Asq int lss
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Transcript of Asq int lss
Integrating Lean & Six Sigma
Using Value Stream Mapping and Linked Scorecards to Achieve Breakthrough Improvements in
Quality, Productivity and Competitive Position
Ron Mitchell ASQ, Hamilton, Ontario – 3/10/04
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Ron MitchellRon Mitchell is Director of Lean & Six Sigma Services at Omnex. He is a trainer and consultant with twenty years experience-helping clients understand and apply Lean Manufacturing and Quality Improvement Technologies. Ron studied the Toyota Production System at NUMMI, the joint General Motors and Toyota Motors Corporation facility in Fremont, California; and, he was part of the team that helped launch Synchronous Manufacturing at General Motors. Ron received his training in Quality Management from Dr. W.E. Deming, Dorian Shainin and through The Crosby Quality College. Ron is a Lean Manufacturing Master Black Belt and a Six Sigma Master Black Belt. Ron holds Bachelor’s and Master’s Degrees in Industrial and Organizational Psychology and a PhD – Abd in Behavioral Systems Analysis.
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Integration & Alignment
Lean
Six Sigma
ISO/TS 16949
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New Technology
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Cost of Poor Quality and Sigma
COPQ Sigma PPM Position
20-25% of Sales 2.0 308,537 Non Competitive
15-20% of Sales 3.0 66,807 Average Company
10-15% of Sales 4.0 6,210
5-10% of Sales 5.0 233
<5% of Sales 6.0 3.4 World Class
COPQ Sigma PPM Position
20-25% of Sales 2.0 308,537 Non Competitive
15-20% of Sales 3.0 66,807 Average Company
10-15% of Sales 4.0 6,210
5-10% of Sales 5.0 233
<5% of Sales 6.0 3.4 World Class
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Quality engineeringand administration
Inspection/test (materials,equipment, labor)
Expediting
Scrap
Rework
Rejects Warrantyclaims
Maintenance and service
Cost to customers
Excess inventory
Additionallabor hours
Longer cycle times
Quality auditsVendor control
Improvement program costs
Process control
Opportunity cost if salesgreater than plant
capacity
Cost of Poor Quality (COPQ)
“What about the greatest cost of all… the cost of a lost customer?” Dr. W.E. Deming
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Cost Savings from Six Sigma
• General Electric reported that Six Sigma produced in excess of $2 Billion in savings in 1999 alone.
• Motorola used Six Sigma to win the first
Malcolm Baldrige National Quality Award and reported cumulative savings in excess of $14 Billion in the first ten years.
• Ford Motor Company reported that Six Sigma projects saved over $385 Million in 2002.
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The Lean Enterprise*
• Lean companies use less of everything than do mass production companies:
half the human effort in the factory,half the manufacturing space,half the investment in tools, half the engineering hours to develop a
new product in half the time, less than half the inventory
*From Womack, Jones, et.al., “The Machine that Changed the World.”
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Extra Handling & Storage Costs
Expediting Costs
PremiumFreight
Charges
Late Deliveries
Long Leadtimes
Cost to Customer
Excess Inventory
Excess Scrap & Rework
Cost of Capital
Lost Customer Loyalty
Excess Labor Costs
Opportunity Costs WhenPotential Sales Greater
Than Current Capacity
Cost of Poor Flow (COPF)
Excess Capital Investments
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Cost of Poor Flow and Inventory Turns
COPF Inventory Turns Competitive Position
20-25% of Sales 8 to 10 Non-Competitive
15-20% of Sales 10 to 20 Average Company
10-15% of Sales 20 to 50
5-10% of Sales 50 to 100
<5% of Sales 100 Plus World Class Company
COPF Inventory Turns Competitive Position
20-25% of Sales 8 to 10 Non-Competitive
15-20% of Sales 10 to 20 Average Company
10-15% of Sales 20 to 50
5-10% of Sales 50 to 100
<5% of Sales 100 Plus World Class Company
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World Class Processes
• C – Combine
• L – Lean
• A – And
• S – Six
• S – Sigma
Lean Productivity with Six Sigma Quality equals WORLD CLASS Performance.
Better, Faster and Cheaper!
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Toyota Production System
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Toyota Today
• FY 2003 profit report - $12 Billion in pre-tax operating profits.• More than the Ford, GM & Daimler/Chrysler...
combined.• Toyota has 11% share of the global market
compared with over 60% for The Detroit 3. • Toyota’s current market capitalization is $100
billion…. more than the market caps of the Detroit 3 combined.
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Show Me the Money!!!
Cost of Poor Flow Cost of Poor Quality
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Why SO LITTLE Progress?
1. Lack of Commitment/Support From:a. Management b. Supervisionc. Workforced. Unione. Suppliersf. Customers
2. Lack of Direction / Focus.3. Lack of Resources:
a) Timeb) Budgetsc) Skill
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Managing Change - the Key to Success
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Change Management
• As Competition Changes:– Technology Must Adapt – Manage the Technology– Organization’s Must Adapt – Manage the Culture– Groups/Teams Must Adapt – Manage the Group Dynamics– Individuals Must Adapt – Manage the Psychology
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21st Century Management
1. Plan - identify and prioritize improvement projects;
2. Organize – provide the resources to drive improvement;
3. Motivate - manage the change process.
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Balanced Scorecards
• Performance measures must address the concerns of ALL STAKEHOLDERS.– You don’t want to optimize one measure at the
expense of the others.
•Price•Quality•Delivery•Technology•Service•Profit Margins•Customer Satisfaction•Employee Satisfaction
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Profits
Products
Process
Projects
People
Scorecard
Scorecard
Scorecard
Scorecard
Scorecard
Linked Scorecards Planning for Improvement
Planning
Improving
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Profits
Products
Process
Projects
People
Scorecard
Scorecard
Scorecard
Scorecard
Scorecard
Customer Research - Surveys
Value Stream Maps
Continuous Flow Supermarket PullSix Sigma Quality SMED/TPM/FIVE S
StandardsEducationTrainingResourcesFeedback
Planning for Process Improvement
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Profits
Products
Process
Projects
People
Scorecard
Scorecard
Scorecard
Scorecard
Scorecard
Achieving Process Improvement
New Knowledge, Skill, Attitudes and Behaviors
Improved Methods & Technology
Lean Productivity & Six Sigma Quality(Better, Faster, Cheaper)
Customer Satisfaction Increased Sales Increased Margins
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Study the Process - Value Stream Mapping
1. To design and communicate the Lean / Six Sigma Vision – the future state.
2. To identify and quantify the process improvement opportunities – the gaps between the current state and the future state.
3. To develop project plans for achieving the future state.
4. To evaluate progress towards the future state.
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PRODUCTIONCONTROL
MRPWeekly PO fax
90/60/30 DayForecast
90/60/30 DayForecasts
Weekly Order
8400 pcs/mo
Skid = 40 pieces
Distributors& Installers
Weekly
Weekly
ISheets4000
I3000
I1000
I800
I2200
I4800
FS = 600 SQ FS = 800 SQ FS = 300 SQ FS = 4000 SQ
9.5 days 7 days 2.4 days 1.9 days 5.2 days 11.4 days
25 seconds 60 seconds 35 seconds 20 seconds 40 seconds
Lead Time = 37.4 DAYS
Value Added Time = 180 sec
Weekly ShipSchedule
Weekly Schedule2500 Sheets
Michigan Steel Co.
C/T=25 sec.
C/O= 90 sec.
U/T = 95%
QR = 99%
SHEAR PUNCH
C/T=60 sec.
C/O= 0
U/T = 95%
QR = 98%
FORM
C/T=35 sec.
C/O=40 min.
U/T = 90%
QR = 95%
1
C/T = 20
C/O=0
U/T = 99%
10
C/T=40 sec.
C/O=0
U/T = 95%
SHIPPING
Staging 1
FS = 600 SQ
S. WELD
QR = 98% QR = 97%
PAINT/BOX
1 1
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Process Scorecard
• Process Scorecards provide baseline measures for monitoring and evaluating progress:
• Lean / Six Sigma Process Scorecard Measures:Rolled Throughput Yield (RTY)Process Leadtime (Dock-to-Dock) Process Efficiency (% Value Added) Inventory Days (Raw, WIP & FG Days)Floor Space Used (Square Feet / Square Meters)Direct Labor Productivity (Sales / # of Operators)Process Availability (Process Uptime - %)
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Measure Current State Future State Improvement
Raw Inventory Days
WIP Inventory Days
F.G. Inventory Days
Process Leadtime
Process Efficiency
Rolled Throughput Yield
Floor Space
Labor Productivity
Process Scorecard for: DSM Cabinet Body Mfg.
9. 5 Days
16. 5 Days
11. 4 Days37. 4 Days
88%
2300 SQ Ft. *
105 / OP. *
. 02%
* Mfg. Only – excludes paint and assembly operation.
Availability 90%
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PRODUCTIONCONTROL
MRPDaily PO fax
90/60/30 DayForecast
90/60/30 DayForecasts
Daily Order
8400 pcs/mo
Skid = 40 pieces
Distributors& Installers
Daily
Daily Ship Schedule
500 Sheets
Michigan Steel Co.
SHIPPING
Staging
1 Day 2 Days
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PAINT/BOX
4040
Body Cell
2 Days
Daily
100
C/T = 59 sec.
C/O = 90 sec.
Uptime = 99%
FTQ = 99.9%
FS = 875
1
FS = 4000 SQ
C/T=40 sec.
C/O=0
U/T = 95%
FTQ = 99.9% Future State MapDSM Cabinet Body CellOctober 7, 2003
TT = 60 sec.
U/T Cell Pull
SupplierDevelop
FTQFTQ
C/O
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Measure Current State Future State Est. Savings
Raw Inventory Days
WIP Inventory Days
F.G. Inventory Days
Process Leadtime
Process Efficiency
Rolled Throughput Yield
Floor Space
Labor Productivity
Availability
Process Scorecard for: ____________________DSM Cabinet Body Mfg.
9. 5 Days 2 Days
16. 5 Days 1 Day
11. 4 Days 2 Days37. 4 Days 5 Days
88% 99.9%
2300 SQ Ft. * 875 SQ Ft. *
105 / OP. * 420 / OP. *
90% 99.9%
. 02% . 07%
* Mfg. only – excludes paint and assembly operation.
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Measure Current State Future State Savings
Raw Inventory Days
WIP Inventory Days
F.G. Inventory Days
Process Leadtime
Process Efficiency
Rolled Throughput Yield
Floor Space
Labor Productivity
Availability
TOTAL SAVINGS
Process Scorecard for: ____________________DSM Cabinet Body Mfg.
9. 5 Days 2 Days $147,100*
16. 5 Days 1 Day $313,404*
11. 4 Days 2 Days $185,484* 37. 4 Days 5 Days
88% 99.9% $2,387,045
2300 SQ Ft2 875 SQ Ft2 $28,500
105 / OP. 420 / OP. $270,000
90% 99.9% $1,034,208 $4,365,741
. 02% . 07%
*Fixed cost savings from reduced inventory carrying costs… $3.2 Million in capital savings.
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AccountingHumanResources
OperationsPurchasing Sales
Strategic Measures – Voice of the Customer/Stakeholder
Process Variation
Process MeasuresVoice of the Process
Leadership TeamObjectives
Organizing for Breakthrough Improvement
Projects
Lean Six Sigma Improvement Organization
Lean Six Sigma Sensei
LSS Project Team
LSS Project Team
LSS Project Team
Lean Six Sigma Project Manager
LSS Project Team
LSS Project Team
LSS Project Team
Lean Six Sigma Project Manager
LSS Project Team
LSS Project Team
LSS Project Team
Lean Six Sigma Project Manager
Lean Champion
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Lean / Six Sigma Improvement Organization
L e a n S ix S ig m a M as te r B la ck B e lt
L S S P ro je ct T e am
L S S P ro je ct T e am
L S S P ro je ct T e am
L e a n S ix S ig m a B la ck B e lt
L S S P ro je ct T e am
L S S P ro je ct T e am
L S S P ro je ct T e am
L e a n S ix S ig m a B la ck B e lt
L S S P ro je ct T e am
L S S P ro je ct T e am
L S S P ro je ct T e am
L e a n S ix S ig m a B la ck B e lt
L e a n S ix S ig m a C h a m p ion
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Managing Change - Motivating
• Set High Expectations• Communicate, Communicate, Communicate• Remove the Roadblocks• Accept Failure, Recognize Success• The ONLY CONSTANT is Change
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Lean / Six Sigma Management Planning
Value Stream Maps
Lean / Six Sigma Project/Change Management
OEE & Quick Pull Continuous T.P.M & Six Sigma 5 S and Changeovers Scheduling Flow (Cells) Error Proofing Quality Process Visual Mgmt.
Design Develop Purchase Produce Assemble Inspect Deliver
Lean Six Sigma Projects
Begin Here
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Questions & Answers