Lean Six Sigma Dmaic Approach

Lean Six Sigma

Lean Six Sigma DMAIC Approach

Copyright 2005, AIT Group Inc. All rights reserved.

1

Lean Six Sigma

High Level DMAIC Approach Define

Measure

• When did it happen? • Where did it happen? • What is the success criteria?

Preliminary Data Analysis

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

SIPOC

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

Value Stream Mapping

Analyze • What is the subgrouping strategy?

• How often does this happen? • What trends have we observed relative to the target? NEM Baseline (IMR)

• Is the measurement process capable? • Is the test a destructive test?

• Is the process capable? • Do we want to reduce variation? • Do we want to shift the mean?

Advanced NEM (XbarR) • What variables are contributing to mean shifts? • What variables are contributing to variation?

Measurement System Analysis

Components Of Variation / ANOVA

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?

• What is causing failure? • What is the impact of failure? • How do we mitigate the risk of failure?

FMEA Operator & Product Activity Analysis

Copyright 2005, AIT Group Inc. All rights reserved.

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?

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

Control

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

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

2

Funnel-Down Many Variables to the Critical Few!

x xx xx

ny x’s

Fe w

X’

Analyze Analyze

Thought Map TMAP

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

x x x x x x xx x x

Lean Six Sigma

VARIATION OPPORTUNITY (Reduce Variation)

SIPOC

Ma

Measure Measure

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

Value Stream Mapping

s

Define Define

x x xxx x xx x x x x x x x x x x x x x x x xx x x x x x

VELOCITY OPPORTUNITY (Reduce Waste)

Improve Improve

Material Replenishment Improvement Considerations

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

Workplace Design 5S Implementation

Control Control

xx x x

Y=f(x)

Copyright 2005, AIT Group Inc. All rights reserved.

Control Strategies Standard Work Performance Metrics

Mistake Proofing

3

Define

Lean Six Sigma

Analyze

Measure

Project Charter Measurement System Evaluation

process performing today?

Gage name: Date of study: Reported by: Tolerance: Misc:

Gage R&R (ANOVA) for Labor Cost/T

Components of Variation

By Sample

Percent

100

500

%Contribution %Study Var

300

Gender

200

0 Gage R&R

Repeat

Reprod

Sample

Part-to-Part

1

2

R Chart by Administrato

Product Line

Sales $ (YTD)

Gross Margins

Production Volumes

Brackets

$ 70.3 Million

$ 2.8 M / 39%

80 Million

Wheels

$ 60 Million

$ 2.3 M / 38%

94 Million

Closures

$ 31.1 Million

$ 1 M / 33%

15 Million

$ $

Shafts

$ 21.5 Million

$ 1 M / 40%

5.4 Million

Separated Operations

$ 1.7 Million

$ 0.3 M / 19%

1.3 Million

Seals

$ 5 Million

Other Products

$ 0.7 M / 7%

$ 4 Million

4.5 Million

$ 0.3 M / 17%

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

Orders quantity from Delphi plants to merchant

Quantity per merchant. Delivered/Timing

Index used, timing & quantity's delivered & reported.

Accuracy

(Deliverables from the process )

Copper delivered to suppliers for transformation

Level & Stable

Merchants supply quotes

Global sourcing quotes

Selection of merchants based on

Delphi legal risk management (t.o), purchasing

Bailment contract

Risk protection

Buyer and receipt clerk

Dacor invoices, plant receipts, fabrication buyer P.O. 's

Accurate

Delphi cost accounting Supplier cost accounting

Delphi inventory records Inventory Reconciliation

Evaluate Measurement Systems ID Critical Variables

P.O. price and market index, quantity

Accurate

UCL=365.8 Mean=348.4 LCL=331.1 300

Merchants

Sample Range

Customer

Business

Yes

Directed?

No

Yes

Pursued?

ANOVA One-way ANOVA: Total No Errors versus Hiring Location (Site) Source Hiring Loc Error Total

1/1/02 – 12/31/03

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%

Weekly Quarterly

200

Failure Effects

(Describe what could go wrong.)

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

S E V

No Quote

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

Shared Information Level Knowledge Base Leveraged Synergies

Forecast Strategy

Note: Not part of strategic analysis for selling process

Identify Relationship Broker -or-Share Knowledge

Yes

C Tech Shows C Customer Contact Calls C Influence Peddling C! Divisional Strategic Analysis

No

1

2

3

4

5

N 105 8

Mean 55.41 55.50

StDev 8.63 8.21

SE Mean 0.84 2.9

Boxplot of Total No Errors by Hiring Location (Site) 10

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

XW = 55.41

XQ = 55.50

σˆ

σˆ

Conclusions:

Issue Invoice

Invoice is incorrect

Customer disputes invoice delaying payment (40 days)

Review and confirm invoices

Customer has dispute with invoice

Delay in payment due to invoice dispute (40 days)

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

O C C

Controls

D R E P T N

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

W

= 5.63

Q

= 8.21

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

Hiring location is not a significant contributing factor to errors!

8

6

4

2

0 Field

Sales TO Hiring Location (Site)

TO - RML

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

5

Price, Quantity or Work-scope does not agree with quote

4

Pricing database

8 4 0

Need to study dispute issues for reduction in disputes, Focus on Price

5

Miscommunication between ATL and Billing

3

None

7 5 5

Strengthen ATL communication with Billing by incentivised roles

3

None

7 5 5

Reduce disputes to alleviate workload

3

Accounts payable policy

6 5 0

Work with Customer to increase budget allocation for payments

Dispute resolution & reissue

Slow response by business unit

Delay in payment due to dispute (40 days)

5

Heavy workload creating conflicting priorities

Approve payment

Lack of funds budgeted for payment

Delay in payment process (30 days)

4

Limited budget allocation for weekly payments

Actions for improvement and next focus area identified

Complete Delphi Selling Strategy

Critical X’s

How do we mitigate process risk?

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

C Linked Divisional Strategic Analysis C! Unlinked Divisional Strategic Analysis

• Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold

What does the process look like?

All-In Costs

Value Stream Map Where should we focus?

Failure Mode

(What is the function of each step?)

No Quote Letter to Ford

C Doesn’t Fit Divisional Product Strategy C Doesn’t Fit Pursuit Plan C Poor Business Case

Execute Divisional Strategic Analysis

Yes

N! Relationships N! Strategic Importance N ROLR (Right of Last Refusal) C Red Flags C Strengths C Divisional Product Strategy C Pursuit Plan

Continuous Improvement

Part/process

Proceed With Sourcing C Profit Margin C Costs to Do

No

Pursued?

C Budget Disconnects C Resource Disconnects C Poor Documentation

Payment to merchant

Product Families

T-Test Weekly vs. Quarterly Grant Date Two-Sample T-Test and CI: Weekly, Quarterly

Failure Modes and Effects Analysis: Quote

Determine Business Opportunities

Unified Front to Customer Strategic Analysis for Selling (comparison & synergies applied) Divisional Intelligence & Lessons Learned (comparison & synergies applied) Philosophy of Quoting Techniques (comparison & synergies applied)

Per terms correct amount

1 2 3

Failure Modes & Effects Analysis

Business Plan

Product Portfolio Plan

Identify Product Portfolio Plans

N! Customer Directed Business N Vehicle Volume S CI0 (Budget, Resources) N Vehicle Timing No S PI (Budget, Resources) N Content N! ‘In Your Head’ N Ford Goals & Objectives N Personalities/Relationships S Opportunity Screener (Budget, Resources) C Customer Strategy/Portfolio C Divisional Strategies S Divisional Processes N Divisional Intelligence Apply S Divisional Quoting Philosophy Business

Info Shared Between Divisions?

=

Administrato

300

Sample

Control/Maintain Process Improvements

Payment to fabrication supplier Per terms correct + amount

Delphi Fabrication Suppliers

3

Implement Process Improvements

(Stakeholders who place the requirements on the outputs )

Accurate quantity's and value

2

Administrato*Sample Interaction

400

What is my project strategy?

ID Process Failure Modes

Analyze

Lessons Learned

Inventory accounting and costs

1

500

3

Characterize Processes

VOC When fabricated product is paid

2

Measure

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

+

What is the project scope?

1

400

Data Integrity?

Copper Tolling

Forecast from D Plants (Customer)

200

Administrato

Baseline Process

Requirements Requirements received from Delphi Plants

300

LCL=0

0

Customers

Outputs

(Top level des cription of the activity)

Delphi Plants PC&L

P.O. price entry Platts

R=17

0

Establish Project Scope

9.3 Million

Requirements

5

10

Define

Improve

Process

(Resources required by the process)

Copper Manager

Delphi accounting purchasing

20

Process Map

(Providers of the required resources)

4

400

30

200

SIPOC Copper Tolling Eric Sandford Inputs

40

Xbar Chart by Administrato

6σ Project Phases

3

By Administrato 500

3

Av erage

Problem Resolution Methodology

2

What variables are causing variation?

UCL=43.76

500

Control

Process Name: Process Owner: Suppliers

1

0

Sample Mean

Project Justification

ChiSquare

400 50

50

Thought Map

Hypothesis Testing

Total No Errors

Numerical Evaluation of Metrics How is the

• Need to further study source of disputes to resolve disputes

Process Flow & Employee Activity Analysis A REA NAME:

B EFORE - Car rier Asse mbly - B all B earings

PRE PA RE D BY:

SUP ERV IS OR:

DATE:

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

The Seven Wastes

PC & L

40

4 week rolling foreca st 6 week rolling foreca st

Custome r/r

Weekly Orde r

Distributo r

Weekly Orde r

Supplier

OVEN

Daily Ship Schedule

Demand/wee k: Part A = 500 50

33

D - Defective Production

31

Part B = 1200 120

Weekly Build Schedule

35

Bench

Part C = 700 70

21

Press 2x/ week

19

2x/ day

Anneal

Pickle

Point/Chamfe r

Straightening

Draw

I 6 coils

60 coils

I

20 coils

3000

Takt = 240 min

Takt = 240 min

Takt = 19 min

Takt = 20 sec

Takt = 20 sec

C.T. = 200 mi n

C.T. = 200 mi n

C.T. = 15 min

C.T. = 20.4 sec

C.T. = 10 sec

D.T. = 0.5%

D.T. = 1%

D.T. = 4%

D.T. = 3.1%

D.T. = 1%

FTQ = 100% C/O Ti me = 3 0 m

FTQ = 100%

FTQ = 99%

FTQ = 99%

FTQ = 100%

C/O Ti me = 1 0 min

C/O Ti me = 3 0 min

C/O Ti me = 1 5 min

C/O Ti me = 1 hr

Lot Size =

Lot Size =

Lot Size =

Lot Size =

# of Shifts = 2

# of Shifts = 2

# of Shifts = 2

# of Shifts = 2

WIP = 3 coils

WIP = 4 coils

WIP = 18 coils

WIP = 1500

Lot Size = # of Shifts = 2 pcs

WIP = 100 pc

Vice

Shipping

pcs

Where is the waste occurring ?

Copyright 2005, AIT Group Inc. All rights reserved.

28 36

23

Tool Box

39

41

26 14 13

Part 15 Box17

24

Trash

22 8

6

2 4 9 3018 12 16 20 44 34 38 42 32

29 25 3 37 27

1

5

11

Parts Rack

43

10

O - Over Production T - Transportation W - Waiting

7

I - Inventory M - Motion P - Processing

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

Improve

Control Strategies

Design of Experiments Design of Experiments:

Lean Six Sigma

Control

Type of Control (Fix, Minimize, Standardize, Measure & Monitor, Communicate, Audit)

ANOVA:

Control Set Point or Range

Management Requirements or Organizational Changes

Date Implemented or Projected to be Implemented

Responsible Individual

Fix, Communicate, Audit

Install or enable screen savers on all computers

Electric

Random implementation

All computers with screen savers

Communicated at DRL meeting, part of security audit

April, 2002

Jacovides, Director Steve, Security

Standardize, Audit

Establish a Facilities Coordinator to be responsible for DRL facilities needs

Gas, Electric, Water

No individual responsible

Personal Business Plan and Six Month Reviews

Change in job description, PBP's

May, 2002

John Biafora

Water

5 gal/ min, continuous

0 gal /min

Authorize chiller repair

June, 2002

John Biafora, Chris Thrush

1 gal/min, as needed

Authorize replumb

June, 2002

John Biafora, Chris Thrush

Temperature control, now flow only when using instrument

Authorize purchase of temperature sensor

June, 2002

John Biafora, Tom Ellis

June, 2002

John Biafora, Joseph Heremans

Facility Affected (Gas, Electric, Water)

Detailed Description of Control

Setting or Tolerance Prior to Controls

Price Variance = f(OTD, Sp Price, LT, Profile)

Factor Customer Profile Special Price Lead Time On-Time Delivery

Pareto Chart of the Standardized Effects (response is Var, Alpha = .10)

OTD

Type fixed fixed fixed fixed

Levels 2 2 2 2

Values Tier 1 Tier 2 N Y Post LT Prior LT N Y

Reduce water flow through SEM by replumbing and installing chiller

Fix, Measure

Fix, Measure

Water

2 gal/min, continuous

Thermostat control of outgoing water on MTS unit

Water

2.4 gal/min, continuous

Fix, Measure

Reduce flow through Hall Effect system

Reduce water flow through vacuum chamber

Water

4 gal/min, continuous

Fix, Measure

Reduce flow through e-beam evaporator

Water

8 gal/min, continuous

6 gal/min

Authorize replumb

Fix, Measure, Communicate

Sp Price

LT

Profile

0.0

Tie

0.5

r2 Tie

r1

1.0

1.5

Y

N

Pri

or

2.0

2.5

LT Po

st

LT Y

N

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

DF 1 1 1 1 11 15

SS MS 473 473 40905 40905 13053 13053 75488 75488 130267 11842 260186

F 0.04 3.45 1.10 6.37

P 0.845 0.090 0.316 0.028

Regression

Var 80

4 gal/min, continuous

3 gal/min, flow only during testing

Authorize replumb

June, 2002

John Biafora, Tom Ellis

Gas, Electric

94 k ft^3/min continuous

94 k ft^3/min 36% of total time

Placard

June-July, 2002

John Biafora, all lab users

Fix, Measure, Communicate

Adjust pre temperature air box per season

Gas, Electric

Random excursions in temperature

65 - 72 F

Authorize facilities study

June-July, 2002

John Biafora, Fred Scott

Gas, Electric, Water

None

Turn off specific exhaust and return air systems that do not jeopardize safety requirements

Lab Director authorize and communicate at group meeting

May, 2002

John Biafora and Jones Lange and LaSalle representative

Gas, Electric

None

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

Lab Director authorize

June-July, 2002

John Biafora and Jones Lange and LaSalle representative

Electric

None

Call from Detroit Edison to implement power curtailment

Lab Director authorize and communicate at group meeting

July-August, 2002

John Biafora

Reduce flow through environmental test chamber

Profile

Sp Price

LT

Fix, Standardize, Communicate

Turn off unused equipment at 7:00 PM

Standardize, Monitor, Measure

Program controls of specific exhaust and return air units that can be shutdown from 6:00 p.m. to 6:00 a.m. Mon. - Fri.

Fix, Standardize, Audit, Measure & Monitor

50

John Biafora, Chris Thrush

Water

Manual operation of exhaust hoods

Fix, Measure

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

110

June, 2002

Fix, Measure, Communicate

170

140

2.5 gal/min, unit on only Authorize replumb, communicate need when doing measurements to have flow only during usage

Curtail all non-essential power usage during peak electrical draw from the grid. Credit from electric supplier.

OTD

How do we sustain the gains?

How do we optimize critical inputs?

Standard Work Standard Job Sheet Part N umber Part D escri pti on Part F amil y

Cell or Process Design/To-Be Work Flow

2400172-1

15s

Impell ar

200s

33s

Standard Wor k Takt T ime in Proc ess

401s

Oper ator 3

Oper ator 2

25s

Safety

62s

245s

Quality Chec k

Revisi on: B

350s

Oper ator 1

190s

Date:

Casti ngs

161s

Lead Ti me

600s

191s

Number of Operators 3

Measure & Monitor Liner Web Break Downtime (min) by Month 98

99

1000

Individual Value

What does the future work flow look like?

Material Replenishment

500 3.0SL=253.4

1

X=167.4 -3.0SL=81.44

0 Subgroup Month

Moving Range

600

0

10

20

10/98

99

500 400 300 200 100 0

3.0SL=105.6 R=32.33 -3.0SL=0.00E+0

Have we met our goals?

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

5

Lean Six Sigma

Author

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.

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

Copyright 2005, AIT Group Inc. All rights reserved.

Lean Six Sigma

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Lean Six Sigma

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.

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

Supply Chain Mgmt. Value $ Six Sigma

www.theAITgroup.com

The TheAIT AITGroup Groupexcels excelsin inimplementation implementation… … not notrecommendation! recommendation! Copyright 2005, AIT Group Inc. All rights reserved.

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