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SynergyofSixSigmaandLeanLean6sigmaintroduction2
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34.13%34.13%2.1%2.1%13.6%13.6%68.3%95.5%99.7%LearningObjectivesUnderstandthesynergyofleanandsixsigmaasapowerfulbusinessperformanceimprovementprogramUnderstandhowleanandsixsigmacomplementeachother>>WhyIsEveryFirmDriventoBoth
QualityandLeadTimeReductionGoals?CustomerloyaltyandretentionShortercustomerleadtimeDownwardpricepressure:lowercostsLowerinvestedcapitalCapacityexpansion><>LeanAppliedintheDMAICMethodology
ProvidesaPowerfulStructureSixSigmahasgivenLeanadditionalfocus:EffectofVariabilityDMAIC(Define-Measure-Analyze-Improve-Control)structureImprovementinfrastructureVoiceoftheCustomerFocusonQualityLeanhasgivenSixSigmaadditionaltools:Analyze/MeasurePhase:ValueStreamMapping,TimeTrapAnalysisImprovePhase:Kaizen,PullSystems,SetupReductions,Work-Cells,ProcessBalancing,etc.ControlPhase:TaktBoards,StandardWork,Metrics&Dashboards,5S><>DMAICMethodologyandLeanD M A I CDefine Measure Analyze Improve Control%ApplicabilityofLeanToolSetLeantoolsapplicableinallphasesofDMAIC,butpeakinAnalyzeandImprovephasesLeantoolsapplicableinallphasesofDMAIC:SixSigmaandLeanSixSigmaprovidesa“UnifyingFramework”SixSigmaprovidestheover-ridingmethodology(DMAIC)SixSigmaprovidestheimprovementinfrastructureSixSigmaprovidestheburningplatformforimprovementLeanprovidesimprovementtoolsandfast-attackapproachto“turbo-charge”improvementefforts><>AICMDLEAN6SIGMAProcessqualityplanQuantifyprojectgainss=3.7Cp=1.4LISLSSs=2.7Cp=0.4EventsCycleAICProductionAICSupportfunctionsAICDocumentation&StandardisationBuildongainsLearningContinuousmonitoringPerpetuatechangesControlHowlongwilltheImprovementslast?ContinuousmonitoringPerpetuatechangesMeasureWhatcriticalparameters,whatisthecurrentlevelofperformance?EvaluatepresentprocessperformanceViewdataDetermineextentofwasteProcessdurationIE/OEEWhatcauses,whatinteractions?AnalyseProcessDataIdentifyproblemsandPotentialcausesCauseandEffectDeterminerootcausesIdentifyandquantifywasteMetaplanVA/NVA...........................................................................Innovate&ImproveWhatimprovementsandwhatimplementationprocedure?RestoretokeyplayersPreparedeploymentImplementationscheduleSetupthenewprocessMADC/AIC/ArchitectureRiskanalysisMeasuretheimpactDefinesolutionsSimplifiedflowchartJustinTimeProcessProblemsObjectivesTheperimeterProjectsheetProblemdefinition:
Objective:
Justification:
Extentofimpact:
Expectedrepercussions:
Projectstages:DefineWhatneedsandrequirements?QualityLevelofserviceEcoPerformanceProcessusCLENSIOutputTPROVIDE
DInputTheprocessinvolvedSIPOCCustomer
requirements><>WhyIntegrate?“WeknewwewantedtohaveSixSigmaTools,thatwasclear.ButwealsodecidedthatwhatreallymakeschangeinafactoryaresomeoftheLeantools.Puttinginapullsystem,reducingbatchsizes,significantlychangingsetuptimes,allofasuddeneverythingstartstoflow. Thosearethetypesofthingswesawovertimethatrealmadeadifferenceinourfactoriesandsowesaidthathastobeapartofthistraining.” – LouGuiliano,ITTIndustriesCEO
onintegratingleantechniquesinto ITT’sSixSigmaRolloutSixSigmaandLeanIntegration><>TheAnswerInthe2000AnnualReport,WelchannouncedanewgoalforGE:reducingthevariationinlead-timewhichhereferstoas“span”.“Today,wehaveaCompanydoingitsverybesttofixitsfaceoncustomersbyfocusingSixSigmaontheirneeds.Keytothisfocusisaconceptcalled‘span,’whichisameasurementofoperationalreliabilityformeetingacustomerrequest.ItisthetimewindowaroundtheCustomerRequestedDeliveryDateinwhichdeliverywillhappen.”Lean+SixSigma><>LeanSixSigma
DMAICImprovementProcessRoadMapReviewProjectCharterValidateProblemStatement
andGoalsValidateVoiceoftheCustomer
andVoiceoftheBusinessValidateFinancialBenefitsValidateHigh-LevelValueStreamMapandScopeCreateCommunicationPlanSelectandLaunchTeamDevelopProjectScheduleCompleteDefineGateIdentifyPotentialRootCausesReduceListofPotentialRootCausesConfirmRootCausetoOutputRelationshipEstimateImpactofRootCausesonKeyOutputsPrioritizeRootCausesCompleteAnalyzeGateDevelopPotentialSolutionsEvaluate,Select,andOptimizeBestSolutionsDevelop‘To-Be’ValueStreamMap(s)DevelopandImplementPilotSolutionConfirmAttainmentofProjectGoalsDevelopFullScaleImplementationPlanCompleteImproveGateImplementMistakeProofingDevelopSOP’s,TrainingPlanandProcessControlsImplementSolutionandOngoingProcessMeasurementsIdentifyProjectReplicationOpportunitiesCompleteControlGateTransitionProjecttoProcessOwnerProjectCharterVoiceoftheCustomerandKanoAnalysisSIPOCMapProjectValuation/ROICAnalysisToolsRACIandQuadChartsStakeholderAnalysisCommunicationPlanEffectiveMeetingToolsInquiryandAdvocacySkillsTimeLines,Milestones,
andGanttChartingParetoAnalysisBelbinAnalysisValueStreamMappingValueofSpeed(ProcessCycleEfficiency/Little’sLaw)OperationalDefinitionsDataCollectionPlanStatisticalSamplingMeasurementSystemAnalysis(MSA)GageR&RKappaStudiesControlChartsHistogramsNormalityTestProcessCapabilityAnalysisProcessConstraintIDandTaktTimeAnalysisCauseandEffectAnalysisFMEAHypothesisTests/Conf.IntervalsSimpleandMultipleRegressionANOVAComponentsofVariationConqueringProductandProcessComplexityQueuingTheoryReplenishmentPull/KanbanStockingStrategyProcessFlowImprovementProcessBalancingAnalyticalBatchSizingTotalProductiveMaintenanceDesignofExperiments(DOE)SolutionSelectionMatrixPilotingandSimulationMistake-Proofing/
ZeroDefectsStandardOperatingProcedures(SOP’s)ProcessControlPlansVisualProcessControlToolsStatisticalProcessControls(SPC)SolutionReplicationProjectTransitionModelTeamFeedbackSessionValueStreamMapforDeeperUnderstandingandFocusIdentifyKeyInput,ProcessandOutputMetricsDevelopOperationalDefinitionsDevelopDataCollectionPlanValidateMeasurementSystemCollectBaselineDataDetermineProcessCapabilityCompleteMeasureGateToolsActivitiesKaizen,5S,NVAAnalysis,GenericPullSystems,
FourStepRapidSetupMethodIdentifyandImplementQuickImprovementsImproveAnalyzeControlMeasureDefine><>ApplyingtheToolsforResultsDistributionReduceVariationShifttheMean><>LeanSixSigmaIstheIntegrationofTwo
PowerfulBusinessImprovementApproaches...LeanValuestreammappingtoidentifyNonValueAddCostTimeTrapidandremoval“Pull”fromtheCustomerSetupandqueuereductionProcessflowimprovementTotalProductiveMaintenance5SFoundationsKaizenforrapidimprovement….SixSigmaManagementEngagementDedicatedInfrastructure/PeopleVoiceoftheCustomerStatisticalprocesscontrolDesignofExperimentPoka-YokeGageR&RFailureModesEffectAnalysisCauseandEffectAnalysis….Culture+Quality+CustomerSpeed+LowCost+FlexibilitySixSigmaQualityEnablesLeanSpeed(FewerDefectsMeanLessTimeSpentonRework)LeanSpeedEnablesSixSigmaQuality(FasterCyclesofExperimentation/learning)><>SixSigmaImprovesQualityofValueAddStepsSixSigmaImprovesQuality,LeanEliminates
Non-Value-AddStepsintheValueStream–
BothAreRequiredtoReducetheCostofProcessComplexity#ofSteps±3s±4s±5s±6s1
93.32%
99.379%
99.9767
99.99966%7
61.63
95.733
99.839
99.997610
50.08
93.96
99.768
99.996620
25.08
88.29
99.536
99.993240
6.29
77.94
99.074
99.9864OverallYieldvs.Sigma(DistributionShifted±1.5s)Source:SixSigmaResearchInstitute,MotorolaUniversity,Motorola,Inc.LeanReducesNon-ValuedAddStepsLeanSixSigmaDrivesQuality,SpeedandCostSimultaneously><>TheLeanSixSigmaSecretTheprincipalLeanSixSigmainsightisthat:Materialspends95%ofitstimewaiting,creatingoverheadcost80%ofthewaittimeisduetoTimeTrapscausedby
20%oftheactivitiesTheycanbefoundusingTimeTrapanalysis.TimeTrapscanbeeliminatedusingLeanandSixSigmatools.LeadtimeandWIP+FinishedGoodsinventorycanbereduced50-80%Overhead+QualityCostcanbereducedby20%
Theseinsightsholdtruefor
allprocessesRawMaterialsProductionProcess8WeekTotalCycleTimeProductOrderBeforeImprovements40Days10DaysCycleTimeReduction75%ReductionAfter><>ProjectSelectionReducesNumber
ofProjectsandProvidesFocusEffortEconomicValueHighLowMedHighLowMedBeforeProjectSelectionProcessEffortEconomicValueHighLowMedHighLowMedAfterProjectSelectionProcessLeanSixSigmaKaizenProjectsBestforlowcomplexityprojectswhereknownsolution(s)canbeappliedHighbiasforactionandimplementation5dayHighSpeed“Mini”DMAICLeanSixSigmaProjectsBestforcomplexprojectswhererootcauseofproblemisnotunderstoodThoroughmeasurementandanalysispriortoimplementationTypical1to4monthprojectdurationLittle’sLaw><>EP=EconomicProfitROIC=ReturnonInvestedCapitalWACC=WeightedAverageCostofCapitalPP&E=Plant,Property&EquipmentA/R=AccountsReceivableROIC=ProfitAfterTax/InvestedCapital:DriveCostandInvestedCapitaldown,RevenueupInvestedCapital~Inventory+PP&E+A/RVoiceoftheShareholder:
PrioritizeProjectsBasedonPotentialIncreasesinROIC
><>SixSigmaandLeanArenotmutuallyexclusive
Notonlyaretheynotmutuallyexclusive,theyArecompatible
Notonlyaretheycompatible,theyArecomplementary
Notonlyaretheycomplementary,theyAreenablersofeachother
Notonlyaretheyenablersofeachother,theyAreinmanycasesnecessaryconditionsofeachother><>LeanSixSigma
Combinesthestrategy,solutionsets,culturalandorganizationalprocesses,andanalyticaltoolsofLeanandSixSigma.Withtheresultthatwe…respondtoourcustomersbetter,fasterwithlesswaste><>Exercise–CardDropSimulation><>APPENDIXATheHistoryofSixSigma><>SixSigmaHistoryMotorolawasthefirstadvocateinthe80’sSixSigmaBlackBeltmethodologybeganinlate80’s/early90’sMorerecently,othercompanieshaveembracedSixSigma:GEAlliedSignalBombardierSonyInvolvesuseofstatisticaltoolsonprojectsthatyieldhighROIProjectimplementersnamesincludes“BlackBelts”,“TopGuns”,“ChangeAgents”,and“Trailblazers”Implementersareexpectedtodeliverannualbenefitsbetween$500,000and$1,000,000through3-5projectsperyearTop-downprogramwithExecutiveandChampionsupport><>SixSigmaHistoryNobodyatGEgetspromotedwithoutSixSigmatraining.GEannualreportsstatesthatSixSigmadelivered:$300milliontoitsoperatingincomein1997$750milliontothebottomlinein1998Additionalannualreportexamples:10-foldincreaseinlifeofCTscannerx-raytubesImprovedyieldsofsuper-abrasives–worthafulldecadeofincreasedcapacitydespitegrowingdemands62%reductioninturn-aroundtimeofrailcarleasingrepairsPlasticsbusinessadded300millionpoundsofnewcapacity–equivalentto“onefreeplant”><>SixSigmaHistory“Sigma”()isaletterintheGreekalphabetDescribesvariabilitySigmaQualityLevelIndicatorofhowoftendefectsarelikelytooccurSixSigmaQualityLevelissaidtoequateto3.4PPMdefective><>WhatIsSixSigma?Theterm“Sigma”isaGreekletter(s)usedtodescribevariabilityandisanindicatorofhowlikelyerrorsaretooccur-6s-3s-2s-1sx+1s+2s+3s+6sLSLNormalDistributionCenteredUSL-6s-3s-2s-1sx+1s+2s+3s+6sCenteredNormalDistribution+/-6SigmaLimitsEffectsof1.5StandardDeviationShiftLSLNormalDistributionShiftedUSL><>CostsAreAlwaysKeptinMindThereisanoptimumqualitylevelbeyondwhichthecostsofqualityimprovementexceedtheexpectedcostsavingsfromareducednumberofdefectsCostSigmaQualityLevelOptimumImpactofQualityLevelonCost><>FrameworksofSixSigmaSixSigmaImprovements–Aligningprocessestothecustomerandoptimizingprocessperformancebysolvingproblems.DesignforSixSigma–Developnewprocesses/productsthatarecapable.BusinessProcessManagement
Maintainperformanceimprovement,whileHighlightingnewopportunitiesformakingfurtherimprovements><>RolledThroughputYield(RTY)istheprobabilitythataproductwillpassthroughtheentireprocesswithoutreworkandwithoutanydefects.RTY=Y1xY2...Yn
(n=numberofprocesssteps)4s5s6sWhySixSigmaIstheGoalForcomplexproductsandsystems,6sisnecessarytoproduceorperformdefect-freemorethan90%ofthetime><>HowComplexAreYourProducts?
(%ShippablewithoutRework)><>Why99%IsNotGoodEnoughThe“goodnesslevel”of99%equatesto:20,000lostarticlesofmailperhourUnsafedrinkingwateralmost15minuteseachday5,000incorrectsurgicaloperationsperweek2shortorlongla
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