Lean Six Sigma

Lean Six Sigma DMAIC Approach

Copyright 2005, AIT Group Inc. All rights reserved.

1

High Level DMAIC Approach
Define
• When did it happen? • Where did it happen? • What is the success criteria?

Lean Six Sigma
Improve
• What does the DOE process plan look like? •What responses are we interested in (Average, Range)? • What variables do we want to optimize? Why?

Measure
• How often does this happen? • What trends have we observed relative to the target? NEM Baseline (IMR) • Is the process capable? • Do we want to reduce variation? • Do we want to shift the mean? Process Capability • What changes have been made to the process? • What possible variables relate to the change ? Process Mapping • What does the process look like? • What does the process look like from the product’s view? • Is the measurement process capable? • Is the test a destructive test? Measurement System Analysis

Analyze
• What is the subgrouping strategy?

• How will we address Org. issues? • How will we address Behavioral issues?

Control

Preliminary Data Analysis

Advanced NEM (XbarR) • What variables are contributing to mean shifts? • What variables are contributing to variation? Components Of Variation / ANOVA • What is causing failure? • What is the impact of failure? • How do we mitigate the risk of failure?

Classification Of Control Issues • What variables do we need to control? • What control methods will be used to ensure gains are sustained? Control Methods •Who is responsible for implementing the control? •Who is accountable for the process results? Control Plan

• Where in the process do we need to scope efforts? • What is the target value? • What are the specs?

DOE Planning Template • What observations did we have during the experiment? • What roles need to be established to run the DOE? DOE Execution • What variables are critical to the process? • How should the critical variables be set? DOE Analysis & Results

SIPOC

• How much waste is in this process? • What is our value added percentage? Value Stream Mapping

FMEA Operator & Product Activity Analysis

Copyright 2005, AIT Group Inc. All rights reserved.

2

Funnel-Down Many Variables to the Critical Few!
x x x xxx x xx x x x x x x x x x x x xx x x x x x x x x

VELOCITY OPPORTUNITY (Reduce Waste)
Value Stream Mapping

VARIATION OPPORTUNITY (Reduce Variation)
Thought Map TMAP SIPOC Detailed Process Map PMAP

Lean Six Sigma

Define

Measure

x x x x x x x x x x x xx x x x x x x x x x x xx x x x xx xx

x’s ny

Product Families Product Flow Analysis Employee Activity Analysis Set-up Reduction

Failure Modes Analysis FMEA Measurement System MSE Numerical Evaluation of Metrics (NEM) T-Test, Chi Square, ANOVA, COV Design of Experiments DOE Regression Analysis

X’s

Analyze

Ma

Fe w

Material Replenishment Improvement Considerations Workplace Design 5S Implementation

Improve

Control

xx x x

Control Strategies Standard Work Performance Metrics Mistake Proofing

Y=f(x)

Copyright 2005, AIT Group Inc. All rights reserved.

3

Define
Project Charter

Measure

Analyze

Lean Six Sigma

Numerical Evaluation of Metrics How is the
process performing today?

Measurement System Evaluation
Gage R&R (ANOVA) for Labor Cost/T
Components of Variation
100 %Contri bution %Study Var 500 400 50 300 200 Gage R&R Repeat Reprod Part-to-Part

Hypothesis Testing
ChiSquare
Gender

Gage name: Date of stud y: Reported by: Tolerance: Misc:

By Sample

0

Sample

1

2

3

4

5

R Chart by Administrato
50
1 2 3

By Administrato
UCL=43.76 500 400 R=17 300 200

Sample Range

40 30 20 10 0 0

What variables are causing variation? ANOVA
One-way ANOVA: Total No E rrors versus Hiring Location (Site) Source Hiring Loc Error Total DF 3 117 120 SS 2.12 269.95 272.07 MS 0.71 2.31 F 0.31 P 0.821 S = 1.519 R -Sq = 0.78% R-Sq(adj) = 0.00%
Boxplot of Total No Errors by Hiring Location (Site)
10 8 Total No Errors

Sample Mean

Av erage

Project Justification
Product Line Brackets Wheels Closures Shafts Sales $ (YTD) $ 70.3 Million $ 60 Million Gross Margins $ 2.8 M / 39% $ 2.3 M / 38% $ 1 M / 33% $ 1 M / 40% Production Volumes 80 Million 94 Million 15 Million 5.4 Million 1.3 Million 4.5 Million 9.3 Million $ 31.1 Million $ 21.5 Million

Thought Map
Problem Resolution Methodology
Define
Baseline Process

Percent

LCL=0

Administ rato

1

2

3

Xbar Chart by Administrato
500 400 300 200 0 UCL=365.8 Mean=348.4 LCL=331.1
1 2 3

Administrato*Sample Interaction
500 400

Administrato
1 2 3

T-Test
Weekly vs. Quarterly Grant Date
1/1/02 – 12/31/03
Two-Sample T-Test and CI : Weekly , Quarterly N W eekly 105 Quarterly 8 Mean 55.41 55.50 StDev 8.63 8.21 SE Mean 0.84 2.9 Estimate for difference: -0.089083 95% CI for difference: (-7.056468, 6.878301) T-Test of difference = 0 (vs not =): T-Value = -0.03 P-Value = 0.977 DF = 8 X W = 55.41 X Q = 55.50

Separated Operations $ 1.7 Million Seals Other Products $ 5 Million $ 4 Million

$ $
Process

$ 0.3 M / 19% $ 0.7 M / 7%

Market Comments High vol -Growing Cylindrical High vol. Growing Autom. Large Diameter Old Equip. Hydraulic Small batches High Labour Old equip. Automotive

6σ Project Phases
Establish Project Scope

300

200

Sample

1

2

3

4

5

Measure

Characterize Processes ID Process Failure Modes

Analyze

Evaluate Measurement Systems ID Critical Variables

$ 0.3 M / 17%

Improve

Implement Process Improvements

What is my project strategy?

Data Integrity ?

6

Hiring location is not a significant contributing factor to error s!

Conc lusions:
σ ˆ
W

4

= 5.63

σ ˆ
Q

= 8.21

There is no significant difference between weekly and quarterly grant dates.

2 0 Field Sales TO Hirin Loca g tion (Site) TO - RML

Control

Control/Maintain Process Improvements

SIPOC
Process Name: Process Owner: Suppliers
(Providers of the required res ources )

Process Map
Outputs
(Deliverables from the proces s )

Copper Tolling Eric Sandford Inputs
(Resources required by the process )

Customers
(Stakeholders who place the requirements on the outputs)

Product P ortfolio Plan

Business Plan

Failure Modes and Effects Analysis:
Quote

Failure Modes & Effects Analysis
Failure Mode
(Describe what could go wrong.)

(Top level des cription of the activity)

Requirements Copper Manager Orders quantity from Delphi plants to merchant Quantity per merchant. Delivered/Timing
Requirements received from Delphi Plants

Requirements
Copper delivered to suppliers for transformation

Identify Product Portfolio Plans

Determine Business Opportunities

Customer Directed?

Yes

Business Pursued? No

Yes

Proceed With Sourcing
C Profit M argin C Costs to Do

Part/process
No Quote Letter to Ford

Failure Effects
(How does the failure affect the function of the step?)

Cathode delivered on time, quantity, Fabrication Suppliers right brand, and quality

Delphi accounting purchasing

Index used, timing & quantity's delivered & reported. Forecast from D Plants (Customer)

Accuracy Copper Tolling Level & Stable

N! Custom er D irected Busine ss N Vehicle Volume S CI0 (Budge t, Resources) N Vehicle Timing No S PI (Budget, Resources) N Content N! ‘In You r Head’ N Ford Goals & Objectives N Personalitie s/Relationship s S Opportunity Screener (Budget, Resourc es) C Customer Strategy/Portfolio C Divisional Strate gies S Divisiona l Processes N Divisio nal Inte lligence Apply S Divisiona l Quoting Philosophy Business

(What is the function of each step?)

S E V

Causes
(What is the root cause reason for the failure?)

O C C

Controls
(What controls are currently in place to catch or prevent this failure?)

D R E P T N

Actions
(What actions are being done to eliminate the cause?)

No Quote
C Doesn’t F it Divisio nal Product Strate gy C Doesn’t F it Pursuit Plan C Poor Busine ss Ca se

Delphi Plants PC&L

Lessons Learned

No

Yes

Pursued?

Merchants supply quotes Delphi legal risk management (t.o), purchasing Buyer and receipt clerk

Global sourcing quotes Bailment contract

Selection of merchants based on Risk protection
When fabricated product is paid

VOC
Payment to fabrication supplier Per terms correct + amount Inv entory accounting and costs +

C Budget Disconne cts C Resourc e Disconnects C Poor Docum entation

Execute Divisional Strategic Analysis
Forecast Strategy

Issue Invoice

Invoice is incorrect Customer has dispute with invoice Slow response by business unit Lack of funds budgeted for payment

Customer disputes invoice delaying payment (40 days) Delay in payment due to invoice dispute (40 days) Delay in payment due to dispute (40 days) Delay in payment process (30 days)

5

Price, Quantity or Work-scope does not agree with quote Miscommunication between ATL and Billing Heavy workload creating conflicting priorities Limited budget allocation for weekly payments

4

Pricing database

8 4 0

Need to study dispute issues for reduction in disputes, Focus on Price Strengthen ATL communication with Billing by incentivised roles

Continuous Improve ment

N! Relationships N! Strategic Im portance N ROLR (Right of Last Refusal) C Red Flags C Strengths C Divisional Prod uct S trategy C Pursuit Plan

Critical X’s

Shared Information Leve l Knowledge Base Leve raged Sy nergies

Note: Not part of strategic analysis for selling process

Review and confirm invoices Dispute resolution & reissue Approve payment

5

3

None

7 5 5

Dacor inv oices, plant receipts, fabrication buyer P.O. 's

Accurate

Info Shared Between Divisions?
Unified Front to Custom er Strategic Analysis for S ellin g (compariso n & synergies applied) Divisional Intelligence & L essons Learn ed (com parison & sy nergies applied) Philosophy of Quoting Techniques (comparis on & sy nergies applied)

Yes

Identify Relationship Broker -or-Share Knowledge
C T ech S how s C Custom er Contact Calls C Influe nce Peddling C! Divisional S trategic Analysis

5

3

None Accounts payable policy

7 5 5 6 5 0

Reduce disputes to alleviate workload

4

3

Delphi cost accounting Supplier cost accounting P.O. price entry Platts

Delphi inventory records Inv entory Reconciliation

Accurate quantity's and value

Delphi Fabrication Suppliers

What is the project scope?
P.O. price and market index, quantity

Accurate

Payment to merchant = All-In Costs

Per terms correct amount

Merchants

Key: ! - Critical N - Noise S - Standard Operating Procedure C - Controllable

No

Complete Delphi Selling Strategy
C Linked Divisional Strategic Analysis C! Unlinke d Divisional Strat egic Analysis

Actions for improvement and next focus area identified

• ATL’s compensation will be dependent on customer satisfaction scores to provide incentive for improved communication

What does the process look like?

• Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold • Need to further study source of disputes to resolve disputes

How do we mitigate process risk?

Work with Customer to increase budget allocation for payments

Product Families

Value Stream Map
Where should we focus?
PC & L 4 week rolling foreca st 6 week rolling foreca st Supplier Weekly Order Weekly Orde r Daily Ship Schedule Customer/ Customer Distributor Deman d/week: Part A = 50 500 Weekly Build Schedule Part B = 120 1200 Part C = 70 700

Process Flow & Employee Activity Analysis
AREA NAME : BEFORE - Car rier Asse mbly - Ball Bearings PREPAR ED BY: SUPERVI OR: S NOTE: Depict rough scale o f equip ment layout; a nd, dra w a point to poi nt diagr am of t he com plete pr oduct flow DATE:

40

The Seven Wastes D - Defective Production
6

OVEN

35 33 31

21

Press
2x/ week 2x/ day

19

23 39

Tool Box
13

Bench
26 14 2 4 9 3018 12 16 20 44 34 38 42 32 22 8 24

Trash
10

O - Over Production T - Transportation W - Waiting I - Inventory M - Motion P - Processing

Anneal

Pickle

Draw

Straightening

Point/Chamfe r

Shipping

Vice

28 36

41

I

60 coils

Where is the waste occurrin Copyright 2005, AIT Group Inc. All rights reserved. g?
6 coils 20 coils 3000

Part 15 Box17

I

pcs

29 25 3 37 27

1 11

5

43

7

Takt = 240 min C.T. = 200 mi n D.T. = 0.5% FTQ = 100% Lot Size =

Takt = 240 min C.T. = 200 mi n D.T. = 1% FTQ = 100% Lot Size =

Takt = 19 min C.T. = 15 min D.T. = 4% FTQ = 99% Lot Size =

Takt = 20 sec C.T. = 20.4 sec D.T. = 3.1% FTQ = 99% Lot Size =

Takt = 20 sec C.T. = 10 sec D.T. = 1% FTQ = 100% Lot Size =

C/O Time = 3 0 m

C/O Ti me= 10 min # of Shifts = 2 WIP = 4 coils

C/O Time = 3 0 min # of Shifts = 2

C/O Ti me =1 hr

C/O Time = 1 5 min # of Shifts = 2

Parts Rack

# of Shifts = 2 WIP = 3 coils

# of Shifts = 2 WIP = 1500

WIP = 8 coils 1

pcs

WIP = 100 pc

Copyright 2005, AIT Group Inc. All rights reserved. 4

Improve
Design of Experiments
Design of Experiments:
Price Variance = f(OTD, Sp Price, LT, Profile)
Pareto Chart of the Standardized Effects
(response is Var, Alpha = .10)

Control
Control Strategies
Type of Control (Fix, M inimize, Standardize, Measure & Monitor, Communicate , Audit)
Fix , Communicate, Audit

Lean Six Sigma
Control Set Point or Range
All computers with screen savers Personal Business Plan and Six Month Reviews

Detailed Description of Cont rol
Install or en able screen savers on all computers Establish a F acilities Coordinator to be responsible f or DRL facilities needs

Facility Affected (Gas, Electric, Wate r)
Electric

Setting or Tolerance Prior to Cont rols
Random im plementation

Management Requirements or Organization al C hange s
Comm unicated at DRL meeting, part of securit y audit

Date Implemented or Projected to be Implemented
April, 2002

Responsible Individual
Jacovides, Director Steve, Security

ANOVA:
Factor Customer Profile Special Price Lead Time On-Time Delivery Type fixed fixed fixed fixed Levels 2 2 2 2 Values Tier 1 Tier 2 N Y Post LT Prior LT N Y

Standardize, Audit

Gas, Electric, Wat er

No indiv idual responsible

Change in job de scription, PBP's

May, 2002

John Biaf ora

Fix, Measure

Reduce wat er flow through SEM by replum bing and installing chiller

Water

5 gal/ min, continuous

0 gal /min

Authorize chiller rep air

June, 2002

John Biafora, Chri s Thrush

OTD

Fix, Measure

Reduce wat er flow through v acuum chamber

Water

2 gal/min, continuous

1 gal/min, as needed Temperature control, now flow only when using instrument

Authorize replumb

June, 2002

John Biafora, Chri s Thrush

Fix, Measure, Communicate

Thermostat control of outgoing water on MTS unit

Water

2.4 gal/min, continuous

Authoriz e purchase of temperature sensor

June, 2002

John Biafora, Tom Ellis

Sp Pric e
Fix, Measure Reduce flow through Hall Ef fect system Water 4 gal/min, continuous 2.5 gal/mi n, unit on only when doing measurem ent s Authorize replumb, communicat e need to have flow only during usage June, 2002 John Biafora, Joseph Heremans

LT

Profile

Main Effects Plot (data means) for Var
0.0 0.5 1.0 1.5
LT Po

2.0
LT N

2.5

Tie

r1

r2 Tie

N

Y

Pri

or

st

Y

Source Customer Profile Special Price Lead Time On-Time Delivery Error Total

DF 1 1 1 1 11 15

SS 473 40905 13053 75488 130267 260186

MS 473 40905 13053 75488 11842

F 0.04 3.45 1.10 6.37

P 0.845 0.090 0.316 0.028

Fix, Measure

Reduce flow through e-beam ev aporator

Water

8 gal/min, continuous

6 gal/min

Authorize replumb

June, 2002

John Biaf ora, Chris Thrush

Regression

Fix, Measure

Reduce flow through environmental test cham ber

Water

4 gal/min, continuous

3 gal/mi n, flow only during testing 94 k ft^3/min 36% of total time

Authorize replumb

June, 2002

John Biaf ora, Tom Ellis John Biafora, all lab users John Biaf ora, Fred Scott

Fix, Measure, Communicate

Manual operation of exhaust hoods

Gas, Electric

94 k ft^3/min continuous Random excursions in temperature

Placard

June-July, 2002

Fix, Measure, Communicate

Adjust pre temperature air box per season

Gas, Electric

65 - 72 F

Authorize facilities study

June-July, 2002

170

140

110

80

Special Pricing and On-Time Delivery are Significant Sources of Price Variation in the Co-Op System
Profile Sp Price LT OTD

Fix, Standardize, Communicate

Turn off unused equipment at 7:00 PM

Gas, Electric, Wat er

None

Turn of f specific exhaust and return air systems that do not jeopardize safet y requirements

Lab Director authorize and comm unicate at group meet ing

May, 2002

John Biafora and Jones Lange and LaSalle representative John Biafora and Jones Lange and LaSalle representative

Var

Standardize, Monitor, Measure

Program controls of specif ic exhaust and return air units that can be s hutdown from 6:00 p.m. to 6:00 a.m . Mon. - Fri.

Gas, Electric

None

Shutdown specif ic exhaust and return air units from 6:00 p.m. to 6:00 a.m .

Lab Director autho rize

June-July, 2002

50

Fix , Standardize, Audit, Measure & Monitor

Curtail all no n-essential po wer usage during peak electrical draw from the grid. Credit from electric supplier.

Electric

None

Call f rom Detroit Edison to implement power curtailment

Lab Director authorize and comm unicate at group meet ing

July-August, 2002

John Biaf ora

How do we optimize critical inputs?

How do we sustain the gains?

Standard Work
Standard Job Sheet
Part N umber Part D escri pti on Part F amil y Dat e: Revisi on: B 2400172-1 Impell ar Casti ngs

Cell or Process Design/To-Be Work Flow

15s

200s

350s

62s

401s

Oper ator 1

Oper ator 2

Oper ator 3

245s

190s

25s

33s

161s

191s

Quality Chec k

Safet y

Standard Wor k Takt T ime in Proc ess 600s

Lead Ti me

Number of Operators 3

Measure & Monitor
Liner Web Break Downtime (min) by Month

Moving Range

What does the future work flow look like?

Individual Value

98
1000

99

Material Replenishment

500 1 0 3.0SL=253.4 X=167.4 -3.0SL=81.44 0 10
10/98

Subgroup
Month

20 99

600 500 400 300 200 100 0

3.0SL=105.6 R=32.33 -3.0SL=0.00E+00

Have we met our goals?
Copyright 2005, AIT Group Inc. All rights reserved. Copyright 2005, AIT Group Inc. All rights reserved.

5

Author

Lean Six Sigma

Steven Bonacorsi is a Senior Master Black Belt instructor and coach. He has trained hundreds of Master Black Belts, Black Belts, Green Belts, and Project Sponsors and Executive Leaders in Lean Six Sigma DMAIC and Design for Lean Six Sigma process improvement methodologies. Steven is a board member for the Boston Chapter of the Industry of Industrial Engineers. Full Bio: http://www.linkedin.com/in/stevenbonacorsi Lean Six Sigma White Belt Certification: • Add Lean Six Sigma White Belt (Basic Awareness) Training and Certification to your Resume or Job Skills. • Learn topics from one of the original Master Black Belts and world experts on Value Stream Mapping, 5s, Process Capability, Deployment Planning, Roles and Responsibilities, FMEA Risk Analysis, Control Plans and more. • Certificates will be signed for all who complete the 2 hour training session.

Copyright 2005, AIT Group Inc. All rights reserved.

6

Learn More about The AIT Group
http://www.theaitgroup.com

Lean Six Sigma

Copyright 2005, AIT Group Inc. All rights reserved.

7

Who is AIT?
• AIT is a premier provider of Lean, Six Sigma and Supply Chain solutions. • Solutions are customized to the customer – not one size fits all. • The company was started in 1998 by three individual that recognized extremely early in the industry how well Lean, Six Sigma and Supply Chain disciplines integrate. • Our goal is the complete transfer of knowledge via client specific solutions – not training. • Your instructors from AIT are Certified Master Black Belts and Lean Experts. • We have worked with many different clients and some of the largest companies in the world. • We have Offices in the US, Europe, Mexico and China.

Lean Six Sigma
The AIT Group is an international consulting firm that has been specifically designed to help companies increase profitability by improving overall business performance and customer satisfaction through the integrated application of:

Lean Value $ Six Sigma

Supply Chain Mgmt.

www.theAITgroup.com

The AIT Group excels in implementation … not recommendation!
Copyright 2005, AIT Group Inc. All rights reserved.

8

Sign up to vote on this title
UsefulNot useful