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Session III“LEAN Enterpriseand Six Sigma”

LEAN EnterpriseIs a methodology that relies on a collaborative teameffort to improve performance by systematicallyremoving waste; combining Lean Manufacturing,lean enterprise and six sigma to eliminate the eightkinds of waste; defects, overproduction, waiting,non-utilized talent, transportation, inventory,motion, extra-processing2

Types of waste Categories of waste Workplace organization Concept of flow Inventory control Visual management Kaizen Value stream3

Non-value added and unnecessary for thesystem to function. Non-value added and necessary for the systemto function. Non-value added due to variation in quality,cost, or delivery. Non-value added due to overstressing people,equipment, or system.4

Categories of Waste Overproduction; Producing more, earlier, or faster thenrequired by the next process. Waiting; Any idle time or delay waiting for materials. Transportation; Any movement of material. Defects; Products or services that do not conform tospecifications. Inventory; Any inventory in the value stream. Motion; Any motion of a person’s body. Extra Processing; Processing that does not add value.5

Workplace Organization“5S’s” Sort; Divide items into three piles: necessary, belongto another process, and unknown. Straighten; Arrange remaining items to reduce oreliminate motion. Shine; Practice good housekeeping. Standardize; Document the process. Sustain; Maintain by charts, checklists, and audits. Sometimes Safety6

Concept of Flow Continuous with a minimum of variation. Forces employees to concentrate on the process. Equipment needs to be flexible & makechangeovers quickly. Cell technology is applicable.7

Concept of FlowThis utopian situation requires one-piece flow. It Reduces time between order and delivery, Prevents wait time and delays, Reduces labor & space to store and move materials, Reveals any defects & problems early in the process, Reduces damage, Provides production flexibility, Reveals non-value activity.8

Inventory Control JIT; Right material arrives at the right time in the rightamount. Items are pulled through the system to the internal orexternal customer. Kanban is used as a signal to replenish items. Taki (beat) time, which is the rate of production basedon customer demand. IT system controls the entire logistics from rawmaterials to consumer purchase.9

Visual Management A picture is worth a thousand words. Visual displays are used to inform people aboutcustomers, projects, performance, goals, etc. Signals are used to alert people about problems.10

Kaizen Management encourages the continual activity ofsmall process improvements by operators. Kaizen Blitz is a highly focused action-oriented 3-5day improvement workshop by a multifunction teamto improve a specific process.11

Value Stream The specific flow of activities required to design,order, produce, and deliver a product or service tocustomer(s). May be more than one value stream in anorganization. Ideally it will only include value-added activities.12

Value Stream All operations are: Capable of meeting quality requirements. Available with no downtime. Efficient to eliminate unnecessary use of energy andmaterials. Able to meet customer demand.13

Value Stream Map VSM graphically describes the sequence andmovement of the activities. First develop map of current state. Next develop map of ideal state with only valueadded activities. Difference provides opportunities for improvement.14

Value Stream Map15

Implementing Lean1.2.3.4.5.6.7.8.9.Establish cross-function team.Train in lean fundamentals.Construct VSM for current and ideal.Analyze maps for best place to start.Train people in lean and simple SPC tools.Apply 5S and Kaizen.Use Kaizen blitz where appropriate.Expand to other areas.Standardize the improvements.17

Six Sigma 1980’s at Motorola, which won the Baldrige NationalQuality Award in 1988 Significant improvement in quality. Mid 1990’s other companies obtained similar results. Six Sigma is both a quality management philosophy anda methodology that focuses on reducing variation,measuring defects, and improving quality of products,processes and services.18

Statistical Aspects Sigma, σ, is the Greek symbol for population standarddeviation, which is the best measure of variation. If we can reduce variation to the point that thespecifications are at 6σ, then 99.9999998% of the itemsare satisfactory. The nonconformance rate is .002 ppm. According to the philosophy processes shift 1.5σ, whichgives a conformance rate of 99.9996600% or anonconformance rate of 3.4 ppm.19

Centered 30.570.330.671.001.331.67 1s 2s 3s 4s 5s68.795.4599.7399.993799.999943 6s99.99999980.0022.0020

Off Centered LIMITCONFORMANCERATE (PPM)CAPABILITY (CPK) 1s 2s 3s 4s 106,2102,330–0.1670.1670.5000.8341.167 6s99.99966003.41.50021

LEAN Enterprise Is a methodology that relies on a collaborative team effort to improve performance by systematically removing waste; combining Lean Manufacturing, lean enterprise and six sigma to eliminate the eight kinds of waste; defects, overproduction, waiting, non-utilized talent, transportation, inventory, motion, extra-processing 2

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