Lean Six Sigma Overview - White Belt Training

Lean Six Sigma

Lean Six Sigma White Belt Training

Copyright 2005, AIT Group Inc. All rights reserved.

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Learning Objectives

Lean Six Sigma

• Know the origin and aims of Lean, Six Sigma, and Lean Six Sigma • Understand the roles and responsibilities within a Lean Six Sigma Deployment • Learn the Lean Six Sigma terms and definitions • Understand many of the tools and methods used in a Lean Six Sigma project and deployment

Copyright 2005, AIT Group Inc. All rights reserved.

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WIIFM (What’s In It For Me) • • • • • • • • •

Lean Six Sigma

Get rid of those problems that are taking all of your valuable time! Management’s ear An effective communication tool and common ‘language’ A community within the company – your classmates and previous classes Further develop group leadership skills Potential career advancement Stretch growth – satisfaction! Personal growth experience Fun!

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…yah but how will Lean Six Sigma do that for me???

Lean Six Sigma

• It is a problem solving methodology to put recurring problems to bed! • It will facilitates communication between people with different backgrounds and from different functions • Allows you to leverage and build on what you already know! • Can be applied in all areas of your life and career • It is built on standard tools and a standard methodology – helps simplify your discussions! • Helps drive focus and prevents gaps in logic • Uses data for sound conclusions • Focuses on fundamentally solving a problem NOT on adding band-aids and additional complexity • Requires team involvement and emphasizes sound communication • Minimizes emotion and conflict and moves to data-driven process-based solutions • It is visible to higher levels of the company • It has been proven successful across many industries, solved countless problems and saved billions of dollars

Focus on creating opportunities vs. resource constraints Copyright 2005, AIT Group Inc. All rights reserved.

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What Do Our Clients Want?

Copyright 2005, AIT Group Inc. All rights reserved.

Lean Six Sigma

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Lean History

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Lean Six Sigma

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Origins of Lean

Lean Six Sigma

• Lean has been around a long time: • Pioneered by Ford in the early 1900’s (33 hrs from iron ore to finished Model T, almost zero inventory but also zero flexibility!) • Perfected by Toyota post WWII (multiple models/colours/options, rapid setups, Kanban, mistake-proofing, almost zero inventory with maximum flexibility!)

• Known by many names: • Toyota Production System • Just-In-Time (JIT) • Continuous Flow

• Outwardly focused on being flexible to meet customer demand, inwardly focused on reducing/eliminating the waste and cost in all processes • Highly applicable to transactional businesses! • Whenever flexibility and speed are key: banks, technology firms and customer service organizations the most recent to adopt Lean practices

Copyright 2005, AIT Group Inc. All rights reserved.

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The Mathematical Foundation for Lean is Little’s Law

Lean Six Sigma

• To reduce Lead time, you have 2 choices: • Invest dollars of capital in people and equipment to increase Avg. Completion Rate • Invest Intellectual capital to reduce number of “Things In Process” using Lean Tools (Pull Systems, Setup Reduction, etc) and Six Sigma tools (Variation Reduction)

• Little’s Law: Mathematics of Theory of Constraints (TOC) and Toyota Production System (TPS)

No.of " Things In Process" Avg Lead Time = Avg Completion Rate

Copyright 2005, AIT Group Inc. All rights reserved.

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Sources of Waste

Lean Six Sigma

1. Transportation (moving items from one place to another) 2. Inventory (items/paperwork/information waiting to be processed) 3. Motion (excess movement and/or poor ergonomics)  Waiting (delays caused by shortages, approvals, downtime)  Overproduction (producing more than is needed)  Overprocessing (adding more “value” than the customer is paying for)  Defects (rework, scrap, inspection – Costs of poor quality) Another waste is: People (untapped and/or misused resources)

Copyright 2005, AIT Group Inc. All rights reserved.

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Toyota Production System – Waste Elimination (Applies to Every Process)

Lean Six Sigma

“The ability to eliminate waste is developed by giving up the belief that there is ‘no other way’ to perform a given task. It is useless to say, ‘It has to be done that way,’ or ‘This can’t be helped!’ At Toyota, we have found that there is always another way.” – Study of the Toyota Production System Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Lean Defined • What Lean Is: • • • •

An enabler to business strategy A way to remove waste from processes and practices Focused on process speed and flexibility Driven by quick-hit, high-impact team events to solve problems • A way to visualize processes through value-stream mapping • A way to teach people how to “think” about streamlining

• What Lean Is Not: • • • •

A business strategy Only for manufacturing companies About headcount reductions Only about the tools Copyright 2005, AIT Group Inc. All rights reserved.

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But Lean Alone Has Holes

Lean Six Sigma

• Lacks defined cultural infrastructure • Top leadership engagement • Deployment organization (Champions, Black Belts, etc.) • Sometimes lacks focus on customer

• Lacks a consistent methodology • Most lean efforts lack focus on variation elimination and simply “account for” the variability by carrying excess inventory and resources • Lean tools do not intrinsically focus on bringing a process under statistical control and maintaining that control allowing for unpleasant surprises

Copyright 2005, AIT Group Inc. All rights reserved.

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Six Sigma History

Copyright 2005, AIT Group Inc. All rights reserved.

Lean Six Sigma

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Six Sigma History

Lean Six Sigma

• Motorola was the first advocate in the 80’s • Six Sigma Black Belt methodology began in late 80’s/early 90’s • More recently, other companies have embraced Six Sigma:

• GE • Allied Signal • Bombardier • Sony • Project implementers names includes “Black Belts”, “Top Guns”, “Change Agents”, “Trailblazers”, etc. • Implementers are expected to deliver annual benefits between $500,000 and $1,000,000 through 3-5 projects per year • Top-down program with Executive and Champion support • Outwardly focused on Voice of the Customer, inwardly focused on using statistical tools on projects that yield high return on investment

Copyright 2005, AIT Group Inc. All rights reserved.

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Six Sigma History

Lean Six Sigma

• Nobody at GE gets promoted without Six Sigma training. • GE annual report examples: • 10-fold increase in life of CT scanner x-ray tubes • Improved yields of super-abrasives – worth a full decade of increased capacity despite growing demands • 62% reduction in turn-around time of railcar leasing repairs • Plastics business added 300 million pounds of new capacity – equivalent to “one free plant”

Copyright 2005, AIT Group Inc. All rights reserved.

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How Complex Are Your Products & Services? (% Shippable without Rework) # of Parts or Steps 1 2 3 4 5 10 30 50 100 300 500 1,000 3,000 5,000 10,000

±3σ (Cp=1.00)* 93.32% 87.08% 81.27% 75.84% 70.77% 50.09% 12.56% 3.15% 0.10%

±4σ (Cp=1.33)* 99.38% 98.76% 98.15% 97.54% 96.93% 93.96% 82.96% 73.24% 53.64% 15.43% 4.44% 0.20%

±5σ (Cp=1.67)* 99.98% 99.95% 99.93% 99.91% 99.88% 99.77% 99.30% 98.84% 97.70% 93.26% 89.02% 79.24% 49.75% 31.24% 9.76%

Lean Six Sigma ±6σ (Cp=2.00)* 99.9997% 99.9993% 99.9990% 99.9986% 99.9983% 99.9966% 99.9898% 99.9830% 99.9660% 99.8980% 99.8301% 99.6605% 98.9849% 98.3140% 96.6564%

* Distribution shifted by 1.5σ Copyright 2005, AIT Group Inc. All rights reserved.

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Why 99% Is Not Good Enough

Lean Six Sigma

• The “goodness level” of 99% equates to: • 20,000 lost articles of mail per hour • 5,000 incorrect surgical operations per week • 200,000 wrong drug prescriptions each year • No electricity for almost 7 hours per month

Copyright 2005, AIT Group Inc. All rights reserved.

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Six Sigma Defined

Lean Six Sigma

• What Six Sigma Is: • An enabler to business strategy • Places customers at the center of performance improvements • Fact-based approach for improving business processes and solving business problems • A proven methodology and toolset supported by deep training and mentoring • Focused on reducing variability of processes • A way to develop highly skilled business leaders • A means for creating capacity in organizations

• What Six Sigma Is Not: • • • • • •

A business strategy A way to develop statisticians and engineers Only for manufacturing companies Only about “cost reductions” A “flavor of the month” approach An approach that slows decision making and business outcomes Copyright 2005, AIT Group Inc. All rights reserved.

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But Six Sigma Alone Has Holes

Lean Six Sigma

• Six Sigma lacks many concepts and tools lean is strong in • • • • • •

Set-up reduction Waste elimination Mistake Proofing Cycle-time improvement Process simplification Work in process control and reduction

• Six Sigma has long time-lines for projects (4-18 months) compared to Lean (1-4 months) • Six Sigma specialists (Black Belts) are often less productive than Lean specialists • Six Sigma Black Belts do 3-5 projects a year • Dedicated Lean project leaders do 10-20 projects a year

• Six Sigma is often seen as being “too slow” Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Lean and Six Sigma Integration

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Six Sigma & Lean Integration

Lean Six Sigma

Why Integrate? “We knew we wanted to have Six Sigma Tools, that was clear. But we also decided that what really makes change in a factory are some of the Lean tools. Putting in a pull system, reducing batch sizes, significantly changing setup times, all of a sudden everything starts to flow. Those are the types of things we saw over time that really made a difference in our factories and so we said that has to be a part of this training.” – Lou Guiliano, ITT Industries CEO on integrating lean techniques into ITT’s Six Sigma Rollout

Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Lean and Six Sigma Together Lean Speed + Waste X +

Six Sigma Quality, Cost + Explicit Approach

Implicit Approach

• Goal – Reduce waste and increase process speed • Focus – Bias for action/ Utilize existing, proven Lean Tools • Method – Kaizen events, Value Stream Mapping

Lean Six Sigm a

• Goal – Improve performance on Critical Customer Requirements • Focus – Use repeatable DMAIC approach for sustained results • Method – Intense focus on projects, performance improvement a key leadership activity

Lean Speed Enables Six Sigma Quality

Six Sigma Quality Enables Lean Speed

(Faster Cycles of Experimentation/Learning)

(Fewer Defects Means Less Rework) Copyright 2005, AIT Group Inc. All rights reserved.

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Six Sigma with Lean Is the Integration of Two Powerful Business Improvement Approaches Precision + Accuracy + VOC

• Six Sigma • • • • • • • •

Voice of the Customer (VOC) Statistical Process Control Design of Experiment Error-proofing Measurement Systems Analysis Failure Modes Effect Analysis Cause and Effect Analysis Hypothesis Testing

Lean Six Sigma

Speed + Low Cost + Flexibility

• Lean • Value stream mapping • Bottleneck identification and removal • “Pull” from the Customer • Setup and queue reduction • Process flow improvement • Kaizen • Supply Chain Strategy • 5S • S&OP

Copyright 2005, AIT Group Inc. All rights reserved.

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Integrating Lean and Six Sigma Initiatives

Lean Six Sigma

• Lean and Six Sigma can co-exist independently, but the benefits of integration are tremendous... • Single channel for employing limited resources • One improvement strategy for the organization • Highly productive and profitable synergy

…while the pitfalls of not integrating them are formidable • Divided focus of the organization • Separate and unequal messages for improvement • Destructive competition for resources and projects

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Six Sigma and Lean

Lean Six Sigma

• Six Sigma is the “Unifying Framework” • Six Sigma provides the improvement infrastructure • CEO Engagement • Deployment Champions • Green Belts, Black Belts, Master Black Belts

• Over-riding methodology: DMAIC, DMEDI, DMADV

• Lean provides additional tools and approaches to “turbo-charge” improvement efforts • Tools: Set-up reduction, 5S, Kanban, Waste Reduction • Approaches: Kaizen, Mistake-proofing

Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Lean Six Sigma Synergy Overall Yield vs. Sigma (Distribution Shifted ±1.5σ)

±3σ

1

93.32%

Lean Reduces Non-Valued Add Steps

# of Steps

±4σ

99.379%

±5σ

±6σ

99.9767 99.99966% ly

7

61.63

10

50.08

20

25.08

40

ix S an e L

es v i r D a m Sig 6.29

us o 95.733 99.839 ltane 99.9976 u m i tS s o C 93.96 and 99.768 99.9966 d ee p S , y lit a 88.29 99.536 99.9932 Qu

77.94

99.074

99.9864

Six Sigma Improves Quality of Value Add Steps

urce: Six Sigma Research Institute, Motorola University, Motorola, Inc. Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Lean Six Sigma

Improvement Process Road Map Define Activities

•Review Project Charter •Validate Problem

Statement and Goals •Validate Voice of the Customer & Voice of the Business •Validate Financial Benefits •Validate High-Level Value Stream Map and Scope •Create Communication Plan •Select and Launch Tools •Project Team Charter •Voice of the Develop Project Customer Schedule and Kano •Analysis Complete Define Gate •SIPOC Map •Project Valuation / ROIC Analysis Tools •RACI and Quad Charts •Stakeholder Analysis •Communication Plan •Effective Meeting Tools •Inquiry and Advocacy Skills •Time Lines, Milestones,

Measure

Analyze

•Identify Potential Stream Map for Deeper Understanding and Root Causes •Reduce List of Focus •Identify Key Input, Process Potential Root Causes and Output Metrics •Confirm Root •Develop Operational Cause to Output Definitions •Develop Data Collection Relationship • Estimate Impact of Plan •Validate Measurement Root Causes on Key Outputs System •Prioritize Root •Collect Baseline Data •Determine Process Causes •Complete Analyze Capability Identify and Implement •Complete Measure Gate Gate •Value Stream Mapping •Process Constraint ID •Value of Speed (Process and Takt Time Analysis •Cause & Effect Cycle Efficiency / Little’s Law) Analysis •Operational Definitions •FMEA •Data Collection Plan •Hypothesis Tests/Conf. •Statistical Sampling Intervals •Measurement System •Simple & Multiple Analysis (MSA) Regression •Gage R&R •ANOVA •Kappa Studies •Components of •Control Charts Variation •Histograms •Conquering Product •Normality Test and Process •Process Capability Complexity •Queuing Theory Analysis •Value

Improve •Develop

Potential Solutions •Evaluate, Select, and Optimize Best Solutions •Develop ‘To-Be’ Value Stream Map(s) •Develop and Implement Pilot Solution •Confirm Attainment of Project Goals •Develop Full Scale Implementation Plan •Complete Improve Gate

Control •Implement

Mistake

Proofing

SOP’s, Training Plan & Process Controls •Implement Solution and Ongoing Process Measurements •Identify Project Replication Opportunities •Complete Control Gate •Transition Project to Quick Improvements Process Owner Kaizen, 5S, NVA Analysis, •Mistake-Proofing/ Generic Pull Systems, Zero Defects Four Step Rapid Setup Method •Standard Operating Procedures (SOP’s) •Replenishment •Process Control Plans Pull/Kanban •Visual Process Control •Stocking Strategy Tools •Process Flow •Statistical Process Improvement Controls (SPC) •Process Balancing •Solution Replication •Analytical Batch Sizing •Project Transition •Total Productive Model Maintenance •Team Feedback •Design of Experiments Session (DOE) •Solution Selection Matrix •Piloting and Simulation

Copyright 2005, AIT Group Inc. All rights reserved.

•Develop

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Lean Six Sigma

Define

• Develop a Project Charter with the Project Focus, Key Metrics, and Project Scope • Select Team Members and Launch Project • Identify Stakeholders and develop a communication plan • Identify the Customers and Capture the “Voice of the Customer” Requirements (typically Quality and/or Speed) • Identify the Process Owner and Capture the “Voice of the Business” Requirements (typically Cost and/or Speed) • Develop Critical Customer Requirements (CCR’s) and Critical Business Requirements (CBR’s) • Finalize Project Focus and Modify Project Charter • Define Gate Review = key deliverable Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Measure • • • • • • • • •

Identify Key Input, Process and Output Metrics Clearly define Operational Definitions Develop a Data Collection Plan Validate the Measurement Systems Collect Baseline Data Determine Process Performance / Capability Validate the Business Opportunity Identify “Quick Win” Opportunities Measure Gate Review

= key deliverable Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Analyze

• Brainstorm Key Process Input Variables & Key Process Variables (KPIVs & KPV’s, I.e. Potential Root Causes) • Prioritize Root Causes • Conduct Root Cause Analysis • Validate the Root Causes • Estimate the Impact of Each Root Cause on the Project’s Performance Output • Quantify the Opportunity • Prioritize Root Causes • Analyze Gate Review

= key deliverable Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Improve • Develop Potential Solutions • Develop Evaluation Criteria & Select Best Solutions • Evaluate the Solutions for Risk • Optimize the Solution • Develop ‘To-Be’ Process Map(s) and High-Level Implementation Plan • Develop Pilot Plan and Pilot the Solution • Improve Gate Review

= key deliverable Copyright 2005, AIT Group Inc. All rights reserved.

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Lean Six Sigma

Control • • • • • • • • •

Institutionalize Process Changes and Controls Finalize SOP’s, Training Plan & Process Control System Implement Process Changes and Controls Stabilize and Begin Monitoring the Process Transition Project to Process Owner Identify Project Replication Opportunities Prove Changes Resulted In Improvement Calculate Financial Benefits Control Gate Review

= key deliverable Copyright 2005, AIT Group Inc. All rights reserved.

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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 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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