Lean six sifgma process improvement tools and techiques pp1a

Lean Six Sigma
Chapter 1

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Six Sigma
• “The longer an article is in the process of
manufacture and the more it is moved
about, the greater the ultimate cost.”
• Henry Ford

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Six Sigma
• Lean tools and techniques are used to
standardize work and remove waste and
non value-added activities.
• Six Sigma tools and techniques are used
to attack the variation present in
processes.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Six Sigma
• Lean Benefits:
–
–
–
–
–
–
–
–

Reduced cycle times
Lower handling costs
Faster lead times
Decreased floor space usage
Lower inventory with greater inventory turns
Improved customer responsiveness and service
improved quality
Higher profit margins

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Six Sigma
• Lean thinking is a mindset best described
as a relentless war on waste.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Methodology
• Lean seeks to eliminate seven sources of
waste:
– Overproduction
– Idle time waste (waiting time/queue time)
– Delivery waste (transport/conveyance waste)
– Waste in the work itself
– Inventory waste
– Wasted operator motions
– Waste of rejected parts
Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Lean Methodology
• Lean thinking generates process
improvement by following five key
steps:
– 1. Study the process by directly
observing the work activities, their
connections and flow.
– 2. Study the process to systematically
eliminate wasteful activities, their
connections and flow.
Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Methodology
• Lean thinking generates process
improvement by following five key
steps:

– 3. Establish agreement among those affected
by the process in terms of what the process
needs to accomplish and how the process will
accomplish it.
– 4. Attack and solve problems using a
systematic method.

– 5. Integrate the above approach throughout
the organization

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Methodology
• Lean tools include:
– Kaizen
– Value stream process mapping
–5 S
– Kanban

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Methodology
• Lean tools include:
– Error proofing
– Preventive and predictive maintenance
– Setup time reduction
– Reduced lot sizes

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Lean Methodology
• Lean tools include:
– Line-balancing
– Schedule leveling
– Standardized work
– Visual Management

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Origins
• Bill Smith, Reliability Engineer, Motorola
Corporation
– The increasing complexity of systems and
products used by consumers created
higher than desired system failure rates.
– Holistic approach to reliability and quality
and developed a strategy for improving

both (1988).

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Methodology
• Six Sigma is a structured, data driven
methodology for eliminating waste from
processes, products, and other business
activities while having a positive impact on
financial performance.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Perceptions
• Six Sigma Perceptions
– Perceived to be a business system that
improves the bottom line.
– Perceived as fitting naturally into the business
systems of most companies.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Perceptions
• Six Sigma Perceptions
– Perceived as being more easily and more
successfully launched than traditional Total
Quality Management programs.
• TQM perceived as technical system owned by
technical specialists.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Comparison with Quality
Systems
Six Sigma

Quality Systems

Highly focused problemsolving system
DMAIC

Highly focused problemsolving system
PDSA

Focus on profits

Focus on improving
organizational performance
including profit

Tools include SPC, DOE, FMEA
Project management,
Benchmarking.

Tools include SPC, DOE, FMEA,
capability studies, benchmarking,
Theory of constraints

3.4 defects/million

Process capability

Focus on metrics

Measures of Performance

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,

Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Benefits
• Benefits of adopting the Six Sigma
methodology
– Enhanced ability to provide value to customer
– Enhanced understanding of key business
processes
– Reduction of waste
– Improved profit performance

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Focus
• Six Sigma Methodology focuses on:
– Customer knowledge
• Critical to Quality information

– Core processes
• Key business processes that deliver value directly
to the customer

– Accurate performance measures of both

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma Basis
• Six Sigma Methodology is based on:
– Statistical Process Control Techniques
– Data Analysis Methods
– Project Management Techniques
– Systematic Training of Participants

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma
• Six Sigma is data driven and
profit focused.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Six Sigma
• The goal of Six Sigma is to reach 3.4
defects per million opportunities over
the long term.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma
• Six Sigma seeks to reduce the
variability present in processes.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma
Sigma

Defects per million opportunities

Yield

1

690,000

30.90%

2

308,000

69.20%

3

66,800

93.30%

4

6,210

99.40%

5

320

99.98%

6

3.4

99.9997%

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.


Six Sigma
• An improvement of just 1 sigma can result
in a ten-fold reduction in the number of
defects
– At three sigma, 66,800 defects per million
costing $10/piece to fix = $668,000
– At four sigma, 6,210 defects per million
costing $10/piece to fix = $62,100

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.

Six Sigma Projects
• Six Sigma projects are selected based on
their ability to contribute to and enhance
an organization’s financial performance.

Lean Six Sigma: Process Improvement Tools and Techniques
Donna C. Summers

© 2011 Pearson Higher Education,
Upper Saddle River, NJ 07458. • All Rights Reserved.