Professional Documents
Culture Documents
Excellence
Six Sigma
By Lee Olson
D efine Presentation to INFORMS
Measure
Analyze
Improve
Control
Define
Measure
Objectives Analyze
Improve
Control
Yes
Six Sigma
Is a management methodology
• Customer focused
• Data driven decisions
• Breakthrough performance gains
• Validated bottom line results
On-Time Delivery
Pareto of Drivers
80%
100%
75%
% Impact
70%
60% 50%
50%
• Complete
25%
40%
Importance to Customers
30% 0%
xyz Cell
Credit Hold
Engineering
Unrealistic
on part abc
Deliveries
Orders on
Always
Supplier
Low Yield
Promise
20%
Late
Change
Orders
Late
Date
Target
10%
0%
• Quality • OTD
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
22 3
30
08
8,5
,5 337
7
33 6
66
6 ,8
,8 0
07
7
44 66 ,21
,20
10
55 2
23
3 33
66 3
3.4
.4
Process
Process Defects
Defectsper
perMillion
Million
Capability
Capability Opportunities
Opportunities
Ta
Factors
xe
s
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
Control
Define
Analyze
Improve
Measure
Define
Measure
Define Analyze
Improve
Control
Methodology
Define
Measure
Analyze
Improve
Control
Roadmap Measure
Analyze
Example Improve
Control
Define
Next Project Customers, Value, Problem Statement Validate
Scope, Timeline, Team Project $
Celebrate Primary/Secondary & OpEx Metrics
Project $ Current Value Stream Map
Measure
Voice Of Customer (QFD)
Control 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 $
Define Measure
Analyze
Impact Improve
Control
Business Impact
• Revenue Growth
• Cost Reduction
• Capital Reduction
• Key Business Objectives
• On Time Delivery
• Lead Time
• Quality
• Customer Satisfaction
Impact on Operational Excellence Metrics
Effort required
• People Resources
• Capital Resources
• Duration of Project
Probability of success
• Technical Risk
• Data available
• Knowledge of process
• Management Risk
• Aligned with objectives
• Support by value stream manager
Impact vs. Risk vs. Effort
• Assess ROI (Return On Investment)
• Assign priorities to projects
Operational Excellence Training
Define
Measure
Evaluate and Rank Suggestions Analyze
Improve
Control
4 9
6
3 4
Impact
1
3
2
7 5
1 2
8
0
1 2 3 4 5
Effort
Analyze Measure
Analyze
Management of Change
• Owned by project champion and value stream manager
• Critical to long term success of project
• Physical and cultural changes
Measurement controls
• On-going metrics
Visual Controls
• Enable workers to self-manage the process
Roadmap Improve
Control
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)
Train workers inhow our products are used by our major customers
operational level
✔
✔
4
IT
l
Operations
●
●
❍ ●
Quality
Engineering
Hoshin
● Owner
Maintenance
❍ ● ❍ ❍ ❍
Resource
m
Marketing
❍
❍
Training
❍ ❍ ❍ ❍ ❍ ❍ ●
●
❍
Control
Define
Analyze
Improve
Measure
❍ Support
ON TIME DELIVERY (sample)
The percentage of sales order line items that ship complete on or before the original customer promise date, for
all line items shipped in the month.
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
Deliveries
Unrealistic
on part abc
Orders on
Always
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.
Define
Measure
Does it work?. Analyze
Improve
Control
In Billions $
50
$42
Market Value Added
1999
40
73
companies 30 $23
Ralston
Purina 20
Quaker Oats
Hilton Hotels
Coca-Cola
10
Unilever
etc. 0
Low High
Customer Satisfaction Index Score
Source: American Customer Satisfaction Index, U Michigan, HBR, 2001
Six Sigma
• Remove defects, minimize variance
Lean
• Remove waste, shorten the flow
TOC
• Remove and manage constraints
TQM
• Continuous Improvement
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Customer Data
Demand = 45/day
On-Time Delivery
Takt Time = 18.2 min 90/60/30 day
6 WEEK Production
Forecast Control Forecasts Customer
Competitive LT = 3 days
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Raw = 5 days Inventory
WIP = 12.1 days 90/60/30 day
6 WEEK Production
Forecasts Customer
FG = 6.5 days Forecast Control
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Lead Time = 23.6 days
Lead Time
Touch Time = 89 min 90/60/30 day
6 WEEK Production
Forecast Control Forecasts Customer
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Constraints
Max Wip = 7.6 days
OTD, Lead Time
CT (67) > Takt Time (18) 90/60/30 day
6 WEEK Production
Forecast Control Forecasts Customer
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Setup Times
CO = 1 hour
OP Margin, Lead Time
CO = 23 min 90/60/30 day
6 WEEK Production
Control Forecasts Customer
CO = Changeover
Forecast
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Maintenance
Uptime = 70%
OTD, Lead Time
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
FTY = 67% Quality
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Who is setting the pace?
OTD, Lead Time
What is the pitch time?
6 WEEK Production 90/60/30 day
Forecast Control Forecasts Customer
y
ekl MRP
Suppliers We ax Order Entry
F Demand = 45 per day
Orders/day 2 shifts
= 36 Takt Time
Lead Time - 34 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
I I
342 81
I
122 202 90
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
Define
Measure
Making it happen Analyze
Improve
Control
Units of Measure
Performance
Limit
Area of Yield Probability
of a Defect Units of Measure
µ
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