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Lean Six Sigma Fundamentals Training Classroom Logistics Safety Exit routes and emergency procedures of the facility Safety hazards Logistics Location of restrooms, soda machines, LAN access, etc. Courtesy and Respect Turn off all cell phones and computers during class Be engaged and participative TRAINING Objectives To provide participants with an awareness of: Lean Six Sigma Lean Six Sigma Principles Kaizen Events Lean Six Sigma (LSS) A systematic approach of identifying and eliminating non-value-added activities through continuous improvement. Built on the premise that the lowest cost and highest velocity is achieved when quality is at its highest. This includes quality of all business processes and services, not simply product quality. It maximizes employee involvement to solve problems and improve processes. Relentless focus on elimination of waste and creating greater customer value. Producing what is needed, when it is needed, with right amount of materials, equipment, labor, and space Lean Six Sigma (LSS) Why Lean Six Sigma (LSS)? LSS focuses on customer value keeping us competitive in the long-term horizon. Effective LSS initiatives empower employees and build trust within the company. LSS provides a common sense approach to continuous improvement that focuses on waste elimination. LSS extends beyond manufacturing and is applied to all processes or functions. A successful LSS journey will have significant impact on an organizations performance. Lean Six Sigma Philosophy Too early Too late Delivery Time Too early Too late Delivery Time Defects Too late? Missed sales. Lost revenue, lost customers Defects Too early? Too much inventory on handAsset costs too high! Rath & Strong, 2000 Y = f(x) Focus of LSS The process equation is fundamental to Lean Six Sigma concepts and methods. It represents a process with “Y” as the outputs and “x” as the inputs. The goal is to meet customer requirements. To improve, we must understand the xs of our process. Y x Y = f(x) OUTPUTS INPUTS & PROCESSES The Process Equation Lean Six Sigma Results Your Project Goal Move The “Y” Question: How Should The “Y” Move ? Project Y Examples Cycle Time Quality Cost Delivery Time End of Project Baseline Period Kaizen & DMAICL Project Life Cycle Y USL Potential Impact of Lean Six Sigma Inventory Reductions 10-50% Free Up Floor Space 10-50% Increase Turns 30-100+% Productivity Gains 12-50% Lead Times Cut 30-70% Product Cycle Reduced 15-40% Benefits of Lean Six Sigma Eliminate waste daily Learn by doing Encourage innovation keep stretch goals Work toward zero defects Know and show baseline / current measurements Drive step function improvements Continuously improve daily Involve people early Employee Expectations Participate on LSS project teams Participate business processes Follow pate in creation and/or deployment of common and support the companys common business processes, once implemented Use defined process modules and tools in day-to-day activities Incorporate Lean Six Sigma methodology Training for all employees over the next year on Lean Six Sigma Fundamentals Workplace Organization Sifting, removing everything from your work place that is not required to do the job. Sorting, Establishing a semi-permanent location for all required objects in the workplace Sweeping and Washing, cleaning the workplace to eliminate all dirt and rubbish Spic and Span, The result of the first three Ss Self Discipline, The most difficult of the Ss. Requires constant vigilance to maintain the accomplished levels of Spic and Span 5 S Becoming Waste Conscious The 7 Elements of Waste Over production Correction Inventory Processing Conveyance Motion Waiting Overproduction Producing goods at a rate faster than required or producing more than is required. Overproduction leads to increased levels of all other types of waste. Correction The quality of our product can only be as good as the quality of the worst component, (remember the RTY calculation). The waste in our process is magnified by the cost associated with correcting the defect as well as the costs associated by delaying further production while waiting for the correction The waste of correction is often amplified by overproduction. Not only have we generated the mistake once, but unknowingly we have generated the same defect multiple times. Inventory $ Inventory costs money. As we build excess inventory to accommodate problems in our process, the costs escalate. Safety stock levels are driven by downtime, quality problems, supplier delivery problems, line imbalances etc. Lowering the amount of in process inventory forces us to improve our processes. Processing Everything we do in our organization is part of a process. However We sometimes OVER PROCESS. We use systems and tools that are really the equivalent of using a surgeon to remove a splinter. Remember, resources cost money and when we over process, we use the organizations resources that are not required. WASTING RESOURCES Conveyance $ $ $ $ $ $ $ $ $ EVERY TIME, you move a part, you add cost to that part. Unfortunately, the added cost does not translate to added value. We cannot charge our customer more because we have shuffled our products around the plant or around the world. We must MINIMIZE conveyance in order to preserve our product margins. Motion Waste of motion can occur in many forms. People moving to gather needed tools and components to perform their work. Movement of equipment that adds no value like machining “air cuts”, multi-spindle indexes etc. In most cases, just recognizing the opportunity is the most difficult part of reducing this waste. Waiting We cannot wait in line anywhere without growing impatient. EXCEPT When we are at work. It is often with a sigh of relief that we accept a waiting period at work. Waiting for “batch produced” WIP from a previous process. Waiting for a document from a previous department. Waiting for inventory (raw components) to be delivered etc All types of waiting cost $ To minimize waste we must see out opportunities to eliminate the waste of waiting. Remember The waste of waiting is 100% waste, whenever it is identified the cost is reduced by ALL of the amount of wait time you have eliminated. Adapted from Womack, J. P. and D. T. Jones, 1996, Lean Thinking, Simon & Schuster. Lean Six Sigma Principles 1) Specify value in the eyes of the customer 2) Identify the value stream and eliminate waste 3) Make value flow at the pull of the customer 4) Involve and empower employees 5) Continuously improve in pursuit of perfection Lean Six Sigma Principle One Defining Value Recognizing Value Value Add vs. Non-Value Add Importance of Value Value Value Stream Flow/Pull Empowerment Perfection How Value is Defined Value is defined by the end customer. to meet customers needs at a specific price at a specific time. when expressed in terms of a specific product or service. To understand value, we must have dialogue with specific customers. How to Recognize Value Value is provided when a quality product or service is delivered that meets the customer requirements, within the customer response time, in the proper quantity, with minimal waste and at the right price. Value Added vs. Non-Value Added Activity Value-Added Activity: an activity that adds value from a customer perspective. a) Customer is willing to pay for activity or service b) The activity physically transforms the product or service offering c) Activity is performed correctly first time Non-Value-Added Activity: Activities in a process or service that neither add value to a product or service, nor enable other value added activities. These activities take time, resources, and/or space, but do not add value to the product or service from a customer perspective. Some of these activities are necessary and unavoidable, but nonetheless still considered waste. (e.g. Inspection) Value must be defined by the end customer. Ingersoll Rand people are always value added. Why focus on value? Customers have choices in the marketplace. Purchasing decisions are based on a combination of factors: Price Quality Delivery Durability Brand Etc. Global competitors look for the optimal combination of these factors to maximize customer value. If we fail to consistently focus on maximizing customer value, our share of the market will erode. Value Value Stream Flow/Pull Empowerment Perfection Lean Six Sigma Principle Two Value Streams Wastes Importance of Focusing on Inventory Value Stream Mapping Customer ValueINFORMATION FLOW PRODUCT/SERVICE MATERIAL FLOW Finance Market & Sales Design Order Entry Suppliers Sub Assy Mfg Assembly A Value Stream What is a value stream? All the activities from customer order to cash. The eight ways we waste 1. Transportation multiple handling, delay in material handling, unnecessary handling 2. Inventory up or implementing employee ideas or suggestions. 3. holding or purchasing unnecessary raw material, WIP and finished goods 4. Motion actions of people or equipment that do not add value 5. Waiting time delays, idle time, non-value added time 6. Over-production producing over customer requirements, producing unnecessary materials/ products 7. Over-processing unnecessary processing steps or work elements. Procedures 8. Defects producing a part that requires rework or is scrapped 9. Unused Creativity not following Employees and Waste Waste is an activity. Employees are never considered waste. At times some wasteful activities are required until the current process can be improved. The intent of Lean Six Sigma is to redefine our processes so that everyone spends more time on value added activities. This increases value to our customers as well as our own competitiveness in the global marketplace. Importance of Focusing in Inventory Inventory turns can be used to measure the velocity of a process. Other wastes usually result in excess inventory. As wastes are eliminated and inventory reduced, the velocity of the process will increase. This means higher value for our customers at a lower cost for Ingersoll Rand. Inventory Examples Retained E-Mails Unprocessed Orders Paperwork Raw Materials & Parts Finished Goods Quotes Awaiting Approval Job Applications Open Purchase Orders Uncommunicated Ideas Inventory is a Key Lean Six Sigma Indicator Lead /Cycle Time Inventory/ Batch Size 100 50 0 Sea of Inventory/WIP Poor Scheduling Line Imbalance Long Transportation Long Setups Defects Inventory Hides Problems: Manufacturing Process Inventory is like a river, when water level is lowered, boulders must be dealt with Lead /Cycle Time Inventory/ WIP100 50 0 Sea of Inventory/WIP Waiting Overload Multiple Approvals Data Streams Errors Inventory Hides Problems: Transactional Process Inventory is like a river, when water level is lowered, boulders must be dealt with Data/System Invoice One process is taking longer than the rest Vacation scheduling. Poor synchronization. Errors in data. Incomplete data. Wrong discount. Gathering data takes too long. Inputting takes too long. Sending forms from one location to the next for approval Multiple Value Stream of a Carton of Cola Incoming Storage Processing Time Finished Storage Mine Reduction Mill 2 wks 20 min 30 min 2 wks 2 wks Smelter 3 mos 2 hrs 2 wks Hot Rolling Mill 2 wks 1 min 4 wks Cold Rolling Mill 2 wks 1 min 4 wks Can Maker 2 wks 1 min 4 wks Can Warehouse 1 wk Bottler 4 days 1 min 5 wks Bottler Warehouse 1 wk Tesco Warehouse 3 days Tesco Store 2 days Total 144 days 3 hrs 180 days Total Value Stream = 324 days Value add = 3 hours VA/NVA = 0.04% Current State Future State Ideal State No Action It is not uncommon to realize a 50 - 70% reduction in processing time ! Value Stream Mapping 324 Days Inventory 3 Hours Processing 150 Days Inventory 3 Hours Processing 15 Days Inventory 3 Hours Processing (where you are now) (3-6 month target) (all value, no waste) 324 Days Inventory 3 Hours Processing Value Value Stream Flow/Pull Empowerment Perfection Lean Six Sigma Principle Three Flow/Pull Definition Principles Examples Prerequisites The progressive achievement of tasks along the value stream so that a product proceeds from design to launch, order to delivery, and raw materials into the hands of the customer with no stoppages, scrap, or back flows. What is Flow/Pull? Before Flow After Flow Only Value Added Steps/time Balanced flow No Scrap/Rework No Back Flows No Stoppages Continuous Flow Flow/Pull Principles Process A Process B Process C Process D Flow/Pull Principles Look at the Entire Process Match Output Output to Customer Demand. Reduce Variation Within the Process. Identify Opportunities to Eliminate Waste. Balance the Line. Create a Continuous Flow. Utilize the Smallest, Cost Effective Quantity (Lot Size). Ideal State: Push vs. Flow/Pull Systems Push system resources are provided to the consumer based on forecasts or schedules. Flow/Pull system a method of controlling the flow of resources by replacing only what has been consumed. Push System Changes in Demand All processes must be rescheduled simultaneously. In a “Push” System upstream processes supply material as produced not necessarily as needed Traditional “Push” System Changes in Demand UpstreamDownstreamCasting Machining Assembly Final Material Flow Flow/Pull System Changes in Demand Continual update of upstream processes with pull signals. In a “Flow/Pull” System downstream process signal the need for, or pull material from upstream processes. Lean “Flow/Pull” System Changes in Demand UpstreamDownstreamCasting Machining Assembly Final Material Flow Pull Signals Prerequisites for Flow/Pull Systems For JIT/Pull systems to be successful, other LSS Concepts are needed: Quality at the source (Zero defects) Poka-yoke (Fail safe tools and methods) Preventive maintenance (TPM) Good housekeeping (5S) Set-up time reduction (SMED) Waste elimination Flow/Pull systems typically utilize some form of Kanban (visible record), which is the fundamental activity control in a lean system Value Value Stream Flow/Pull Empowerment Perfection Lean Six Sigma Principle Four LSS Culture Importance Employees Responsibility Benefits to Employees What a Lean Six Sigma Culture Looks Like Everyone knows what the goals are for the process, leading to more alignment and better communications. Teams continuously monitor how well their process is performing towards the goals. Problems are identified within the process. Processes are managed visually; both in the factory and in the office. Process improvements can be initiated by anyone and are happening all the time. People talk about eliminating wastes on a daily basis. More focus on process improvement versus disciplinary action. Employees Responsibility for LSS Work to achieve world class process performance in: Safety Quality Delivery Cost Become agents of change Prefer change over failure to seek change Implement radical change followed by continuous improvement Give ideas, look at what you do Participate in LSS projects when requested ALL EMPLOYEES Benefits to Employees LSS provides the following benefits for employees: Standardizes the way we work, thereby reducing conflict and increasing alignment with management. Allows employees to express and incorporate ideas on how to do their jobs better. Seeks to balance work between processes. Fosters a team environment and a sense of common purpose. Helps to ensure we have the proper tools to do our jobs. Whats in it for me? Value Value Stream Flow/Pull Empowerment Perfection Lean Six Sigma Principle Five Execution Projects Kaizen DMAICL Sustainment Once a future state value stream map has been developed for a process, LSS projects must be completed to reduce waste and methods must be implemented to sustain the gains. Lean Six Sigma Execution Value Stream Mapping Lean Six Sigma Projects Sustainment Value Stream Identification Continuous Types of Lean Six Sigma Projects Kaizen Events Used to achieve continuous improvement All employees are able to participate Events last a few hours to several days Basic toolset DMAICL Projects Used to achieve breakthrough performance of processes Projects led by Black Belts and Green Belts Projects generally last two to six months Statistical and project management toolset Lean Six Sigma Projects PROBLEM COMPLEXITYKAIZEN EVENTS GB PROJECTS BB PROJECTS EMPLOYEE INVOLVEMENT Black Belts Green Belts Everyone The Kaizen Event is a tool that empowers people to achieve rapid, tangible results. The process combines people, material, and equipment improvements to drive bottom-line results. Kaizen is Action Oriented! Kaizen Event Importance of Kaizen Events Kaizen events enable project teams to quickly drive improvement in all areas of the business. Kaizen events can obtain significant and measurable results in just a short amount of time Kaizen events involve the knowledge and experience of all associates to drive excellence Kaizen tools learned in these events are applicable across the enterprise Typical Results from Kaizen Events Reduced Distance Traveled - 30-40% Less Indirect Labor Hours Labor Productivity 25-30% Improved Ergonomics Less Rework and Scrap Less Inventory 50-60% Increased throughput Overtime Reduction Red
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