix Time Current State NewTest Date Do the changes truly improve the changeover time? 2466REALa_Set_up_reduction_chart.xls (see also Appendix)

27. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 26 Validate procedures Verify results to assure objective is met Make adjustments, if necessary Communicate improvements Step 7: Verify Results

28. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 27 Document new procedures External steps Internal steps Parallel activities Step #8: Document Procedure Internal External 2 21 1 43 Internal Checklist 1.Power down 2.Load Material 3.Make adjustments 3In Production External Checklist 1.Gather materials 2.Premix materials 3.Put away tools 4.Clean area In Production Internal Setup

29. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 28 7. Validate Procedure/Verify Results Setup Reduction Continuous Cycle 4. Locate Parallel Activities 3. Shift Internal Activities to External 5. Streamline Internal/External Activities 6. Implement the Plan 8. Document New Procedure 2. Separate Internal and External Activities 1. Document Current Changeover Elements DO PLAN CHECK ACT

30. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 29 History of Setup Reduction on Retail Store Displays Large reductions possible just through separation of external and internal activities with zero cost. Smaller gains through detailed study and focused investment. 321321 5/37/238/138/3010/910/2511/911/1012/82/3 >3 hours 1.5 hours 2 hours 1.3 hours 40 min. 80 min 3535 3030 2525 8 Date Setup Time (hours) Improvement of internal setup. Continuous Improvement Target Continuous Improvement

31. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 30 Key Learning Points

32. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 31 Objectives Review The participant should now be able to: Define Setup Reduction Explain the importance of Setup Reduction Understand Setup Reduction rationale Explain components which drive Setup Reduction Utilize Setup Reduction techniques to minimize equipment/process downtime associated with changeover Describe the steps to reduce changeover time

33. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved APPENDIX: Forms

34. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 33 Setup Documentation Form

35. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 34 Setup Reduction Chart HOURSHOURS CHANGEOVER OCCURRENCES 8 7 6 5 4 3 2 1 8 7 6 5 4 3 2 1

36. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 35 Trademarks And Service Marks Trademarks of Six Sigma Academy: Breakthrough Design Breakthrough Software Design Breakthrough Diagnosis Breakthrough Execution Breakthrough Lean ® Breakthrough Sigma Lean Breakthrough Six Sigma Breakthrough Strategy ® Breakthrough Value Services ® FASTART INTELLEQ METREQ WE WEAVE EXCELLENCE INTO THE FABRIC OF BUSINESS Six Sigma is a federally registered trademark of Motorola, Inc. SigmaFlow is a trademark of Compass Partners, Inc. MINITAB is a trademark of Minitab, Inc. VarTran is a trademark of Taylor Enterprises

37. Copyright © 2000-2004 Six Sigma Academy International LLC All Rights Reserved Setup Reduction Pg 36 Six Sigma Academy www.6-sigma.com US Tel: (480) 515-9501 US Fax: (480) 515-9507 International Tel: +44-1403-783456 International Fax: +44-1403-218788 8876 E. Pinnacle Peak Road, Suite 100 Scottsdale, AZ 85255