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Lean & Six Sigma Management

Outline
Lean Management: Concepts, practices & principles pre-mid term
10-11 sessions Articles, Case Studies

Six Sigma Post mid term


10-11 sessions DMAIC Methodology, Case Studies

A multi-faceted perspective
Historical A scientific Management View A value chain view: An organizations functions The Practitioners: Toyota, Motorola

Genesis of Scientific Management


Workers believe it is best to go slow instead of fast (in 95% of the cases.) If you propose : Why dont you double your output in the next year?
it may be good for other trades but it may result in loss of jobs for half of us

Therein lies the need for development of scientific management to disprove this belief
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Principles of Scientific Management


It gives management very different duties; duties that make them equally responsible and contributing to greater output 4 Principles
Gathering of information based on observations: time & motion study Selection of the workman Bring science & the man together: demonstrate, participate and educate, not mere theory Division of work; management does a part of work (which were earlier done by workmen)

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task sequence for workman 1 Lift green block from crate and place on work 1 bench 2 sec 2 Pick up blue part and place on green block 3 Screw blue part onto green block 4 Lift and place it near workman 2 2 sec 4 sec 2 sec

Proof
Observations of Frederick Winslow Taylor (1900) Pig of iron weighs 92 pounds (42 kg) A worker bends down, lifts it, walks a few yards and then drops it on a pile How can the 4 principles be applied here? F W Taylor explains his 4 principles through his work at Bethlehem Steel works, Pennsylvania
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Science of Shoveling
Taylor observed the work of shoveling Workers handled 1.7 kg with a shovel With the same shovel, they handled 17 kg of iron ore Productivity varied drastically Exhaustion set in very soon though the workman worked the whole day. Needed to research and find out optimal capacity of the shovel.
Coal

Iron Ore

Shoveling- the experiment


Started with weight of 16-17 kg on the shovel; the workmen made one pile Gradually decreased the weight; the size of the pile kept growing larger as the ore weight was reduced in stages. After one stage, it started decreasing. This happened at 9.75 kg. 8-9 kg was taken as the optimal weight on the shovel that could generate maximum productivity (size of the pile) in a day.
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Shoveling- the experiment


Every day, in the morning, the workman had 2 sheets:
Paper 1 explaining the tools he had to use; his assigned work location for the day Paper 2 (white or yellow): white he has earned 60% extra wages, yellow: he has not earned

If yellow, the problem needs to be addressed


Can be due to sickness, weakness, etc. Can be due to lack of application (shirking)

Application of the right kind of force : the physical movement


Lean using the body weight, push onto the pile Relieve the arms from the effort

End result: Taylor reduced the number of workmen from 500 to 140, profit increase of $75,000 in 1901.

Lean Concepts: Origins

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Early Beginnings: a pioneer


Henry Ford father of mass production Was responsible for the famous Model T in 1908
You can have a car in any color as long as it is black

Earlier process: batch manufacturing Ford introduced assembly line manufacturing

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Batch manufacturing

Longer lead times Higher Work in Process (WIP) Difficult to trace quality problems Problems of re-work
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Assembly line

A long conveyor belt is in operation One component, stage-wise, one operator / robot at a time.
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Assembly line

Other Benefits Immediate stoppage on discovering defects No WIP Predictable output


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Lean Concepts The Value Chain Perspective

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The Value Chain: Implications for Organizational functions


Each function has several smaller component functions Established domains / functions
Sales Administration Operations (Manufacturing, production) Purchase

Focus is on efficiency and productivity within each function


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Lean Principles
The focus is on the process: efficiency improvements,
Tangible Measurable

Lean
Cost effective Meets targeted costs, time In line with allotted manpower / people

Lean focuses on value


A process that adds value to the service / operation
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5 principles
Ref: Womack J.P. & Jones, D.T.
Value

Pull
The Value Stream Perfection Flow

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Principle 1: Value
Example: Plan & execute a family holiday 1. Discuss with family members about choice of 120 location: Domestic / International 2. Check holiday options online 60 3. Call up travel agent and speak 30 4. Travel agent prefers visit, sends brochures over 10 e-mail 60 5. Visit travel agent 6. See more brochures, discuss and finalize 60
(Time in minutes) Value add Waste
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Principle 1: Value
10 7. Travel agent sends tickets 120 8. Take a taxi to airport 9. Check-in, security screening 60 480 10.In-flight time 11.De-plane, wait for immigration checks 20 12.Book a taxi 60 13.Travel to sea side resort 14. Spend 3N/4D and return home

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Principle 1: Value
Lesson?
Value-add Time Waste TOTAL (in Minutes) 700 450 1150 61% 39%

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Principle 2: Value Stream


BAUXITE MINE
Reduction Mill Smelter Hot Rolling Mill Cold Rolling Mill Can maker Essence Plant

CORN FIELD
Corn Storage Caramel Plant Caramel Storage

BEET FIELD

Beet Storage

Sugar Plant
Sugar Storage

FIR FOREST
Paper Mill Carton Plant Carton Warehouse

BOTTLER

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Principle 2: Value Stream


BOTTLER

Bottler warehouse

Reliance warehouse

Reliance store

Home
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Principle 2: Value Stream


Incoming Processing Finished Process Cumulative Cumulative Storage Time Storage Rate Days Scrap Mine 0 20 min 2 weeks 1000 t/hr 319 0 Reduction Mill 2 weeks 30 min 2 weeks 305 0 Smelter 3 months 2 hrs 2 weeks 277 2 Hot Rolling Mill 2 weeks 1 min 4 weeks 10 ft/min 173 4 Cold Rolling Mill 2 weeks <1 min 4 weeks 2100 ft/min 131 6 Can Maker 2 weeks 1 min 4 weeks 2000/min 89 20 Bottler 4 days 1 min 5 weeks 1500/min 47 24 Reliance DC 0 0 3 days 8 24 Reliance Store 0 0 2 days 5 24 Home Storage 3 days 5 min 6 months 319 24 Totals 5 months 3 hours 6 months 319 24

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Principle 3: Flow
Terminology
Batch Flow (or) one-piece flow

Focuses on specialization
Learning curve Productivity enhancement

However, provision for skill enhancement


Job rotation Multi-skilling in case of cellular manufacturing
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Principle 3: Flow
Everyday example
Preparing letters before dispatch

Industry example
Automobile Assembly line manufacturing Insurance registration & processing

Key Metrics
Throughput i.e. output per hour (or) per day Takt time
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Principle 3: Flow

One operator can manage multiple machines A problem at one machine will be immediately highlighted. An operation is performed on one product at a time, the product moves in sequence
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Principle 3: Flow
Batch mode of production. Several products are produced and stocked. We cannot identify the defectives

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Principle 3: Flow
One piece flow: defects are easily identified and the process is stopped.

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Principle 3: example - Boeing

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Principle 4: Pull
Customer driven Customer can be a process B which follows process A Applicable to services as well as manufacturing
Example

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Principle 4: Pull
Assume 2 units of the size M in the blue striper t-shirt are sold out A new customer arrives: probability that he is a size M: 40-50% Stock out ? Lost sale?

Solution?

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Principle 4: Pull
Auto replenishment Set Minimum Base Qty: Example Size S: 2 pc, M: 4 pcs, L: 2 pc, XL: 2 pc Whenever stock in size M falls below 4, an auto replenishment order is generated by system. Warehouse receives order, dispatches to store. Whole process could take 24 hrs in case of a local Distribution Center Actively followed for brands: Arrow, Louis Philippe, etc
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Principle 5: Perfection
Improvement: incremental or radical (Kaikaku) Incremental improvements (Kaizen) are the key focus area in understanding lean management Example: for workers in an assembly line,
Provide automatic tools (remove manual fatigue) Provide rack at operator height (remove fatigue) Reduce walking to workstation time (remove nonvalue added activity Can enhance productivity or throughput by 5-10% at most
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Principle 5: Perfection
GLASS FLOAT (day 1) 800 km GLASS FABRICATION (day 47) 700 km

GLASS INSTALLATION (day 100)

900 km

GLASS ENCAPSULATION (day 88)

The brief: Kaikaku (radical improvement) or Kaizen (incremental improvement) Auto glass manufacturing & installation: an example of kaikaku
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Principle 5: Perfection
Car Assembly Plant

Float

Press

Encapsulate

With active collaboration, a single location based manufacturing was initiated Lead time of 2 days only, no non-value adding activity Distance traversed = 80 km
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Principle 5: Perfection

A pantaloons store Problem statement: increase SSPD (Sales Per Square foot per day) Options: buy brands or lease out space
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Principle 5: Perfection

Pantaloons can lease out space Implications?


Brands manage the space Revenues based on sales Fixed rentals: assured income

An example of Kaikaku
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THANK YOU

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