Lean & 6 Sigma

Overview

© Divakar Rajamani
 Lesson Objectives
 What is the focus of lean?
 What is sigma and six sigma?
 What is Six Sigma Methodology?
 How does Lean and Six Sigma complement each other?

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 Focus on Customer Value
Speed Quality
Reduce Flow Time
Cost Improve Yield
WIP

LEAN Less SIX SIGMA

Variation
Less Uniform
Inventory Output
Eliminate Non Reduce Variation
Value Added Reduced Less on Value Added
Activities (Waste) Flow-time Waste Activities (Quality)
Improved
Quality

 It is NOT cost reduction, it is process change.

 A better way to get the work done
© Divakar Rajamani Slide 3
 Lean = Reducing Waste

4 Days Non Value

Added

Start Step 1 Step 2 Step 3 Step 4 End

3 Days

Start Step 1 Step 2 Step 4 End

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 Reducing Flow Time: Where is the Focus?
Current Process
NVA VA
95% 5%
NVA VA
Traditional
Improvement

NVA VA
New Focus
VA – Value Added
NVA – Non Value Added or Waste NVA VA

 20% of the tasks account for 80% of the delay

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 Six Sigma = Reducing Variability & Defects

Six Sigma applies statistical tools to business problems

Business Statistical Statistical Business

Problem Problem Solution Solution

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 Lean and Sigma

Lean
Reduce Flow Time

2 4 6 8 10 12 14 16 ……..

Sigma
Reduce Variability in Flow Time

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 Lean Process
Specify Value
Product, capabilities, price,
customer needs

Identify Value
Perfection Stream
-Continuous improvement - Identify actions to get
Kaizen the product to the customer
- Eliminate non-value-add
-actions

Make it Flow
Pull - Make the value-creating
Sync-up with the customer steps flow
demand - Takt time

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 Is there an opportunity to improve…
 Are you chasing for information, approvals or material in order to complete a task
 Are you constantly interrupted when trying to complete a task
 Are you expediting reports, purchases, orders etc.
 Do you gather a group of orders, applications, invoices, resumes, etc. before processing
 Do you find work is lost in the “white space” between organizational silos
 Do you sometimes feel, you were working hard on many things, but completed nothing-switch
over time
 Are you utilization levels nearing a 100%, but all your tasks, projects are yet late or features
compromised on

 Do you work at your convenience or customers convenience?

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 5W’s
 Ask Why 5 Times
 Why is our client, Corporation X., unhappy?
 Because we did not deliver our services when we said we would.
 Why were we unable to meet the agreed-upon timeline or schedule for delivery?
 The job took much longer than we thought it would.
 Why did it take so much longer?
 Because we underestimated the complexity of the job.
 Why did we underestimate the complexity of the job?
 Because we made a quick estimate of the time needed to complete it, and did not list the individual stages needed to
complete the project.
 Why didn’t we do this?
 Because we were running behind on other projects. We clearly need to review our time estimation and specification
procedures.

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 Striving for six sigma Quality
 Quality
 1970 Defects ~ 10%
 1970 Defects < 10%
 1980 “Quality is number one”, Defect<1%
 1985 “Zero Defects”, Defects-ppm
 2005 “6 sigma” quality – 3.4 ppm

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 Striving for six sigma
Classical View six sigma View
“99% Good” (3.8σ) “99.99966% Good” (6σ)
20,000 lost articles of mail per hour 7 lost articles of mail per hour
Unsafe drinking water of almost 15 Unsafe drinking water of almost 1
minutes each day minute every month
5,000 incorrect surgical operations per 1.7 incorrect surgical operations per
week week
2 short or long landings at most major 1 short or long landings at most major
airports daily airports every five years
200,000 wrong drug prescriptions each 68 wrong drug prescriptions each year
year
No electricity for almost 7 hours each No electricity for almost 1 hour every
month 34 years

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 Expectations about Outcomes in Service

Perfection is Perfection is
impossible possible

1 2 3 4 5

Defects are Defects are

inevitable avoidable

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 The customer with a defective product is 100% dissatisfied

 The other 999 good products are invisible

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 Why Defects Occur ?

Worker forgets to put a spring Forget now and then

Forgetting one has

Worker errors or mistakes
forgotten

Defect

 Mistakes will not turn into defects if workers errors are discovered and
eliminated before hand

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 Exercise Why Defects Occur ?
 100% Inspection
 FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY
COMBINED WITH THE EXPERIENCE OF MANY YEARS

 80% Defect Free Products

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 Quality at Source

Defects Own Next End of Line Final

End User
Found by Process Process Inspection

$
Work  Very  Minor  Rework  Significant  Warranty costs

$
Impact Minor Delay Rework  Administrative

$
 Delay in costs

$
Delivery  Reputation
Financial
Impact
$  Additional  Loss of market
Inspection share

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 Six Sigma Process : DMAIC Cycle
Define the project goals
and customer deliverables
(internal and external)

Define
Control the improved What is important? Measure the process to
process’s performance to determine current
ensure sustainable results performance

Control Measure
How do we guarantee
How are we doing?
performance?

Improve the Analyze and

process by
permanently
Improve Analyze determine the
root cause(s) of
What needs to be done? What is wrong?
removing the the defects
defects
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 Why Lean & Six Sigma?
Overall Yield vs. Sigma
(Distribution Shifted ±1.5σ)

Lean Reduces Non-Valued Add Steps

# of Steps ±3σ ±4σ ±5σ ±6σ

1 93.32% 99.38% 99.98% 99.9997%

7 61.63 95.733 99.839 99.9976

10 50.08 93.96 99.768 99.9966

20 50.08 88.29 99.536 99.9932

40 6.29 77.94 99.074 99.9864

Six Sigma Improves Quality of Value Add Steps

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 Lean & Six Sigma
Comparison Basis Lean Six Sigma
Goal Remove waste Reduce variation
Focus Flow focused Problem focused
Benefit Reduced cycle time Uniform process output
Tools Value Stream Map DMAIC Process
5-S Statistical Tools
Setup Reduction FMEA
Cells Cause and Effect
One piece flow Cp and Cpk
Pull Systems Gage R&R
Kanban ANOVA
Visual Controls DOE

Lean and Six Sigma are complementary

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 What do you think?

 If Lean and Six Sigma are such great methodologies, how come everyone is not
using them?

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 Barriers to Implementation
 Culture Limitations  Knowledge Limitations  Management Limitations
 Fear  Lack of training  Lack of leadership
 Time Pressure  Lack of knowledge:  Unprofessional management
 Resistant to change  Management as well as behavior
 Lack of trust among team members  Lack of management commitment
 Poor communication  Lack of team and meeting  Lack of hands-on involvement
skills

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 DR Critical Success Factors
 It is a journey, not a near term destination
 80% of the problems can be solved in 20% of the time – right people in a room and
brainstorming
 Inspection does not build quality into the products
 It is not a new job – it is skills to help you to do your job better
 Change is not hard – it is just that people do not see the value in it for them
 It is “hard to quantify” is not an excuse – then “work hard to quantify”
 It is your responsibility to articulate the $ savings and support with data – management does
not want to leave money on the table – you get paid to put up with pain
 People work within the system – only management can change the system

© Divakar Rajamani Slide 23