6 Sigma Lean

7/29/2019 6 Sigma Lean

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[email protected] Copyright - ISandR Services and Accelper 1

6-Sigma & Lean 101

6-Sigma

Lean

Other ProcessImprovement

Tools

A Lean-SS Overview

Introduction of 6-Sigma Tools

DMAIC process & tools discussion

Introduction of Lean Concepts

Identification of Waste

Workplace Lean Improvements

Sustainability

Business Score Card

A Business Case Example

please contact [email protected] for an animated PowerPoint presentation


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6-Sigma & Lean 101

A Lean-SS overview, not detailed presentation

Introduction of Six-Sigma Tools without stats

DMAIC process & tools associated with each phase

Introduction of Lean Concepts Identification of Waste

Lean Improvements in Gemba (Workplace)

Sustainability

Business Score Card

ISandR Services Presents -


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When you can measure what you are speaking

about, and express it in numbers, you know something about

it; but when you cannot measure it, when you cannot express

it in numbers, your knowledge is of a meager and

unsatisfactorykind.William Thompson (Lord Kelvin), 1824-1907

If you can't describe what you are doing as a

process, you don't know what you're doing.W. Edwards Deming, 1900-1993

6-Sigma & Lean 101Process Improvement Describe & Measure


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6-Sigma & Lean 101The Average and the Standard Deviation are Most Important

1

)(2

nXxS

i

nxX i /)(

These metrics are important, but we will keep this simple

AVERAGE

STANDARDDEVIATION


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6-Sigma & Lean 101Process Improvement The Family Vacation Example

Start with the end in mind THE GOAL Analogy of the family vacation

Would you start with how to pack better?

Where, What, Who - Destination, Activities, You & ? DEFINE Activities, Accommodations, Alt Options, Where is Start

Route - how far/long, transport vehicle MEASURE

Cost of alternatives ANALYZE

What to take - backpacks or suitcase ANALYZE

What can be done better from last time IMPROVE

Stick to budget & plan CONTROL


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6-Sigma & Lean 101What is 6-Sigma? A Short History

Improvement tools known for a LONG time

Popularized by GE, Motorola, et al

Collection of tools with standardize usage!

About BEST in class About dramatic improvement not stats

ASQ 80% of tools are not statistical

Process based on D M A I C

- Define - Measure - Analyze - Improve - Control

Presentation parallels book Stat Free Six Sigma P. Gupta (Accelper)


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6-Sigma & Lean 101What is the Significance of the Words 6-Sigma?

What does 6-Sigma imply?

Process of 3 defective parts per million (3ppm)

Depends on

Customers specified limits (Upper & Lower Bound) Average in the process (Average or Mean)

Variability in the process (Standard Deviation)

Not all processes need to be 6-Sigma Capable

A process that meets customer specifications by providingconsistent accurate results with no variation - near zero defects

Not all processes need to be 6-Sigma Capable


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Process Capability

CpK = [ Closest Limit X ]

3

Closest Limit X

6-Sigma & Lean 101What is 6-Sigma? Statistics Concepts, Without Statistics

Good Mean

Good Variability

Higher sigma is better to avoid quality escapes!

Customerspecifies

LL and UL

LowLimit

HiLimit

Variation = 2

Mean = XExamples

Production

size & location

of hole in a part

Service -

preparation of

tabloid content& distribution,

early vs late

1 sigma ( ) width at height

6

Good Capability

Distribution:Gaussian

RandomNormal

Error

The ProcessCharacterizing The Process


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6-Sigma & Lean 101What Process Capability?

Good MeanGood Variability

Poor MeanGood Variability

Poor MeanPoor Variability

Good Capability Poor Capability Poor Capability

mean

variation

LL HL

This is previous slide


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6-Sigma & Lean 101What Makes 6-Sigma Work?

When everyone understands the Cost of Poor Quality

In / ext failures, inspection, testing, rework (calc $$s)

Align VOC and biz needs for big improvements

S M A R T goals

Specific why, what, when, who, where, finallyhow

Measurable which metrics: how much / many, B4 & after

Attainable have resources: attitudes, abilities, finances

Realistic challenging believable & achievable

Timely* reasonable duration to complete with urgency

Visible with Executive Management Support

Employees encouraged to take risks (Deming, Drive out fear)

* Could be Tangible can experience with senses makes it more realistic and measurable


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The energy to overcome an existing culture, make improvementsand sustain change takes

Organization A

Organization B

6-Sigma & Lean 101What makes 6-Sigma Work? Culture Change Response Curve

Present Time Future

E

ffort/Cost/Resistance

effort, time and money

The paths are different for each organization.

DM

A I

C


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6-Sigma & Lean 101Customer Surveys Voice Of the Customer (VOC)

Research on customer satisfaction: Determine what is quality [Q is what the customer says it is] Find out what competitors are doing [better] Define quality performance measures to identify defects [Pareto] Identify factors to give a competitive edge [SWOT] Identify urgent problems [low hanging fruit 1st with best ROI]

Use multiple instruments to ID customer satisfaction. Theopportunity to collect misleading or useless information is possiblewith just one instrument.

Surveys, Focus Group, Face-to-face, (Dis)satisfaction cards,Competitive Shopping

- to gain information on - Stated Needs, Real Needs, Perceived Needs, Cultural/Unstated

Needs, Unintended Needs (Distinguish: Wants, Needs, Dissatisfiers)


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6-Sigma & Lean 101Customer Surveys - VOC

Feature/Process Satisfaction

FeatureImpor

tance

Customer Response to Survey

LO HI

HI

Maintain Good Work

& Performance

Maintain Current

Status

Over-effort for littlevalue

MUST Improve

Opportunity BeingLost

What was expected and experienced, what was the level of satisfaction and importance


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6-Sigma & Lean 101

How to look for and improve the PROBLEMS


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6-Sigma & Lean 101What is DMAIC?

Define the charter: why do this (ROI / VOC), which process(Pareto), achieve what, measure what (errors, FTT), whichresources, whos involved, how to accomplish (brainstorm /fishbone), what is goal, when complete, whats not included,

Measure specify info sources to measure, precision, frequency

of measurement, instruments used to measure, Analyze examine patterns, correlate dependent & independent

variables (SIPOC / histograms / scatter-plots), root-cause, failureinfluence (FMEA-SOD),

Improve development ofalternatives to reduce cost, variation,& waste or for faster delivery,

Control sustaining gains from project and maintaining processcontrol

Define

Measure

Analyze

Improve

Control


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Phase Tools Brief Description

D Project Priority Index PPI = (Benefit/Cost) X (Probability of Success/Time to complete in years)Time < .5

Estimated Savings/Cost > 2.0Recommended PPI > 4.0

D Pareto A graphical tool to prioritize various defects to identify the most important one

D Process Map A graphical description of activities and decision points

D Kano's Analysis A graphical tool to identify customer critical requirements, including customers' love to have' requirements

D SIPOC An excel lent tabular capture of most of the process constraints

D CTQ Operational critical-to-quality characteristics related to the customer expectation

D Project Charter Project plan with clearly-defined goals and milestones

M Cost of Quality Breakdown of product or service cost related to appraisal, failures and prevention

M DPU A product measurement, which is a ratio of the number of defects observed per unit verified

M Yie ld The percent o f process output wi th no error or defect .

A DPMO A process measurement, which is the DPU normalized to the product or process complexity

A Sigma Level A business measurement, estimated from DPMO, commonly used for benchmarking

A Average Typical performance

I Range Range of performance (maximum minimum)

6-Sigma & Lean 101What are Tools Used with DMAIC?

Define Measure Analyze Improve

Stat Free Six Sigma, Gupta


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6-Sigma & Lean 101Good Charter Components?

Business need - cost reduction, margin increase, governmentcompliance or increased customer satisfaction.

Business advantage ROI? - case should show the businessneed as dollars ($$s) to substantiate which projects selection.

High-level project scope sponsors vision of the project. Critical to success factors ID project, team, deliverables,

schedule, what is needed for project success: scope, schedule,cost, or quality.

Project constraints, risks and assumptions document theseconjectures; revisit during project to see if these remain true.

Authority of the project manager what is the responsibility ofthe project manager, to clarify their role assists with future decisions(controversial?) dealing with the stakeholders and organization.

Signatures demonstrates management importance & supportExample of form to assist in

addressing items to consider

Constitution

Bill of Rights

Plans Change


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Customer's OrderComplaints *

Late 192

Defective 44

Rude CS 37

No call back 23

Wrong Item 72

Incomplete 101

Refund late 17

Wrong Price 15

No Gift Card 3

Missing item 2

Not New - Used 12

Never Received 7

6-Sigma & Lean 101DMAIC Tools PARETO Ranking of Issues

Minitab

ExcelFigure out cost/benefit


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6-Sigma & Lean 101What is SIPOC?

Reference DocsLibrary

MagazinesSuggested Adds &

DeletesEditors

Educators &Trainers

Training

InstructionalInfo

ScholarlyReferences

Researchers

ConsultantsExercisesOriginal Written

ManuscriptAuthors

LibrariesAlbum of Related

workBinders

Web Whit PapersAbstractsElectronic DocsElectronics

Audio booksDVDs & CDsFigs & PhotosGraphics

BookclubsCliffnotesPaper

CustomersOutputsProcessInputsSuppliers

Reference DocsLibrary

MagazinesSuggested Adds &

DeletesEditors

Educators &Trainers

Training

InstructionalInfo

ScholarlyReferences

Researchers

ConsultantsExercisesOriginal Written

ManuscriptAuthors

LibrariesAlbum of Related

workBinders

Web Whit PapersAbstractsElectronic DocsElectronics

Audio booksDVDs & CDsFigs & PhotosGraphics

BookclubsCliffnotesPaper

CustomersOutputsProcessInputsSuppliers

Shipmentof Orders>

Process

Distributor Orders

>

First

PrintingPromotion

>

Publisher

Approval& PrintingSchedule

>

Editor

checkscontent

>

Graphicssubmits

figuresand

photos

>

Authors

submitcontent

Process for Publishing and Distribution of Scholarly Research and Textbook Materials

Shipmentof Orders>

Process

Distributor Orders

>

First

PrintingPromotion

>

Publisher

Approval& PrintingSchedule

>

Editor

checkscontent

>

Graphicssubmits

figuresand

photos

>

Authors

submitcontent

Process for Publishing and Distribution of Scholarly Research and Textbook Materials

Look forrelationships so Input improves stability in Output

Suppliers individuals providingresources

Inputs info, materials &Services

Process value addedtransformation steps

Outputs final product or service

Customers entity finding valuein output


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The cost of quality isnt the price of creating a quality product orservice. Its the cost of NOT creating a quality productor service.

Prevention Costs - New product review, Quality planning, Supplier capabilitysurveys, Process capability evaluations, Quality improvement team meetings, Qualityimprovement projects, Quality education and training, Appraisal Costs

Inspection Costs - measuring, evaluating or auditing products or services toassure conformance to quality standards and performance requirements; Incomingand source inspection/test of purchased material; In-process and final inspection/test;Product, process or service audits; Calibration of measuring and test equipment;

Associated supplies and materials; Failure Costs

Internal Failure Costs - Failure costs occurring prior to delivery or shipment of theproduct, or the furnishing of a service, to the customer. Scrap, Rework, Re-inspection, Re-testing, Material review, Downgrading

External Failure Costs - Failure costs occurring after delivery or shipment of theproduct -- and during or after furnishing of a service -- to the customer. Processingcustomer complaints, Customer returns, Warranty claims, Product recalls

6-Sigma & Lean 101Cost of Quality

Prevention Costs

Inspection Costs

Internal Failure Costs

External Failure Costs


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This is a way of analyzing problem and get to the root cause

The effect is usually negative - a problem

The problem should be specific and clearly stated

The ideas are generated by using brainstorming (vocal or silent)

Keep the group to asking themselves what would cause the problem?

Keep attention on the effect of the problem not criticism or how to fix

The goal is to find as many sources for variation as possible that cause theproblem

6-Sigma & Lean 101Brainstorming Fishbone / Cause-Effect / Ishikawa

Measurements

Methods

PM vs AM

Temp

Shift

PreparationSeasonStorage

Effect

Machine Man

Mother Nature Materials

RMAs


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Cause of FailureControl for Failure

Potential Failure

Effect of Failure

Risk AssessmentProbability ofOccurrenceSeverityAbility to Detect

Risk Priority NumberCorrective Actions & Re-evaluation

Part Number & Function

6-Sigma & Lean 101FMEA Failure Mode Effects Analysis

Determine what can go wrong, the severity, and how to avoid it

QCI Indiana Quality Council

FMEA Number: This should be a log controlled number for tracking thedocument

The part number, name, or other description

The design responsibility: Which department or group is responsible forthis design?

The person responsible for FMEA preparationThe date the FMEA was prepared and any necessary revision level

The subsystem or component part number getting detailed analysis

The component functionThe potential failure mode

The potential effect of failureThe potential cause of failure

What are the current controls in place to prevent the cause from

occurring?O is the probability this failure mode will occur. This index is from 1 to 10

with 1 being virtually no chance and 10 being near certainty ofoccurrence.

S is the severity of the effect of the failure on the rest of the system if the

failure occurs. Values are from 1 to 10. A value of 1 means the userwill be unlikely to notice with a 10 meaning that the safety of the

user is in jeopardy.D is a measure of the effectiveness of the current controls to identify the

potential weakness or failure prior to release to production. This

index ranges from 1 to 10. A value of 1 means this will certainly becaught whereas a value of 10 indicates the design weakness

would most certainly make it to final production without detection.RPN The Risk Priority Number is the product of the indices from the

previous three columns. RPN = OSD

The actions then are based upon what items either have the highest RPNand/or where the major safety issues are.

There is a column for actions to be taken to reduce the risk, a column forthe responsibility and finally a column for the revised RPN once

corrective action is implemented.

FMECA provides a disciplined approach for the engineering team toevaluate designs to ensure that all the possible failure modes have

been taken into consideration.


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6-Sigma & Lean 101Average, Standard Deviation, Max Value, Min Value in Data Sets

Active Cell

AverageStandardDeviation

Maximum Minimum


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6-Sigma & Lean 101Evaluating Data

Quantify what you want to improve and make decisions based on the data.


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6-Sigma & Lean 101Comparative Tests - Improving Means & Variance - Visualization

Data

sample6sample5sample4sample3sample2sample1

2.0

1.8

1.6

1.4

1.2

1.0

6 Samples - Comparison of Means andV ariation

Data

sample6sample5sample4sample3sample2sample1

2.0

1.8

1.6

1.4

1.2

1.0

1.45738

1.52912

1.68022

1.78123

1.47119 1.47366

6 Samples - Comparisonof Meansand Variation

Same Mean

Same Vari(1)

Same Mean

Same VariDiff Mean

Same Vari(2)

Diff Mean

Same Vari

Same Mean

Diff Vari(3)

Same Mean

Diff Vari

Use Methods to Visualize the Data to Make decisions Easier

Data RangeMeanMiddle 50% of Data

T-test for determining significant difference in Means

F-test for determining significant difference in Variance


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6-Sigma & Lean 101Yield - Efficiency of the Process

100*r

Pr%

ducedUnits

nitsDefectiveUoducedUnitsYield

%8.94100*00

26500% Yield

%Yield

ducedUnits

tsObservedTotalDefecDPUUnitDefectsPer

r

106.00

53DPU

DPU

Defect per Million Opportunities (DPMO) - the number of ways a defect can occur.If each item could have 8 ways to fail (label, scratch, color, wrong info, performance, ) then

250,138

000,106

8

000,000,1*106.0

#

000,000,1*

iveanBeDefectofWayUnitC

DPUDPMO

Rolled Throughput Yield (RTY)

Yield

Process1

= .9

Yield

Process 2 = .9

Yield

Process 3 = .9

Yield

Process4

= .9(.90)x(.90)x(.90)x(.90)= .656

65.6%

Y1 x

Y1=0.90

Y2 x

Y2=0.90

Y3 x

Y3=0.90

Y4

Y4=0.90 Guess

These are formulas

with examples from

this table. Pleaselook at these offline.

most familiar for defect eval

What is overall yield in chain of processes?


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6-Sigma & Lean 101Scatter Plot Visualize Process Data & Look for Trends

0

5

10

15

20

25

0 5 10 15 20 25

Independent Variable X

DependentVaria

bleY

Y has equivalent response to X andsimilar variation along response curve

Y has varying response to X and

different variation along response curve

What is different

about processes?

y=f(x)

x

y


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6-Sigma & Lean 101Control/Run Chart - Variable & Attribute - Track/React to Trends

UCL (3)

LCL (3)

Average & Range SPC Chart

17

19

21

23

25

27

29

31

Average

0

2

4

6

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

R

ange

UCL

You would look into why

these extremes happened

Attribute

Fraction Defective

Number Defective

Number of Defects

Percent Defective

Variable

Median & Range

Average & Range

Average & Std Deviation

Short Run Charts

Continuous

Discrete

Diameter of Hole

P.O. with Errors


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6-Sigma & Lean 101Objectives of Design of Experiments (DOE)

DOE is a systematic approach to determine & optimize the responsebetween process inputs & outputs (independent and dependent variables).

S & H and Delivery TimePart Size

The objective - optimize S&H of different part sizes for best delivery time.

DOE experiments do not change only one variable - variables can interact

Consider the interactionoftemperature and wind velocity in the wind chillfactor; more wind makes it feel colderand an engine requires the rightamount of both gasoline and air to get the maximum performance.

The experiment that changes variables one-at-a-time (OAAT) requires moreexperiments and cannot evaluate interactions; it is inefficient at best.

PROCESS


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86

88

90

92

94

96

P1 P2 T1 T2

6-Sigma & Lean 101Two Factor DOE Variable Influence

Plot the response.

RESULT

P T Yield

P1 T 1 Y1P1 T 2 Y2

P2 T 1 Y3

P2 T 2 Y4

INPUT

RESULT

P T Yield

50 25 94

50 75 92

100 25 96

100 75 88

INPUT

If you want to know the affects from two factors(i.e. temperature and pressure), then vary both Tand P then record the results of the dependentvariable (i.e. yield).

Dont just change one factor at a time.

Introduce terms, select levels, run experiment.

Change the pressure between 50 and 100 psi and

the temperature between 25 and 75 degrees F;record the yield results.

Calculate the meanyield for each factor level

This experiment is with 2 levels of P & T with a yieldresult

It could be Internal vs External S&H with big vs small parts and delivery time result

Y@P1 = 93 Y@P2 = 92 Y@T1 = 95 Y@T2 = 90

From the main effects pressure has lowerinfluence on the yield, while temperature has alarger effect on the yield (more slope, more effect).


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6-Sigma & Lean 101Two Factor DOE Hi vs Lo Importance

OK. Some of you are saying Wait a second!When P is changing so is T!? WHAT???????

EXAMPLE - Calculate the effect of P change.

Yield at P1 = (Result Y1) + (Result Y2)Yield at P2 = (Result Y3) + (Result Y4)

Yield at P1 = (P1 + T1) + (P1 + T2)Yield at P2 = (P2 + T1) + (P2 + T2)

Yield at P1 = (P1 + P1 ) + (T1 + T2)Yield at P2 = (P2 + P2 ) + (T2 + T2)

Yield at P1 = 2P1 + (T1 + T2)Yield at P2 = 2P2 + (T1 + T2)

or consider, the difference removes T effect(Yield at P1) - (Yield at P2) = 2P1 - 2P2

RESULT

P T Yield

P1 T1 Y1P1 T2 Y2

P2 T1 Y3

P2 T2 Y4

INPUT

RESULT

P T Yield

50 25 94

50 75 92

100 25 96

100 75 88

INPUT

REARRANGING & REASSOCIATING

SIMPLIFYING

GRAPHICAL DEPICTION

SUBSTITUTING VARIABLES PRODUCING THOSE YIELDS

This is what is important!!!!T1 & T2 contribute the

same amount to P1 or P2

Y@P1 Y@P2T1+T2 T1+T2

2P12P2


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6-Sigma & Lean 101More Factorial Experiment Designs 3 & 4 Variables

INPUT OUTPUT INPUT OUTPUT

A B C D Result1 Result2 A B C Result1 Result2

A1 B1 C1 D1 R1 R2 A1 B1 C1 R1 R2

A1 B1 C1 D2 R1 R2 A1 B1 C2 R1 R2

A1 B1 C2 D1 R1 R2 A1 B2 C1 R1 R2

A1 B1 C2 D2 R1 R2 A1 B2 C2 R1 R2

A1 B2 C1 D1 R1 R2 A2 B1 C1 R1 R2

A1 B2 C1 D2 R1 R2 A2 B1 C2 R1 R2

A1 B2 C2 D1 R1 R2 A2 B2 C1 R1 R2

A1 B2 C2 D2 R1 R2 A2 B2 C2 R1 R2

A2 B1 C1 D1 R1 R2

A2 B1 C1 D2 R1 R2

A2 B1 C2 D1 R1 R2

A2 B1 C2 D2 R1 R2

A2 B2 C1 D1 R1 R2

A2 B2 C1 D2 R1 R2

A2 B2 C2 D1 R1 R2

A2 B2 C2 D2 R1 R2

Exercise for later

these are balanced experiments equal number of each variable (A1,

A2, B1, B2, C1, C2), within all

experiments that are also unique withrespect to the arrangement of these

variables note: check out the colors.


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6-Sigma & Lean 101Lean

Document the process

Find the waste

Make a plan toeliminate the waste


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6-Sigma & Lean 101What Are Key Concepts of Lean?

Get the big picture of the process to Improve Quality Eliminate Waste - ID Value Added vs. Non-Value Added Activities

Reduce Lead Time Reduce Total Costs

Give customers what they want, when they want it, for what they want to pay, and withoutmore inve$tment by your company


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6-Sigma & Lean 101Create a Value Stream Map Present (Need Future State)

item Description

1 ID Customer, Supplier, and Production

2 Customer Requirements per Time Interval

3 Production & Containment Requirements

4 Shipping

5 Delivery

6 Sequence of Processes

7 Data specific to each Sequence

8 Communication Methods

9 Process Attributes: times, Efficiency

10 Operator Symbol - number

11 Inventory & Work in Process (WIP)

12 "Push" vs "Pull" Operations

13 Other Info

14 Working Hours Availability

15 Cycle & Lead TimesExample from - www.strategosinc.com

You will probably do this with pencil & paper

4

3

2

1 1

1

5

6

7

8

11

1210

14

14

15

15

9

This is the value streamprocess for the entire

plant. You can also

make a value streammap for a sub-process.

Eventually you need tolook at the entire

process to make sure

changes did not shiftwaste or problems to

another process andonly created a local

optimum.


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6-Sigma & Lean 101How to Identify Waste TIMWOOD or DOWNTIME

TIMWOOD Transportation

Inventory

Motion

Waiting Over-processing

Over-production Defects

DOWNTIME Defects Over-production

Waiting

Not Utilizing Employees* Transportation Inventory

Motion

Excessprocessing

*skills, ideas, creativity

Look for these forms of waste in the Value Stream Map


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6-Sigma & Lean 101How does 5S Help Eliminate Waste? Makes Waste Visible.

5 S - seiri, seiton, seiso, seiketsuand shitsuke

Sort, separate needed from unneeded items & remove the latter

Set-in-Order*/Straighten, arrange items for ease of use

Shine/Scrub, means to cleanup Standardize/Systemize, disciplined structured routines

Sustain/Self-Discipline, create a new habit

* 6 S adds Safety (part of Set-in-Order) make safety equipment easy to use


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6-Sigma & Lean 101Relation of What We Learned wrt Process Improvement

6-Sigma

Lean

Other PI Tools

There is more


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6-Sigma & Lean 101How to Sustain Progress with Lean & 6-Sigma

Keep employees motivated,customers happy,

processes running smoothly, and

the company making money

LEAN is NOT


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BusinessScorecard

Management Provides Vision & Strategy so the Business Can: #1 Take Care ofCustomers (VOC), #2 Take Care ofEmployees (Training, Resources, Rewards)

Employees Take Care ofProcesses (Process Control & Improvement) Processes Take Care ofFinances (Efficient Value Added Processes = $$s) Finances Take Care of Stakeholders and Provide $$s for Growth and

Improvements that add value for the customer

6-Sigma & Lean 101What are Components of Sustained Profitable Growth

Customer

Employees

Processes

Financials Vision & Strategy


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But Some Measurements Tend to Matter More than Others

Sturdy averages seem impressive from inside the

organization (the inside-out perspective)

But it is variability that the customer feels and fears (the outside-in perspective)

6-Sigma & Lean 101Six Sigma: Objective Quality Measures All Matter


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Challenges with Six Sigma for TransactionalFunctions like Purchasing/Procurement, SRM

Projects tend to lack objective data. What data there istends to be attribute (pass fail/ no. of shortcomings) andcategorical Solution: work with continuous data when possible to mimic

previously shown production charts. There are more options forstat. tool use; yield more guidance information. ROThumb:consider converting if at least 10 different values occur and nomore than 20% of the data set are repeat values

You may have a defined process and goal, but no tangible

spec limits. Arbitrary metric or soft target setting canmislead, distort. Example: 1-5 supplier rating.

6-Sigma & Lean 101

*SRM = Supplier Relationship Mgmt


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Challenges with Six Sigma for TransactionalFunctions like Purchasing/Procurement, SRM

-Data integrity problems of attribute data. MSA may beneeded

-Meaningful metrics may take more doing and trial and errorearly on

-Regression, DOE and ANOVA can be applied to multi-variable situations with lots of moving and interacting partsDCs, office locations, site specific paperwork procedures,carrier selection, suppliers with different lead time averagesand extremes, etc.

6-Sigma & Lean 101


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6-Sigma & Lean 101Pareto Diagram: Example

Days Delayed

PO Cycle Time - Unapproved Vendors

COUNT

PERCENT

Total Count = 895

0

90

180

270

360

450

540

630

720

810

900

0

10

20

30

40

50

60

70

80

90

100

Raw Material

324

(36%)

Equipment

255

(65%)

Engr. Matl.

135

(80%)

OTHER

92

(90%)

Admin

89


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Cause and Effect Diagram

Methods

Man

Measurement

Materials

Disorganized

Untrained

Too few

No step by step documentation

No established methods

Improper use of e-mail

Always running out of materials

Materials outdated

Proper materials never ordered

System errors in reporting

Wait time not comprehensive

6-Sigma & Lean 101Poor Customer Response Time

Poor CustomerResponse Time


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0

10

20

30

40

50

60

70

Suppl 1 Bids Suppl 2 Bids Suppl 3 Bids Suppl 4 Bids Suppl 5 Bids

Hi for Mo

Q3 for Mo

Q1 for MoLo for Mo

Similar Items Over Course of 1 Month (These patterns may be congruentwith other Supplier Behaviors such as RFQ Cycle Times, etc.)

6-Sigma & Lean 101Box Plots of Supplier Bids


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New/ECO

Product

Devlpt

Customer

Issue

Resolution

Waste, Rework

Unused Inv.

Supplier

Supplier

IssueResolution

Sales

Personnel

In House

Plant

Customer

Service DeptMarketing

Conveyance,

FreightCarrier

Customer

!!

6-Sigma & Lean 101Supply Chain Basic Flow Chart for Component Assembly Value Stream


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Days

6-Sigma & Lean 101Variation in RFQ Cycle Times for Critical Part


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Province of

Lean Sigma Manufacturing

Ed

Start

End

Collect Information

From Customer

3 hours

1 day

Collect Cost Info

From Outsourced Mfg

0.25 hours

5 days

Generate Quote

0.5 hours

2 hours

Negotiate

Price

1 day

3 days

Enter Order

0.25 hours

1 day

Assemble &

Delivery

1 week

10 weeks

Province of

Lean Sigma SRM

6-Sigma & Lean 101Component RFQ Process Time-Value Diagram


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Component

Company

Outsourced

Supplier

Support

Office

Outsourced

Supplier

Start SubmitCompile,

Send RFQ

Send to

Support

Office

Process

request

Return to

Own Plant

Compile

Information

Assemble

Quote

6-Sigma & Lean 101As Is Process Lane Map For Component RFQ


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SESStComponent

Company

Outsourced

Supplier

Start SendCompile

Request

Apply

Costing

Table

Assemble

Quote

Maintain

Costing

Tables

6-Sigma & Lean 101Future State Process Map For Component RFQ


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AFTER CHANGES

Process Shift, New Avg, New CLs

6-Sigma & Lean 101Variation in RFQ Cycle Times for Key Part


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Before

Changes

AfterChanges

Cycle Time, Days

6-Sigma & Lean 101Supplier Quote Time, Before and After Change


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ISandR@usa com Copyright - ISandR Services and Accelper 6161

New Quote Time, Days

6-Sigma & Lean 101Normal Probability Plot for RFQ Time

6 Sigma Lean

Documents

Transcript of 6 Sigma Lean