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

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

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) • If you propose : “Why don’t 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 4 .Genesis of Scientific Management • Workers believe it is best to go slow instead of fast (in 95% of the cases.

Principles of Scientific Management • It gives management very different duties. management does a part of work (which were earlier done by workmen) • 2 1 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 5 . participate and educate. 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. not mere theory – Division of work.

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. lifts it. Pennsylvania 6 .Proof • Observations of Frederick Winslow Taylor (1900) • Pig of iron weighs 92 pounds (42 kg) • A worker bends down.

they handled 17 kg of iron ore • Productivity varied drastically • Exhaustion set in very soon though the workman worked the whole day. Coal Iron Ore 7 .Science of Shoveling • Taylor observed the work of shoveling • Workers handled 1.7 kg with a shovel • With the same shovel. • Needed to research and find out optimal capacity of the shovel.

8 . the workmen made one pile • Gradually decreased the weight. • After one stage.the experiment • Started with weight of 16-17 kg on the shovel.Shoveling. This happened at 9. • 8-9 kg was taken as the optimal weight on the shovel that could generate maximum productivity (size of the pile) in a day. it started decreasing.75 kg. the size of the pile kept growing larger as the ore weight was reduced in stages.

000 in 1901. push onto the pile – Relieve the arms from the effort • End result: Taylor reduced the number of workmen from 500 to 140.the experiment • Every day. in the morning. etc. his assigned work location for the day – Paper 2 (white or yellow): white – he has earned 60% extra wages. the workman had 2 sheets: – Paper 1 explaining the tools he had to use. yellow: he has not earned • If yellow. the problem needs to be addressed – Can be due to sickness. – Can be due to lack of application (shirking) • Application of the right kind of force : the physical movement – Lean using the body weight. profit increase of $75. 9 .Shoveling. weakness.

Lean Concepts: Origins 10 .

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 11 .

Batch manufacturing • • • • Longer lead times Higher Work in Process (WIP) Difficult to trace quality problems Problems of re-work 12 .

Assembly line • A long conveyor belt is in operation • One component. one operator / robot at a time. stage-wise. 13 .

Assembly line… Other Benefits • Immediate stoppage on discovering defects • No WIP • Predictable output 14 .

Lean Concepts – The Value Chain Perspective 15 .

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 16 .

– Tangible – Measurable • Lean – Cost effective – Meets targeted costs.Lean Principles • The focus is on the process: efficiency improvements. time – In line with allotted manpower / people • Lean focuses on value – A process that adds value to the service / operation 17 .

5 principles • Ref: Womack J. & Jones.P. D. Value Pull The Value Stream Perfection Flow 18 .T.

Travel agent prefers visit. Call up travel agent and speak 30 4.Principle 1: Value Example: Plan & execute a family holiday 1. Check holiday options online 60 3. Visit travel agent 6. See more brochures. sends brochures over 10 e-mail 60 5. Discuss with family members about choice of 120 location: Domestic / International 2. discuss and finalize 60 (Time in minutes) Value add Waste 19 .

De-plane.Book a taxi 60 13.Travel to sea side resort 14. Travel agent sends tickets 120 8.Principle 1: Value 10 7. wait for immigration checks 20 12. Check-in. security screening 60 480 10. Take a taxi to airport 9.In-flight time 11. Spend 3N/4D and return home 60 20 .

Principle 1: Value • Lesson? Value-add Time Waste TOTAL (in Minutes) 700 450 1150 61% 39% 21 .

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 22 .

Principle 2: Value Stream BOTTLER Bottler warehouse Reliance warehouse Reliance store Home 23 .

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 24 .

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 25 .

Principle 3: Flow • Everyday example – Preparing letters before dispatch • Industry example – Automobile Assembly line manufacturing – Insurance registration & processing • Key Metrics – Throughput i. output per hour (or) per day – Takt time 26 .e.

• An operation is performed on one product at a time. the product moves in sequence 27 .Principle 3: Flow • One operator can manage multiple machines • A problem at one machine will be immediately highlighted.

Several products are produced and stocked. We cannot identify the defectives 28 .Principle 3: Flow Batch mode of production.

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

Principle 3: example .Boeing 30 .

Principle 4: Pull • Customer driven • Customer can be a process B which follows process A • Applicable to services as well as manufacturing Example 31 .

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? 32 .

dispatches to store. an auto replenishment order is generated by system. Louis Philippe.Principle 4: Pull • Auto replenishment • Set Minimum Base Qty: Example Size S: 2 pc. • Whole process could take 24 hrs in case of a local Distribution Center • Actively followed for brands: Arrow. L: 2 pc. • Warehouse receives order. M: 4 pcs. XL: 2 pc • Whenever stock in size M falls below 4. etc 33 .

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 34 .

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 35 .

a single location based manufacturing was initiated • Lead time of 2 days only. no non-value adding activity • Distance traversed = 80 km 36 .Principle 5: Perfection Car Assembly Plant Float Press Encapsulate • With active collaboration.

Principle 5: Perfection • A pantaloons store • Problem statement: increase SSPD (Sales Per Square foot per day) • Options: buy brands or lease out space 37 .

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 38 .

THANK YOU 39 .

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