#29 LEAN in the Lab 7

8/9/2019 #29 LEAN in the Lab 7

1/37

D efineMeasure

Analyze

ImproveControl

OperationalExcellence

By Lee Olson

Presentation to INFORMS

Six Sigma

Six Sigma: DMAIC; Y=f(x)

Is it a Goal, a Measure, a Process,a Tool or an expletive deleted?


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DefineMeasure

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Operational Excellence Training

Objectives

Understand the Basics of the Six Sigma Program Understand How Six Sigma Relates to Lean, TOC, TQM

(Theory Of Constraints; Total Quality Management)

Ability to Define a Strategy and Roadmap for Success


3/37

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Define

Is it a Goal, a Measure, a Process, a Tool or an expletivedeleted?

Yes


4/37

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Measure

Analyze

Improve

Control


Define

Six Sigma Is a management methodology

Customer focused

Data driven decisions

Breakthrough performance gains

Validated bottom line results


5/37

Define

Measure

Analyze

Improve

Control


Customer Focused

Our Performance Compared to Competitors

Importa

nceto

Custom

ers

Were Better Theyre Better

High

Moderate-to-Low

Price Complaints

OTD Quality

Training

Complete

Shared Goals

Top 5 Action Items

Driver Action Description Status Status Description Owner

OriginalDue

Date

Current

Due Date

LateSupplierDeliveries Monthly reportingtosuppliers ondelivery &

quality metrics.

On

track

Report Cards Implemented. Adam 5/21 5/21

LateSupplierDeliveries Arrangefacetoface meetings with top

offenders.

On

track

Meetings Completewith top10

Suppliers.

Beth 6/15 6/15

LateSupplierDeliveries Reviewandapprovesupplier's correctiveaction

plan.

Caution CorrectiveActionPlanin Placefor2

majorSuppliers

Carlos 7/15 9/15

xyz CellAlways Late KaizenEvent tofocus onimprovingthroughput

by 40% andimprove laborefficiency by 35%

On

track

Event held5/1. 25% throughput

improvement in May. Labor Efficiency

Increaseof 30%

Doreen 5/21 5/21

Unrealistic PromiseDate Focus on custom products toproviderealistic

ATP basedon inventory andleadtime of

components.

ProblemContinuedlack ofprogress. Re-

structuredand focusedteam.

Developingdetailedplan.

Earnest 6/15 8/15

ON TIME DELIVERY (sample)Thepercentageof sales orderline items that shipcompleteon orbeforet he original customerpromisedate, for

all lineitems shippedinthe month.

On-Time Delivery

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ja n F eb Mar A pr Ma y Jun Ju l A ug Se p Oc t No v D ec

Target

Pareto of Drivers

0%

25%

50%

75%

100%

Late

Supplier

Deliveries

xyzCell

Always

Late

Unrealistic

Promise

Date

Orderson

CreditHold

Low

Yield

onpartabc

Engineering

Change

Orders

Reason

%Impact


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Measure

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Control


Data Driven Decisions

Why should we test or inspect Y, if we know this relationship?

Y

Dependent Output

Effect

Symptom

Monitor

Response

X1 . . . XN

Independent Input-Process

Cause

Problem

Control

Factor

To get results, should we focus our behavior on the Y or X ?

f (X)f (X)Y=Y=


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Control


2 308,5373 66,8074 6,2105 2336 3.4

2 308,5373 66,8074 6,210

5 2336 3.4

PPMPPM

Breakthrough performance gains

Sigma is a statistical unit of measure which reflects process

capability. The sigma scale of measure is perfectly correlated to such

characteristics as defects-per-unit, parts-per million defective, and

the probability of a failure/error.

(Distribution Shifted 1.5 )

Process

Capability

Process

CapabilityDefects per Million

Opportunities

Defects per Million

Opportunities


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DefineMeasure

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Control


Validated bottom line results

Price

Increase

MaterialC

osts

VolumeInc.with

Leverage

Manufactu

ring

SG&A

VolumeInc.No

Leverage

Taxes

Labo

r

Workin

gCapital

General-5%Price

Reduction

Impacto

nBotto

m

L

Assuming a 10% change in the factor

Factors


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Define

Measure

Analyze

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Control


Define

Methodology Define

Measure

Analyze

Improve Control


10/37

Define

Measure

Analyze

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Control


RoadmapExample

Next Project DefineCustomers, Value, Problem Statement

Scope, Timeline, Team

Primary/Secondary & OpEx Metrics

Current Value Stream Map

Voice Of Customer (QFD)Measure

Assess specification / Demand

Measurement Capability (Gage R&R)

Correct the measurement system

Process map, Spaghetti, Time obs.

Measure OVs & IVs / Queues

Analyze (andfix the obvious)Root Cause (Pareto, C&E, brainstorm)

Find all KPOVs & KPIVs

FMEA, DOE, critical Xs, VA/NVA

Graphical Analysis, ANOVA

Future Value Stream Map

ImproveOptimize KPOVs & test the KPIVs

Redesign process, set pacemaker

5S, Cell design, MRS

Visual controls

Value Stream Plan

ControlDocument process (WIs, Std Work)

Mistake proof, TT sheet, CI List

Analyze change in metrics

Value Stream Review

Prepare final report

Validate

Project $

Validate

Project $

Validate

Project $

Validate

Project $Celebrate

Project $


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Develop a focused Problem Statement and Objective Develop a Process Map and/or FMEA Develop a Current State Map Identify the response variable(s) and how to measure them Analyze measurement system capability Assess the specification (Is one in place? Is it the right one?)

Practical

Problem

Problem

Definition

Characterize the response, look at the raw data Abnormal? Other Clues? Mean or Variance problem?

Time Observation Spaghetti Diagram Takt Time Future State Maps Percent Loading Standard Work Combination Use Graphical Analysis, Multi-Vari, ANOVA and basic

statistical tools to identify the likely families of variability

Problem

Solution

Identify the likely Xs 5S Set Up Time Reduction (SMED) Material Replenishment Systems Level Loading / Line Leveling Cell Design Visual Controls Use Design of Experiments to find the critical few Xs Move the distribution; Shrink the spread; Confirm the results

Problem

Control

Mistake Proof the process (Poka-Yoke)

Tolerance the process Measure the final capability Place appropriate process controls on

the critical Xs Document the effort and results Standard Work TPM

Identify

Problem

Strategic Link to Business Plan defined in Project Selection Process Defined Business Impact with Op Ex Champion support Structured Brainstorming at all organizational levels Cause and Effect Diagrams identifying critical factors Primary and Secondary Metrics defined and charted Multi-Level Pareto Charts to confirm project focus

What do you want to know?

How do you want to see what it is that you needto know?

What type of tool will generate what it is that youneed to see?

What type of data is required of the selected tool?

Where can you get the required type of data?

ProblemSolving

Plan Execute

Execute Plan

Crane Co. Op. E . Methodology Originated by MBBs; D. Braasch, J. Davis, R. Duggins, J. OCallaghan, R.

Opera

t ionalE

xce

llen

ce

Met h

odolo

gy

Based in part on Si Sigma Methodology developed by GE Medical Systems and Si Sigma Academy, Inc.


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DefineKey Items

Customers, Value, Problem Statement Scope, Timeline, Team

Primary/Secondary & OpEx Metrics

Current Value Stream Map

Voice Of Customer (QFD)(Quality Function Deployment)


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Measure

Analyze

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Control


Project SelectionImpact

Business Impact Revenue Growth

Cost Reduction

Capital Reduction

Key Business Objectives

On Time Delivery

Lead Time

Quality

Customer Satisfaction

Impact on Operational Excellence Metrics


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Control


Evaluate and Rank SuggestionsEffort and Risk

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


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Control


Evaluate and Rank Suggestions

Example tool to rank projects

0106-01 Project Rating.xls


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ProjectRanking

1

2

3

4

5

6

7

8

9

0

1

2

3

4

5

1 2 3 4 5

Effort

Impac

t

Project

Number

Risk =

Ball Sizen

Example chart to rank projects 0106-01 Project Rating.xls


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Measure

Analyze

Improve

Control


Measure

Establish measurement capability Validate the database (transactional)

Gage R&R (Repeatability & Reproducibility)

Calibration is not enough

Many (or most) measurement systems are not capable

How good is the data you are using to make decisions?

Fix the measurement system

Enables calculation of process capability

Enables calculation of alpha & beta risks

This step is often skipped


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Define

Measure

Analyze

Improve

Control


Analyze(and fix the obvious)

Find all KPOVs & KPIVs(Key Process Output Variables; Key Process Input

Variables)

FMEA, DOE, critical Xs, VA/NVA

(Failure Modes Effects Analysis; Design Of Experiment)

Graphical Analysis, ANOVA

(Analysis Of Variance)

Future Value Stream Map


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Define

Measure

Analyze

Improve

Control


Improve

Optimize KPOVs & test the KPIVs(Key Process Output Variables; Key Process Input

Variables)

Redesign process, set pacemaker

5S, Cell design, MRS

(Material Replenishment System)

Visual controls

Value Stream Plan


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Measure

Analyze

Improve

Control


Control

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


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Measure

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Control


Basic ImplementationRoadmap

Understand and Define

Entire Value Streams

Deploy Key Business Objectives- Measure and target (metrics)- Align and involve all employees

- Develop and motivate

Define, Measure, Analyze, Improve

Identify root causes, prioritize, eliminate waste,make things flow and pulled by customers

Control-Sustain Improvement

-Drive Towards Perfection

Identify Customer Requirements

Vision (Strategic Business Plan)

Continuous Improvement (DMAIC)

Identify Customer Requirements


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Hoshin

Key: Impact q Owner r SupportType in --> 4 l m

1.2 6 r q1.1 5 r q r r r r

3.2 4 q r3.1 3 q r

2.2 2 r q2.1 1 r r r r r r q

3.0

2.0

1.0

1

2

3

4

5

6

7

8

Resource

Implementleanconceptsintop3volumelines

establishparetoofdriversforOTD

IT Operations

Quality

Engineering

Maintenance

Marketing

Leadershaveabilitytomapavaluestream

Metricsmoduleinallappropriatetrainingsequences

Trainingprojectsdemonstrateflowdownofmeticsto

operationallevel

Developcultureofteams

ImproveCustomerFocus

Educate/GetEveryoneInvolved

ImprovetheMetrics

Training

Establish tracking of OTD in every cellImprove On Time Delivery to 98%

Trainworkers inhow our products areusedby our major customers

Complete1LeadershipLGBtrainin

gcourse

Traineesparticipateincustomersu

rvey

Complete3functionalLGBtraining

courses

Bringrepsfromtop10customersinforplanttours

100%CompletionofLGBProject

s

Conduct interviews with top 10 customers

Train functional leaders as LGBs

Train leadership team as Lean Green Belts (LGB)

Your Annual Breakthrough

Objectives

YourManager's1-Year

Breakthrough

Objectives

Indicator'sandGoals

Benefits


23/37

Top 5 Action Items

Driver Action Description Status Status Description Owner

Original Due

Date

Current

Due Date

Late Supplier Deliveries Monthly reporting to suppliers on delivery &

quality metrics.

On

track

Report Cards Implemented. Adam 5/21 5/21

Late Supplier Deliveries Arrange face to face meetings with top

offenders.

On

track

Meetings Complete with top 10

Suppliers.

Beth 6/15 6/15

Late Supplier Deliveries Review and approve supplier's corrective action

plan.

Caution Corrective Action Plan in Place for 2

major Suppliers

Carlos 7/15 9/15

xyz Cell Always Late Kaizen Event to focus on improving throughput

by 40% and improve labor efficiency by 35%

On

track

Event held 5/1. 25% throughput

improvement in May. Labor Efficiency

Increase of 30%

Doreen 5/21 5/21

Unrealistic Promise Date Focus on custom products to provide realisticATP based on inventory and leadtime of

components.

Problem Continued lack of progress. Re-structured and focused team.

Developing detailed plan.

Earnest 6/15 8/15

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

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Target

Pareto of Drivers

0%

25%

50%

75%

100%

Late

Su

pplier

Deliveries

xyzCell

A

lways

Late

Unrealistic

Promise

D

ate

Orderson

Cred

itHold

Low

Yield

onpartabc

Engin

eering

Change

Orders

Reason

%I

mpact

D fi


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Does it work?.

Source: American Customer Satisfaction Index, U Michigan, HBR, 2001

199973

companies

RalstonPurina

Quaker OatsHilton Hotels

Coca-ColaUnilever

etc.

The top companies in Customer Satisfaction grow MVA at

nearly twice the rate of their poor-performing counterparts.

$23

$42

0

10

20

30

40

50

Low High

Customer Satisfaction Index Score

Ma

rketValueAdded

In Billions $

D fi


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What about Lean, TOC, TQM

Six Sigma Remove defects, minimize variance

Lean

Remove waste, shorten the flow

TOC

Remove and manage constraints

TQM

Continuous Improvement


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Value Stream Map - Current State

Customer

Demand = 45 per day2 shifts

Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts

CT= 67 minCo= 23 min

FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily

90/60/30 dayForecasts

Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts

Competitive Lead Time= 3 Days

Takt Time= 18.2 Minutes

Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

Customer Data


27/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

Competitive LT = 3 days

Takt Time = 18.2 min

Customer DataOn-Time Delivery

Demand = 45/day


28/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

Raw = 5 days

WIP = 12.1 days

FG = 6.5 days

Inventory

Flow of Value


29/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

Touch Time = 89 min

Flow of ValueLead Time

Lead Time = 23.6 days

Constraints


30/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

CT (67) > Takt Time (18)

ConstraintsOTD, Lead Time

Max Wip = 7.6 days

Setup Times


31/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

CO = 23 min

CO = Changeover

Setup TimesOP Margin, Lead Time

CO = 1 hour

Maintenance


32/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

MaintenanceOTD, Lead Time

Uptime = 70%


33/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

QualityFTY = 67%

Flow of Value


34/37

Customer


Stamping

342

CT=1sec

Co=1 hr.

Uptime=85%

S. Weld # 1

CT=3 min

Co=10 min.

Uptime=70%

I

I

I

ICoils5 days

CT= 15 min

Co=0 min.

Uptime=100%

2 shifts


FTY = 67%2 shifts

ShippingI

I81202122

Assembly Test

90

1XDaily


Order Entry

ProductionControl

MRP

6 WEEKForecast

Suppliers WeeklyFax

WEEKLY SCHEDULE

Lead Time - 34 Days

5 days

1 sec

7.6 days

3 min

1.8 days

15 min

2.7 days

67 min

4.5 days

4 min

2 days

Lead Time=23.6 days

1 shift1 shift

CT= 4 minCo=0

Uptime=100%2 shifts



Orders/day= 36

Queue= 1.5 Days

Touch Time= 89 min

What is the pitch time?

Flow of ValueOTD, Lead TimeWho is setting the pace?

Define


35/37

Measure

Analyze

Improve

Control


Making it happen

Three major roles

Implementer Learns the tools Works the process Solves day to day problems

Manager Learns the methodology Manages a value stream Reviews project teams

Leader Establishes the vision for the future Sets priorities Encourages

Where do youneed to focus?

Define


36/37

Measure

Analyze

Improve

Control


What Is a Sigma?

A metric that indicates how well a process is performing. Higher is better

Measures the capability of the process to perform defect-freework

Also known as z, it is based on standard deviation for

continuous data For discrete data it is calculated from DPMO

Define


37/37

Measure

Analyze

Improve

Control

Units of Measure

The Normal Curve and Capability

LSL USL

Poor ProcessCapability

Very HighProbabilityof Defects

LSL USL

ExcellentProcess

Capability

Very LowProbabilityof Defects

Very HighProbabilityof Defects

Very LowProbabilityof Defects

Low SigmaLow Sigma High SigmaHigh Sigma

Units of MeasureUnits of Measure

Units of Measure

Performance

LimitProbability

of a DefectArea of Yield

#29 LEAN in the Lab 7

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Transcript of #29 LEAN in the Lab 7