Six Sigma
South Carolina Manufacturing Extension Partnership
“Helping South Carolina Companies Grow” • • • •
Tim Sinclair Regional Vice President 803-206-3536 [email protected]
Lean Manufacturing Six Sigma Constraint Management What are they? How are they different? How do they fit?
Improvement Is Market Driven Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle—when the sun comes up, you had better be running.
Every Company is concerned with Quality, Cost and Response Time • • • • •
Quality is now a “given” in the marketplace Customers demand faster response times Customer loyalty and retention is critical Downward price pressure to lower costs Lower invested capital – need to get more output with less
A system is needed that optimizes capacity, improves response time performance and eliminates variability in all processes
Lean Manufacturing Lean is: “A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.” Manufacturing Extension Partnership (MEP)
Lean Manufacturing • Philosophy Employee driven continuous improvement through waste elimination Manufacturing flow is single piece, pull or single point scheduling at the pace of the customer
• Tools Techniques to reduce waste and achieve one piece flow, the “Lean Building Blocks”
Where did Lean come from? • Waste reduction mentioned in writings as early as Benjamin Franklin (Poor Richard’s Almanack) • Contributions made over the years by notables such as Eli Whitney, Frederick Taylor, Frank Gilbreth and Henry Ford • Edward Deming took quality tools to Japan • Toyota sent them back in as a System • (1990) Womack & Jones book, The Machine that Changed the World about the Toyota Production System • American companies began adopting the tools
Operational Characteristics Lean
Traditional
• • • • •
• • • • • • • •
• • • •
Simple and visual Demand driven Inventory as needed Customer focused Reduced non-value-added activities Small lot size Minimal lead time Quality built Value stream managers
Complex Forecast driven Excess inventory Speed up value-added work Batch production Long lead time Inspected-in Functional departments
Definition of Value-added Value-added Any activity that increases the market form or function of the product; something that customers are willing to pay for. Non-value-added (a.k.a., waste) Any activity that does not add market form or function or is unnecessary; activities that should be eliminated, simplified, reduced, or integrated.
Waste • Effort that adds no value to the product from the customer’s viewpoint • Does your customer pay you to move product on a forklift?
Lean ≡ Eliminated Waste Value-Added
Non-Value-Added • Transportation – movement of people, products & information • Inventory – Excess materials, paperwork • Motion – Bending, turning, reaching lifting • Waiting – For information, material, equipment • Over production – work that is excess or early • Over processing - More work or processing than is required • Defects - Rework, scrap, incorrect documentation • Skills – Under utilizing capabilities
Typically 95% of product lead time is non-value-added.
Lean Building Blocks Continuous Improvement
Pull/Kanban Quality at Source Standardized Work Visual
Flow/Cellular POUS
Quick Changeover
Batch Reduction 5S System
TPM
Teams
Plant Layout
Value Stream Mapping
Five Steps in Lean 1. 2. 3. 4. 5.
Identify value Identify the value stream Improve Flow Allow customer Pull Perfect the process
Acme Current State
Acme Future State
Impact of Batch Size Reduction • Batch & Queue Processing Process
Process
Process
A
B
C
10 minutes
10 minutes 10 minutes
Lead Time: 30+ minutes for total order 21+ minutes for first piece
• Continuous Flow Processing ProcessProcessProcess
A
B
C
12 min. for total order 3 min. for first part
Pull System Flow Diagram Information Flow
Raw Process Supplier Matl A
Process B
Product Flow
Kanban Locations
Process Fin. Customer C Goods
What is Six Sigma? A methodology to improve process performance using a structured, project-oriented approach (DMAIC). Focused on reducing or eliminating variation to customer requirements. Uses a suite of quality/statistical analysis tools. Has a formal management system.
Origins of Six Sigma • Motorola developed an improvement methodology using known quality improvement tools (1987) Average Black Belt project saved $175K per year with 5-6 projects per year per Black Belt In 1988,Motorola won the Malcolm Baldridge Award
• Others have reported huge savings using the methodology: $1.5B AlliedSignal (Honeywell), $2.5B GE, In 2006, Motorola reported $16B – $17B in savings since program inception
Six Sigma is a Measure of Quality The Goal of Six Sigma implementation is to achieve process performance that produces no more than 3.4 defects for every one million activities or opportunities
How much difference can a sigma make? 99.74% Acceptable = 4 Sigma
99.9997% Acceptable = 6 Sigma
20,000 lost articles of mail per hour
Seven articles lost per hour
Unsafe drinking water for almost 4 min. each day
One unsafe minute every seven months
5,000 incorrect surgical operations per week
1.7 incorrect operations per week
Two short or long landings at most major airports per day
One short or long landing every five years
200,000 wrong drug prescriptions each year
68 wrong prescriptions per year
No electricity for two hours each month
One hour without electricity every 34 years
DMAIC - The Improvement Philosophy Roadmap for Six Sigma
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Ensure Stakeholder Alignment
Obtain Clear Picture of Current State
Identify Deep Root Causes
Identify and Pilot Solutions
Sustain the Gains
The Methodology makes it work. ? 1. Define
NO!!! 5. Control
4. Improve
2. Measure
3. Analyze
Gate Reviews
The rigorous application of Gate Reviews across DMAIC is a critical factor influencing project success
A gate review closes out one DMAIC phase and opens the door (or gate) to the next
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
SUSTAIN
Six Sigma- Management System Six Sigma defined as a Prescriptive management infrastructure system to execute organizational strategy: major difference from Lean Executive Leaders and process owners trained and actively engaged in the process Projects selected specifically to support organization objectives Defined organization and set of roles (Black Belts, Directors, Sponsors, Green Belts, etc.) creates accountability Critical mass of resources deployed (1% of employee population)
Six Sigma Tools • • • • • • • • • • • • • • • • • •
SIPOC Process Map Voice of the Customer Analysis Quality Function Deployment Kano Analysis Data Collection Plan Statistical Sampling Measurement System Analysis Pareto Analysis Frequency Plots and Histograms Control Charts Capability Analysis Failure Modes and Effects Analysis (FMEA) Cause & Effect Diagram Cause & Effect Matrix ANOVA Components of Variation Analysis Sample & Multiple Regression
• • • • • • •
Chi-Square Analysis Logistic Regression Pugh Concept Selection Matrix Design of Experiments Piloting Standard Operating Procedures Process Control Plans
Theory of Constraints“Constraint Management” • Philosophy A business is a system A system is a collection of interrelated resources focused on a common goal- usually increase profit (increase throughput) Every system has a limiting factor If you do not improve the limiting factor you cannot improve the system Manufacturing flow is dictated by Drum-Buffer-Rope
Constraint Management • Introduced by Eliyahu Goldratt in 1984 book The
Goal. • The Race- further develops DBR • What is This Thing Called Theory of Constraints and How Should it be Implemented- five focusing steps and Thinking processes • It’s Not Luck- use Thinking process tools to break policy constraints
Constraint Management Constraint ≡ Anything that limits the system from
achieving higher performance relative to its purpose Constraint categories: Market Resource Material Financial Vendor Policy
Constraint Management Tools • Five Focusing Steps (Focusing Flywheel) to eliminate the current constraint • Throughput Accounting Measures Throughput (T), Inventory (I), Operating Expense (OE)
• Thinking processes
Current Reality Tree Evaporating Cloud Core Conflict Cloud Future Reality Tree Negative Branch Reservations
• Drum-Buffer-Rope (DBR)
Constraint Management Five Focusing Steps (Focusing Flywheel) 1. 2. 3. 4. 5.
Identify the constraint Exploit the constraint Subordinate the constraint Elevate the solution Repeat (go back to step 1)
Drum-Buffer-Rope System
RM
CB
C
SB
Raw
Constraint
Shipping
Matl.
Buffer
Buffer
Market Demand
Shipping Drum
Flow of Production
Drum-Buffer-Rope System • Constraint should dictate the schedule based on market demand and its own potential. • The schedule for succeeding operations (including assembly) should be First In First Out Flow • The schedule of preceding operations should support the time buffer and thus be derived backwards in time from the constraint schedule.
How Do They Fit? • Use Constraint Management Philosophy to focus improvement efforts on the constraint • Use Lean and Six Sigma tools and methodology to Elevate the constraint and reduce variation
Six Sigma with Lean Is the Integration of Two Powerful Process Improvement Approaches... Precision + Accuracy + VOC
• Six Sigma Voice of the Customer Statistical Process Control Design of Experiment Poka-Yoke Gage R&R Failure Modes Effect Analysis Cause and Effect Analysis Hypothesis Testing
Speed + Low Cost + Flexibility
• Lean Value stream mapping Bottleneck identification and removal “Pull” from the Customer Setup and queue reduction Process flow improvement Kaizen & 5S Supply Chain Strategy
Two Ways to Improve Processes Optimize the Important Steps • The focus of the traditional Six Sigma toolset
Eliminate the Wasteful Steps and Practices • The focus of Lean methods
How do they fit? • The more steps in a process, the more inherent variation- use Lean to eliminate non-value activities (i.e. steps), thereby reducing variation. • Use Six Sigma tools to fine tune Value Added work
Where do they fit? • TOC/Drum-Buffer-Rope- typically recommended for companies in low volume/ high mix environments and custom manufacturing. Also good for companies that are capacity constrained by high dollar capital equipment. Does not require involvement by much of the workforce TOC accounting used Provides very good metrics for company-wide incentive/bonus plans
Where do they fit? • Lean- almost any organization can benefit from using lean tools. A better fit than Six Sigma for companies starting their formal Continuous Improvement programs and small to midsize organizations. Good for quickly eliminating the “low hanging fruit”
Requires a high amount of employee/”shop floor” participation Culture change/shift occurs (necessary) Improvements through quick change (kaizen) events New accounting measures
Where do they fit? • Six Sigma (Lean Six Sigma)- usually recommended to companies further down their continuous improvement journey that are already pretty efficient. Due to resource requirements, typically a fit for larger companies. Top-down, management driven approach Does not involve a lot of the workforce Improvements through projects
What Questions May I Answer? • Contact information: Tim Sinclair Cell: 803-206-3536 [email protected] www.scmep.org
“Helping South Carolina Companies Grow” • • • •
Tim Sinclair Regional Vice President 803-206-3536 [email protected]
Lean Manufacturing Six Sigma Constraint Management What are they? How are they different? How do they fit?
Improvement Is Market Driven Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle—when the sun comes up, you had better be running.
Every Company is concerned with Quality, Cost and Response Time • • • • •
Quality is now a “given” in the marketplace Customers demand faster response times Customer loyalty and retention is critical Downward price pressure to lower costs Lower invested capital – need to get more output with less
A system is needed that optimizes capacity, improves response time performance and eliminates variability in all processes
Lean Manufacturing Lean is: “A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.” Manufacturing Extension Partnership (MEP)
Lean Manufacturing • Philosophy Employee driven continuous improvement through waste elimination Manufacturing flow is single piece, pull or single point scheduling at the pace of the customer
• Tools Techniques to reduce waste and achieve one piece flow, the “Lean Building Blocks”
Where did Lean come from? • Waste reduction mentioned in writings as early as Benjamin Franklin (Poor Richard’s Almanack) • Contributions made over the years by notables such as Eli Whitney, Frederick Taylor, Frank Gilbreth and Henry Ford • Edward Deming took quality tools to Japan • Toyota sent them back in as a System • (1990) Womack & Jones book, The Machine that Changed the World about the Toyota Production System • American companies began adopting the tools
Operational Characteristics Lean
Traditional
• • • • •
• • • • • • • •
• • • •
Simple and visual Demand driven Inventory as needed Customer focused Reduced non-value-added activities Small lot size Minimal lead time Quality built Value stream managers
Complex Forecast driven Excess inventory Speed up value-added work Batch production Long lead time Inspected-in Functional departments
Definition of Value-added Value-added Any activity that increases the market form or function of the product; something that customers are willing to pay for. Non-value-added (a.k.a., waste) Any activity that does not add market form or function or is unnecessary; activities that should be eliminated, simplified, reduced, or integrated.
Waste • Effort that adds no value to the product from the customer’s viewpoint • Does your customer pay you to move product on a forklift?
Lean ≡ Eliminated Waste Value-Added
Non-Value-Added • Transportation – movement of people, products & information • Inventory – Excess materials, paperwork • Motion – Bending, turning, reaching lifting • Waiting – For information, material, equipment • Over production – work that is excess or early • Over processing - More work or processing than is required • Defects - Rework, scrap, incorrect documentation • Skills – Under utilizing capabilities
Typically 95% of product lead time is non-value-added.
Lean Building Blocks Continuous Improvement
Pull/Kanban Quality at Source Standardized Work Visual
Flow/Cellular POUS
Quick Changeover
Batch Reduction 5S System
TPM
Teams
Plant Layout
Value Stream Mapping
Five Steps in Lean 1. 2. 3. 4. 5.
Identify value Identify the value stream Improve Flow Allow customer Pull Perfect the process
Acme Current State
Acme Future State
Impact of Batch Size Reduction • Batch & Queue Processing Process
Process
Process
A
B
C
10 minutes
10 minutes 10 minutes
Lead Time: 30+ minutes for total order 21+ minutes for first piece
• Continuous Flow Processing ProcessProcessProcess
A
B
C
12 min. for total order 3 min. for first part
Pull System Flow Diagram Information Flow
Raw Process Supplier Matl A
Process B
Product Flow
Kanban Locations
Process Fin. Customer C Goods
What is Six Sigma? A methodology to improve process performance using a structured, project-oriented approach (DMAIC). Focused on reducing or eliminating variation to customer requirements. Uses a suite of quality/statistical analysis tools. Has a formal management system.
Origins of Six Sigma • Motorola developed an improvement methodology using known quality improvement tools (1987) Average Black Belt project saved $175K per year with 5-6 projects per year per Black Belt In 1988,Motorola won the Malcolm Baldridge Award
• Others have reported huge savings using the methodology: $1.5B AlliedSignal (Honeywell), $2.5B GE, In 2006, Motorola reported $16B – $17B in savings since program inception
Six Sigma is a Measure of Quality The Goal of Six Sigma implementation is to achieve process performance that produces no more than 3.4 defects for every one million activities or opportunities
How much difference can a sigma make? 99.74% Acceptable = 4 Sigma
99.9997% Acceptable = 6 Sigma
20,000 lost articles of mail per hour
Seven articles lost per hour
Unsafe drinking water for almost 4 min. each day
One unsafe minute every seven months
5,000 incorrect surgical operations per week
1.7 incorrect operations per week
Two short or long landings at most major airports per day
One short or long landing every five years
200,000 wrong drug prescriptions each year
68 wrong prescriptions per year
No electricity for two hours each month
One hour without electricity every 34 years
DMAIC - The Improvement Philosophy Roadmap for Six Sigma
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Ensure Stakeholder Alignment
Obtain Clear Picture of Current State
Identify Deep Root Causes
Identify and Pilot Solutions
Sustain the Gains
The Methodology makes it work. ? 1. Define
NO!!! 5. Control
4. Improve
2. Measure
3. Analyze
Gate Reviews
The rigorous application of Gate Reviews across DMAIC is a critical factor influencing project success
A gate review closes out one DMAIC phase and opens the door (or gate) to the next
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
SUSTAIN
Six Sigma- Management System Six Sigma defined as a Prescriptive management infrastructure system to execute organizational strategy: major difference from Lean Executive Leaders and process owners trained and actively engaged in the process Projects selected specifically to support organization objectives Defined organization and set of roles (Black Belts, Directors, Sponsors, Green Belts, etc.) creates accountability Critical mass of resources deployed (1% of employee population)
Six Sigma Tools • • • • • • • • • • • • • • • • • •
SIPOC Process Map Voice of the Customer Analysis Quality Function Deployment Kano Analysis Data Collection Plan Statistical Sampling Measurement System Analysis Pareto Analysis Frequency Plots and Histograms Control Charts Capability Analysis Failure Modes and Effects Analysis (FMEA) Cause & Effect Diagram Cause & Effect Matrix ANOVA Components of Variation Analysis Sample & Multiple Regression
• • • • • • •
Chi-Square Analysis Logistic Regression Pugh Concept Selection Matrix Design of Experiments Piloting Standard Operating Procedures Process Control Plans
Theory of Constraints“Constraint Management” • Philosophy A business is a system A system is a collection of interrelated resources focused on a common goal- usually increase profit (increase throughput) Every system has a limiting factor If you do not improve the limiting factor you cannot improve the system Manufacturing flow is dictated by Drum-Buffer-Rope
Constraint Management • Introduced by Eliyahu Goldratt in 1984 book The
Goal. • The Race- further develops DBR • What is This Thing Called Theory of Constraints and How Should it be Implemented- five focusing steps and Thinking processes • It’s Not Luck- use Thinking process tools to break policy constraints
Constraint Management Constraint ≡ Anything that limits the system from
achieving higher performance relative to its purpose Constraint categories: Market Resource Material Financial Vendor Policy
Constraint Management Tools • Five Focusing Steps (Focusing Flywheel) to eliminate the current constraint • Throughput Accounting Measures Throughput (T), Inventory (I), Operating Expense (OE)
• Thinking processes
Current Reality Tree Evaporating Cloud Core Conflict Cloud Future Reality Tree Negative Branch Reservations
• Drum-Buffer-Rope (DBR)
Constraint Management Five Focusing Steps (Focusing Flywheel) 1. 2. 3. 4. 5.
Identify the constraint Exploit the constraint Subordinate the constraint Elevate the solution Repeat (go back to step 1)
Drum-Buffer-Rope System
RM
CB
C
SB
Raw
Constraint
Shipping
Matl.
Buffer
Buffer
Market Demand
Shipping Drum
Flow of Production
Drum-Buffer-Rope System • Constraint should dictate the schedule based on market demand and its own potential. • The schedule for succeeding operations (including assembly) should be First In First Out Flow • The schedule of preceding operations should support the time buffer and thus be derived backwards in time from the constraint schedule.
How Do They Fit? • Use Constraint Management Philosophy to focus improvement efforts on the constraint • Use Lean and Six Sigma tools and methodology to Elevate the constraint and reduce variation
Six Sigma with Lean Is the Integration of Two Powerful Process Improvement Approaches... Precision + Accuracy + VOC
• Six Sigma Voice of the Customer Statistical Process Control Design of Experiment Poka-Yoke Gage R&R Failure Modes Effect Analysis Cause and Effect Analysis Hypothesis Testing
Speed + Low Cost + Flexibility
• Lean Value stream mapping Bottleneck identification and removal “Pull” from the Customer Setup and queue reduction Process flow improvement Kaizen & 5S Supply Chain Strategy
Two Ways to Improve Processes Optimize the Important Steps • The focus of the traditional Six Sigma toolset
Eliminate the Wasteful Steps and Practices • The focus of Lean methods
How do they fit? • The more steps in a process, the more inherent variation- use Lean to eliminate non-value activities (i.e. steps), thereby reducing variation. • Use Six Sigma tools to fine tune Value Added work
Where do they fit? • TOC/Drum-Buffer-Rope- typically recommended for companies in low volume/ high mix environments and custom manufacturing. Also good for companies that are capacity constrained by high dollar capital equipment. Does not require involvement by much of the workforce TOC accounting used Provides very good metrics for company-wide incentive/bonus plans
Where do they fit? • Lean- almost any organization can benefit from using lean tools. A better fit than Six Sigma for companies starting their formal Continuous Improvement programs and small to midsize organizations. Good for quickly eliminating the “low hanging fruit”
Requires a high amount of employee/”shop floor” participation Culture change/shift occurs (necessary) Improvements through quick change (kaizen) events New accounting measures
Where do they fit? • Six Sigma (Lean Six Sigma)- usually recommended to companies further down their continuous improvement journey that are already pretty efficient. Due to resource requirements, typically a fit for larger companies. Top-down, management driven approach Does not involve a lot of the workforce Improvements through projects
What Questions May I Answer? • Contact information: Tim Sinclair Cell: 803-206-3536 [email protected] www.scmep.org
