Professional Documents
Culture Documents
M easure
A nalyze
I mprove
Operational C ontrol
Excellence
Six Sigma
By Lee Olson
D efine Presentation to INFORMS
M easure
A nalyze
I mprove
C ontrol
D efine
M easure
Objectives A
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C ontrol
Define A
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C ontrol
l
l
Is it a Goal, a Measure, a Process, a Tool or an expletive
deleted?
l
l
l
lYes
Define A
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C ontrol
Six Sigma
l Is a management methodology
Customer focused
Data driven decisions
Breakthrough performance gains
Validated bottom line results
l
Customer Focused A
I
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mprove
C ontrol
On-Time Delivery
% Impact
70%
60% 50%
50%
Complete
25%
40%
30% 0%
xyz Cell
Credit Hold
Engineering
Deliveries
Unrealistic
on part abc
Always
Orders on
Supplier
Low Yield
Promise
20%
Late
Change
Orders
Late
Date
Target
10%
Importance to Customers
Quality OTD
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Reason
High
Driver Action Description Status Status Description Ow ner Date Due Date
Late Supplier Deliveries Monthly reporting to suppliers on delivery & On Report Cards Implemented. Adam 5/21 5/21
quality metrics. track
Late Supplier Deliveries Arrange face to face meetings with top On Meetings Complete with top 10 Beth 6/15 6/15
offenders. track Suppliers.
Late Supplier Deliveries Review and approve supplier's corrective action Caution Corrective Action Plan in Place for 2 Carlos 7/15 9/15
plan. major Suppliers
xyz Cell Always Late Kaizen Event to focus on improving throughput On Event held 5/1. 25% throughput Doreen 5/21 5/21
by 40% and improve labor efficiency by 35% track improvement in May. Labor Efficiency
Increase of 30%
Unrealistic Promise Date Focus on custom products to provide realistic Problem Continued lack of progress. Re- Earnest 6/15 8/15
ATP based on inventory and leadtime of structured and focused team.
components. Developing detailed plan.
Training
Moderate-
Price
Shared Goals Complaints to-’Low’
Y= f (X)
To get results, should we focus our behavior on the Y or X ?
Y X1 . . . XN
Dependent Independent
Output Input-Process
Effect Cause
Symptom Problem
Monitor Control
Response Factor
σσ PPM
PPM
2 308,537
3 66,807
4 6,210
5 233
6 3.4
Process
Process Defects
Defectsper
perMillion
Million
Capability
Capability Opportunities
Opportunities
Ta
x
Factors
es
La
G W bo
en or r
ki
er
al n g
-5 Ca
% p
Pr ita
ic l
e
Assuming a 10% change in the factor
Re
d
Validated bottom line results
uc
tio
n
C
I
A
M
D efine
ontrol
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nalyze
easure
D efine
M easure
Define A
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C ontrol
Methodology
l Define
l Measure
l Analyze
l Improve
l Control
Roadmap M
A
easure
nalyze
Example I
C
mprove
ontrol
Define
Customers, Value, Problem Statement Validate
Scope, Timeline, Team Project $
Celebrate Primary/Secondary & OpEx Metrics
Project $ Current Value Stream Map Measure
Control Voice Of Customer (QFD) Assess specification / Demand
Document process (WIs, Std Work) Measurement Capability (Gage R&R)
Mistake proof, TT sheet, CI List Correct the measurement system
Analyze change in metrics Process map, Spaghetti, Time obs.
Value Stream Review Measure OVs & IVs / Queues
Prepare final report
Validate
Project $
Validate
Project $
DEF
Identify •Structured Brainstorming at all organizational levels I mprove
Problem •Cause and Effect Diagrams identifying critical factors C ontrol
•Primary and Secondary Metrics defined and charted
Operational Excellence
PERFECTION
•Develop a Current State Map
ME
Practical
Problem •Identify the response variable(s) and how to measure them
•Analyze measurement system capability
Methodology
Solutions
Practical
•Assess the specification (Is one in place? Is it the right one?)
RE
ANA
Problem •Future State Maps • Percent Loading
Definition •Standard Work Combination
•Use Graphical Analysis, Multi-Vari, ANOVA and basic
statistical tools to identify the likely families of variability
E
IMP
Problem •Level Loading / Line Leveling
Solution •Cell Design • Visual Controls
•Use Design of Experiments to find the critical few X’s
•Move the distribution; Shrink the spread; Confirm the results
E
CO
Problem •Place appropriate process controls on How do you want to see what it is that you need
to know?
Control the critical X’s What type of tool will generate what it is that you
•Document the effort and results need to see?
•Standard Work What type of data is required of the selected tool?
• TPM
Where can you get the required type of data?
Execute Plan
Based in part on Six Sigma Methodology developed by GE Medical Systems and Six Sigma Academy ,Cra
Incne. Co . Op . Ex . Methodology Originated by MBBs ; D . Braasch , J . Davis , R . D ugg ins , J . O ’ Callaghan , R .
D efine
Define M
A
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nalyze
Key Items I
C
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ontrol
Project Selection M
A
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nalyze
Impact I
C
mprove
ontrol
l Business Impact
Revenue Growth
Cost Reduction
Capital Reduction
Key Business Objectives
On Time Delivery
Lead Time
Quality
Customer Satisfaction
l Impact on Operational Excellence Metrics
l Effort required
People Resources
Capital Resources
Duration of Project
l Probability of success
Technical Risk
Management Risk
Duration of Project
People Resources
Capital Resources
Management Risk
Capital Reduction
On Time Delivery
Revenue Growth
Cost Reduction
Technical Risk
Total Impact
Key Business
Total Effort
Satisfaction
Total Risk
Lead Time
Customer
Objective
Quality
Mfg
(M)
or
Admin
# (A) Project Description
Variable weightings 20% 15% 10% 15% 20% 5% 5% 10% 100% 50% 20% 30% 100% 40% 60% 100%
1 A Customer Billing Errors 0 2 0 4 4 2 2 5 2.4 2 1 3 2.1 1 4 2.8
Warranty
2 M 0 2 0 1 1 0 3 3 1.1 4 4 5 4.3 4 2 2.8
scrap warranty vs sales
3 A Vendor Delivery Performance 0 2 2 2 5 4 3 0 2.2 1 1 3 1.6 1 2 1.6
4 M On Time Shipping Performance 2 1 2 4 5 0 1 5 2.9 4 1 2 2.8 1 3 2.2
Hiring and Retention
5 A 20% - 24% Turnover 0 3 0 2 1 0 3 2 1.3 3 2 4 3.1 1 4 2.8
Manufacturing Maintenance
7 M 0 3 0 1 2 3 1 0 1.2 1 4 1 1.6 1 1 1.0
Tooling Maintenance
8 A Day Sales Outstanding (DSO) 0 0 4 2 0 0 0 0 0.7 1 0 2 1.1 1 1 1.0
9 M FTY of 65% on product 123 4 4 2 5 4 4 5 5 4.1 2 1 1 1.5 2 1 1.4
Project Risk =
A
I
C
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ontrol
Project
Ranking Ball Size
Number
n
4 9
6
3 4
Impact
1
3
2
7 5
1 2
8
0
1 2 3 4 5
Effort
Measure A
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C ontrol
Analyze M
A
easure
nalyze
Improve A
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C ontrol
Control A
I
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C ontrol
l Management of Change
Owned by project champion and value stream manager
Critical to long term success of project
Physical and cultural changes
l Measurement controls
On-going metrics
l Visual Controls
Enable workers to self-manage the process
l
Basic Implementation M
A
easure
nalyze
Roadmap I
C
mprove
ontrol
Control
-Sustain Improvement
-Drive Towards Perfection
3.1
3.2
2.0 Educate/Get Everyone Involved
2.1
2.2
1.0 Improve the Metrics
1.1
1.2
8
7
6
5
4
3
2
1
1
2
3
4
5
6
Your Manager's 1-Year
Breakthrough
Objectives
Benefits
Conduct interviews with top 10 customers
Objectives
Train leadership team as Lean Green Belts (LGB)
Trainworkers inhow our products are used by our major customers
operational level
✔
✔
4
IT
l
Operations
●
●
❍ ●
Quality
Engineering
Hoshin
● Owner
Maintenance
❍ ● ❍ ❍ ❍
Resource
m
Marketing
❍
❍
C
I
A
M
D
Training
❍ ❍ ❍ ❍ ❍ ❍ ●
●
❍
❍ Support
efine
ontrol
mprove
nalyze
easure
D efine
M easure
The percentage of sales order line items that ship complete on or before the original customer promise date, for I mprove
all line items shipped in the month. C ontrol
On-Time Delivery
Pareto of Drivers
100%
90% 100%
80%
75%
% Impact
70%
60% 50%
50%
25%
40%
30% 0%
Engineering
Credit Hold
xyz Cell
on part abc
Deliveries
Unrealistic
Always
Orders on
Low Yield
Supplier
Promise
20%
Late
Change
Orders
Late
Date
Target
10%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Reason
Late Supplier Deliveries Arrange face to face meetings with top On Meetings Complete with top 10 Beth 6/15 6/15
offenders. track Suppliers.
Late Supplier Deliveries Review and approve supplier's corrective action Caution Corrective Action Plan in Place for 2 Carlos 7/15 9/15
plan. major Suppliers
xyz Cell Always Late Kaizen Event to focus on improving throughput On Event held 5/1. 25% throughput Doreen 5/21 5/21
by 40% and improve labor efficiency by 35% track improvement in May. Labor Efficiency
Increase of 30%
Unrealistic Promise Date Focus on custom products to provide realistic Problem Continued lack of progress. Re- Earnest 6/15 8/15
ATP based on inventory and leadtime of structured and focused team.
components. Developing detailed plan.
D efine
M easure
Does it work?. A
I
nalyze
mprove
C ontrol
In Billions $
50
$42
Market Value Added
1999 40
73 companies
Ralston Purina 30 $23
Quaker Oats
Hilton Hotels
Coca-Cola 20
Unilever
etc.
10
0
Low High
Customer Satisfaction Index Score
Source: American Customer Satisfaction Index, U Michigan, HBR, 2001
l Six Sigma
Remove defects, minimize variance
l Lean
Remove waste, shorten the flow
l TOC
Remove and manage constraints
l TQM
Continuous Improvement
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Demand = 45/day
Customer Data D
M
efine
easure
On-Time Delivery
A nalyze
I mprove
C ontrol
Takt Time = 18.2 min
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
Competitive LT = 3 days
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
D efine
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Lead Time = 23.6 days
Flow of Value D
M
efine
easure
Lead Time
A nalyze
I mprove
C ontrol
Touch Time = 89 min
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Max Wip = 7.6 days
Constraints D
M
efine
easure
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
CO = 1 hour
Setup Times D
M
efine
easure
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Uptime = 70%
Maintenance D
M
efine
easure
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
D efine
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Flow of Value D
M
efine
easure
Who is setting the pace?
OTD, Lead Time
A nalyze
I mprove
C ontrol
What is the pitch time?
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
D efine
M easure
Making it happen A
I
nalyze
mprove
C ontrol
l Implementer
Learns the tools
Works the process
Solves day to day problems
l Manager Where do you
Learns the methodology need to focus?
Manages a value stream
Reviews project teams
l Leader
Establishes the vision for the future
Sets priorities
Encourages
What Is a Sigma? A
I
nalyze
mprove
C ontrol
Units of Measure
Performance
Limit
Area of Yield Probability
of a Defect µ Units of Measure
µ
Units of Measure
Excellent
Poor Process Process
Capability Capability
VeryHigh VeryHigh VeryLow VeryLow
Probability Probability Probability Probability
of Defects of Defects of Defects of Defects
Low
LowSigma
Sigma High
HighSigma
Sigma