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

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

• What is the subgrouping strategy?

• 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!

Analyze

x’s ny Ma

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

X’s

Measure

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

Value Stream Mapping

Fe w

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

Lean Six Sigma

VARIATION OPPORTUNITY (Reduce Variation) Thought Map TMAP SIPOC

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

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

Control

xx x x

Y=f(x)

Copyright 2005, AIT Group Inc. All rights reserved.

5S Implementation Control Strategies Standard Work Performance Metrics

Mistake Proofing

3

Define

Lean Six Sigma

Analyze

Measure

Project Charter

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

Gage R&R (ANOVA) for Labor Cost/T Components of Variation

By Sample

100

500

%Contri bution %Study Var

300

Gender

200

0 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

$ 0.3 M / 19%

1.3 Million

Separated Operations $ 1.7 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

Copper Tolling Eric Sandford Inputs (Resources required by the process )

Copper Manager

Orders quantity from Delphi plants to merchant

Quantity per merchant. Delivered/Timing

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

Accuracy

Process

(Deliverables from the proces s )

Evaluate Measurement Systems

Implement Process Improvements

Forecast from D Plants (Customer)

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

Identify Product Portfolio Plans

UCL=365.8 Mean=348.4 LCL=331.1

300

+

No

Per terms correct amount

Merchants

No Quote Letter to Ford

Failure Mode

(What is the function of each step?)

Failure Effects

(Describe what could go wrong.)

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

S E V

No Quote

C Poor Busine ss Ca se

N! Relationships N! Strategic Im portance N ROLR (Right of Last Refusal) C Red Flags C Strengths C Divisional Prod uct S trategy C Pursuit Plan

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

Shared Information Leve l Knowledge Base Leve raged Sy nergies

Forecast Strategy

Note: Not part of strategic analysis for selling process

Identify Relationship Broker -or-Share Knowledge

Yes

C T ech S how s C Custom er Contact Calls C Influe nce Peddling C! Divisional S trategic Analysis

No

300

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

1/1/02 – 12/31/03

N W eekly 105 Quarterly 8

1

2

3

4

5

Mean 55.41 55.50

StDev 8.63 8.21

X W = 55.41

X Q = 55.50

Conc lusions: W

= 5.63

σˆ Q

= 8.21

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

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%

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

σˆ

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?)

Hiring location is not a significant contributing factor to error s!

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

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

Work with Customer to increase budget allocation for payments

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! Unlinke d Divisional Strat egic Analysis

What does the process look like?

Value Stream Map Where should we focus?

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

200

C Doesn’t F it Divisio nal Product Strate gy C Doesn’t F it Pursuit Plan

Execute Divisional Strategic Analysis

Yes

All-In Costs

Product Families

Administrato 1 2 3

Sample

Part/process

Proceed With Sourcing C Profit M argin C Costs to Do

No

Info Shared Between Divisions?

Delphi Fabrication Suppliers

Yes

Pursued?

Pursued?

Continuous Improve ment

Payment to merchant =

Business

Yes

Directed?

Unified Front to Custom er Strategic Analysis for S ellin g (compariso n & synergies applied) Divisional Intelligence & L essons Learn ed (com parison & sy nergies applied) Philosophy of Quoting Techniques (comparis on & sy nergies applied)

Accurate quantity's and value

3

400

Failure Modes and Effects Analysis: Quote

Customer

C Budget Disconne cts C Resourc e Disconnects C Poor Docum entation

Payment to fabrication supplier Per terms correct + amount

2

500

Failure Modes & Effects Analysis

Business Plan

Determine Business Opportunities

N! Custom er D irected Busine ss N Vehicle Volume S CI0 (Budge t, Resources) N Vehicle Timing No S PI (Budget, Resources) N Content N! ‘In You r Head’ N Ford Goals & Objectives N Personalitie s/Relationship s S Opportunity Screener (Budget, Resourc es) C Customer Strategy/Portfolio C Divisional Strate gies S Divisiona l Processes N Divisio nal Inte lligence Apply S Divisiona l Quoting Philosophy Business

Lessons Learned

Inventory accounting and costs

1

Administrato*Sample Interaction 3

What is my project strategy?

VOC When fabricated product is paid

2

Data Integrity ?

Product P ortfolio Plan

(Stakeholders who place the requirements on the outputs)

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

Copper Tolling

Accurate

1

400

Control/Maintain Process Improvements

Requirements Copper delivered to suppliers for transformation

200

Administ rato

200

Customers

Outputs

Requirements received from Delphi Plants

300

LCL=0

Characterize Processes

ID Critical Variables

Improve

(Top level des cription of the activity)

Delphi Plants PC&L

P.O. price and market index, quantity

0

0

ID Process Failure Modes

9.3 Million

Requirements

What is the project scope?

R=17

10

Process Map

(Providers of the required res ources )

P.O. price entry Platts

20

Baseline Process

Analyze

5

What variables are causing variation?

400

30

500

SIPOC

Delphi accounting purchasing

40

Establish Project Scope

Measure

4

500

UCL=43.76

Xbar Chart by Administrato

6σ Project Phases

3

By Administrato 3

Define

Control

Process Name: Process Owner: Suppliers

2

Av erage

Problem Resolution Methodology

1

0

Sample Mean

Project Justification

Sample Range

50

Thought Map

ChiSquare

400 50

Gage R&R

Hypothesis Testing

Total No Errors

process performing today?

Measurement System Evaluation Percent

Numerical Evaluation of Metrics How is the

• Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold • Need to further study source of disputes to resolve disputes

Process Flow & Employee Activity Analysis AREA NAME:

BEFORE - Car rier Asse mbly - Ball Bearings

PREPARED BY:

SUPERVIS 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 4 week rolling foreca st 6 week rolling foreca st

Weekly Order

Distributor

Weekly Orde r

Supplier

Daily Ship Schedule

40

Customer Customer/

Demand/week:

OVEN

Part A = 500 50 Weekly Build Schedule

35 33 31

Part B = 1200 120

21

Press 2x/ week

19

2x/ day

Anneal

Pickle

Point/Chamfe r

Straightening

Draw

Shipping

Vice

Where is the waste occurrin Copyright 2005, AIT Group Inc. All rights reserved. g?

I

6 coils

60 coils

I

20 coils

3000

Takt = 240 min

Takt = 240 min

Takt = 19 min

Takt = 20 sec

C.T. = 200 mi n

C.T. = 200 mi n

C.T. = 15 min

C.T. = 20.4 sec

Takt = 20 sec C.T. = 10 sec

D.T. = 0.5%

D.T. = 1%

D.T. = 4%

D.T. = 3.1%

D.T. = 1%

FTQ = 100%

FTQ = 100%

FTQ = 99%

FTQ = 99%

FTQ = 100%

C/O Time = 3 0 m

C/O Ti me= 10 min

C/O Time = 3 0 min

C/O Time = 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

pcs

28 36

23

Tool Box

39

41

26 14 13

Part 15 Box17

D - Defective Production

Bench

Part C = 700 70

Trash

24

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

WIP = 100 pc

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, M inimize, Standardize, Measure & Monitor, Communicate , Audit)

ANOVA:

Detailed Description of Cont rol

Facility Affected (Gas, Electric, Wate r)

Setting or Tolerance Prior to Cont rols

Control Set Point or Range

Management Requirements or Organization al C hange s

Date Implemented or Projected to be Implemented

Responsible Individual

Fix , Communicate, Audit

Install or en able screen savers on all computers

Electric

Random im plementation

All computers with screen savers

Comm unicated at DRL meeting, part of securit y audit

April, 2002

Jacovides, Director Steve, Security

Standardize, Audit

Establish a F acilities Coordinator to be responsible f or DRL facilities needs

Gas, Electric, Wat er

No indiv idual responsible

Personal Business Plan and Six Month Reviews

Change in job de scription, PBP's

May, 2002

John Biaf ora

5 gal/ min, continuous

0 gal /min

Authorize chiller rep air

June, 2002

John Biafora, Chri s Thrush

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

Fix, Measure

Reduce wat er flow through SEM by replum bing and installing chiller

Water

Fix, Measure

Reduce wat er flow through v acuum chamber

Water

2 gal/min, continuous

Authorize replumb

June, 2002

John Biafora, Chri s Thrush

Thermostat control of outgoing water on MTS unit

Water

2.4 gal/min, continuous

Temperature control, now flow only when using instrument

Authoriz e purchase of temperature sensor

June, 2002

John Biafora, Tom Ellis

Fix, Measure

Reduce flow through Hall Ef fect system

Water

4 gal/min, continuous

2.5 gal/mi n, unit on only when doing measurem ent s

Authorize replumb, communicat e need to have flow only during usage

June, 2002

John Biafora, Joseph Heremans

Fix, Measure

Reduce flow through e-beam ev aporator

Water

8 gal/min, continuous

6 gal/min

Authorize replumb

June, 2002

Fix, Measure

Reduce flow through environmental test cham ber

Fix, Measure, Communicate

1 gal/min, as needed

Sp Pric e

LT

Profile

Main Effects Plot (data means) for Var 0.0

Tie

r1

0.5

r2 Tie

1.0

N

1.5

Y

Pri

or

2.0

2.5

LT Po

st

LT N

Y

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

DF 1 1 1 1 11 15

SS 473 40905 13053 75488 130267 260186

MS 473 40905 13053 75488 11842

F 0.04 3.45 1.10 6.37

P 0.845 0.090 0.316 0.028

Regression

4 gal/min, continuous

3 gal/mi n, flow only during testing

Authorize replumb

June, 2002

John Biaf ora, Tom Ellis

Manual operation of exhaust hoods

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 Biaf ora, Fred Scott

Gas, Electric, Wat er

None

Turn of f specific exhaust and return air systems that do not jeopardize safet y requirements

Lab Director authorize and comm unicate at group meet ing

May, 2002

John Biafora and Jones Lange and LaSalle representative

Gas, Electric

None

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

Lab Director autho rize

June-July, 2002

John Biafora and Jones Lange and LaSalle representative

Electric

None

Call f rom Detroit Edison to implement power curtailment

Lab Director authorize and comm unicate at group meet ing

July-August, 2002

John Biaf ora

170

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

Var

140

110

80

Sp Price

LT

Fix, Standardize, Communicate

Turn off unused equipment at 7:00 PM

Standardize, Monitor, Measure

Program controls of specif ic exhaust and return air units that can be s hutdown from 6:00 p.m. to 6:00 a.m . Mon. - Fri.

Fix , Standardize, Audit, Measure & Monitor

Curtail all no n-essential po wer 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

190s

Quality Chec k

Revisi on: B

350s

62s

33s

Standard Wor k Takt T ime in Proc ess

401s

Oper ator 3

Oper ator 2

25s

Safet y

Dat e:

Casti ngs

161s

Lead Ti me

600s

245s

Oper ator 1

191s

Number of Operators 3

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

What does the future work flow look like?

Individual Value

Profile

Material Replenishment

98

99

1000

500 3.0SL=253.4

1

X=167.4 -3.0SL=81.44

0 Subgroup Month

Moving Range

50

John Biaf ora, Chris Thrush

Water

Fix, Measure, Communicate

600

0

10

20

10/98

99

500 400 300 200 100 0

3.0SL=105.6 R=32.33 -3.0SL=0.00E+00

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

7

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 Value $

Supply Chain Mgmt.

Six Sigma www.theAITgroup.com

The AIT Group excels in implementation … not recommendation! Copyright 2005, AIT Group Inc. All rights reserved.

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