Process Transformation: The Lean Sigma Culture By Dr. Satnam Singh - - PowerPoint PPT Presentation

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Process Transformation: The Lean Sigma Culture By Dr. Satnam Singh Master Black Belt

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REVENUE VS. PRODUCTIVITY

By working Smarter and more effectively by reducing unnecessary wastes within a business we can make direct savings to the bottom line

Business Costs Business Costs Profit Profit Maximise Profits Reduce Business Costs £ Sales Cost

Change of Mind Set

• Cost Plus Method
• Cost to Make + Profit = Selling Price
• None Cost Method
• Selling Price – Cost to Make = Profit
• The Focus should be on reducing cost
• The best way to reduce cost is to remove the waste

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WHY LEAN SIGMA?

The changing world of the Industry

BEFORE

• Rapidly expanding markets.
• Consumer orientated

towards quantity not quality.

• Abundant low cost

resources.

• Management concerned

with increased sales not decreased cost.

NOW

• Increased competition in

saturated or shrinking markets

• Consumer values more

exacting quality requirements and on time delivery.

• Sharp rise in material/labour

cost

• Over capacity of production

facilities

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WHY LEAN SIGMA?

• Global Market

– World-wide competition, continuously improving.

• Success through People

– Involves everybody. – Begins at the front line.

• Focuses on the process

– Improves Quality, Delivery, and Cost performance.

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CHANGE OF MINDSET – PEOPLE ISSUES

I am an authority figure in the company. I got this position because I solve problems. My staff seem unable to solve problems I am a subordinate. I cannot solve problems. But my boss can.

The Dependency Loop

Am I helping?

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LEAN VS. SIX SIGMA What is Lean ?

“The focus is on reducing Non Value Added (NVA) waste”. Waste is anything that impedes the flow of the product/service as it is being transformed in the value chain.’’

• J. Liker, Becoming Lean.
• Focus on quality and consistency
• Is variation good for you?
• Reduces Variation – Can we eliminate variation?
• Use of Statistical Tools to solve problems
• Combined with Lean – improves speed (Lean Six Sigma)

What is Six Sigma ?

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LEAN SEGMENTATION

The Three Divisions of Work.

Value Added : Any process that changes the nature, shape or characteristics of the product, in line with customer requirements e.g. pressing, welding,

• assembly. (Maximise)

Waste : All other meaningless, non essential activities. i.e. 7W Categories (Eliminate) Essential Non Value Added : Any work carried out, which is necessary under current conditions, but does not increase product value. e.g. inspection, part movement tool changing, maintenance (Minimise)

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AVOID ISOLATED ISLANDS OF WORK

Source : Toyota Production System – T. Ohno

Waste Work

Tip : Set up the work area so that one person can perform every operation!

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WASTE VS. WORK

« Waste » Work

Source : Toyota Production System – T. Ohno

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LEAN FOUNDATIONS

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LEAN WASTES

Ohno’s Seven Wastes

 Overproduction  Waiting / Queues  Transportation  Inventory  Motion  Over-processing  Defects / Scrap

 Other resources such as energy, water, and air are

• ften wasted

 Efficient, sustainable production minimizes inputs, reduces waste  Traditional “housekeeping” has been expanded to the 5S

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FORCES OF CHANGE

The Organization

Accelerating Technology

New Strategic Direction

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Six Sigma Definition

spec 1/2 +6σ

• 6σ -3σ

+3σ

Statistical Measurement

Understanding of current position and direction

Six Sigma

Innovation Tool

Customer satisfaction through quality improvement

Philosophy

Change of way of thinking/ way of doing business

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The Inspection Exercise

The Inspection Exercise

Count the number of times the 6th letter

• f the alphabet appears in the following text:

The necessity of training farm hands for the first class farms in the fatherly handling of farm live stock is foremost in the eyes of the farm owners. Since the forefathers of the farm owners trained the farm hands for first class farms in the fatherly handling of farm live stock, the farm owners felt they should carry on with the family tradition of training farm hands of the first class farmers in the fatherly handling of farm live stock because they believe it is the basis of good fundamental farm management.

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The Inspection Exercise

The Inspection Exercise

Count the number of times the 6th letter

• f the alphabet appears in the following text:

The necessity of training farm hands for the first class farms in the fatherly handling of farm live stock is foremost in the eyes of the farm owners. Since the forefathers of the farm owners trained the farm hands for first class farms in the fatherly handling of farm live stock, the farm owners felt they should carry on with the family tradition of training farm hands of the first class farmers in the fatherly handling of farm live stock because they believe it is the basis of good fundamental farm management.

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Dissecting Distribution Curve

Dissecting Process Capability

LSL USL Defects Process Capability Inadequate Design Margin Inadequate Process Capability Supplied Material Variation Inadequate Measurement Capability

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Comparison of Sigma and PPM

(Calculation of PPM is based on the assumption that process mean shifts by ± 1.5 σ )

Target

Lower spec Limit Upper spec Limit

3

σ

2 σ 1

σ

Sigma Level PPM Defect (%) Yield (%)

1σ

697,700 69.77 30.23

2σ

308,733 30.87 69.13

3σ

66,803 6.67 93.33

4σ

6,200 0.62 99.38

5σ

233 0.02 99.98

6σ

3.4 0.0003 99.9997

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Process Sigma Parts Per Million Yield % Services Manufacturing 0 933000 6.7 Poor 1 691000 30.9 Average 2 309000 69.1 Good Poor 3 66800 93.32 Excellent Average 4 6210 99.379 World Class Good 5 233 99.9767 Excellent 6 3.4 99.99966 World Class The difference between service and manufacturing industries are not exact. The one to two sigma difference shown above is taken from empirical Observation, and should not be confused with the 1.5 sigma shift.

Six Sigma Definition

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• What each sigma level means

6σ fruit

• Delicious fruits harvested in a timely manner
• New product/ process implementation (DFSS)

5σ barrier – Design Innovation

• Harvesting of fruits in large volume
• Results of process optimization (DMAIC)

4σ barrier – Process Innovation

• Harvesting only low-hanging fruits
• Results of 7 QC tools

3σ barrier – Development of Suppliers

• Collecting fruits fallen to the ground
• Results of basic production

What does Six Sigma Means

DESIGN for SIX SIGMA

DMADV

SIX SIGMA PROCESS IMPROVEMENT

The DMAICT methodology

LEAN WORKING

Process streamlining Process acceleration Waste elimination

CORRECTIVE ACTION

Kaizen blitz, Error proofing Problem solving

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What does Six Sigma Means

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Why Six Sigma?

Stretch goals leads to out-of-the-box thinking

 Yearly improvement of 5% to 10% are no longer competitive  Offers tools, approaches and technique to assess performance and identify areas for improvement  It applies to both products and service industry  3 to 4 Sigma level are no more acceptable 10 fold reduction in defect levels every 2 years ~ 68% reduction every year  Reduce cycle time by a factor of 10 every 5 years ~ 37% reduction each year

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Perspective of Quality Cost

Defect Rate Cost of Control Point of Diminishing Economic Returns from Quality Investments Failures Cost Quality Improvement

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Perspective of Quality Cost

Failures Cost Defect Rate Cost of Control 3s 4s 5s 6s Six Sigma Can Drive Down Cost of Control

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Core Workforce Development

FEA

• Determine Six Sigma strategy and

approve Project

• Advise Six Sigma strategy development

and guide BB

• Six Sigma specialist
• Guide Project, give GB training
• Project leader
• Do their own job concurrently
• Understand Six Sigma basically

Select talented core workforce and provide specialist training. Seed for Innovation

• Understand the basics of

6Sigma

Persons who verify performance of 6 sigma projects

Yellow Belt Green Belt Black Belt Master Black Belt Champion White Belt / All Executives & Employees

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Lean Sigma Success Factors

The “right” support The “right” project The “right” people The “right” roadmap & tool

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CUSTOMISE & SCALABLE BOTTOM LINE STRATEGY & KPIs PROVEN PROCESS HUMAN CAPITAL HIGH ROI

Lea ean Six Six S Sigma i is a a Jou

• urney t

to C

• Create

Proc

• ces

ess E Excel ellen ence

We create “Change Agents” in your

• rganization thus creating a “Change

Capable” company…

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Go See Act Improve Learn

• Learn by doing
• Don’t be afraid to

make mistakes

• Take action and

adjust

• Do not wait for the

perfect solution

• Go and see on the floor
• Observe to understand
• See the waste
• Never be satisfied with the current situation
• Standardize, follow-up, and systemize to maintain

improvements

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Link All Levels of the Organization...

Communicate Communicate Mentor Support Audit

Plant Manager Manager Supervisor Team Leader Operators

Communicate Mentor Support Audit Communicate Mentor Support Audit Communicate Mentor Support Audit Communicate Communicate Communicate

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Lean Enterprise Advancement Program (LEAP)

Method Outcome

7 3 4 2 1 5 6

1 : Briefing 2 : Setting Baseline 3 : Seting Objectives 4 : Project Planning 5 : Lean Enterprise 6 : Stabilisation 7 : Planning for Lean Future A : Kick Off B : Validation C : Final Review

C B A

Lean Champions Lean Masters Lean Kaizen Leaders

Top Management, GM, Sponsors, Senior Managers Managers, HODs, Senior Executives Executives, Supervisors, Members

1&2 1-7 5-7

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