Introductie LEAN & Six Sigma 1 October 2009
Voorstellen Thijs Keuning HTS Werktuigbouwkunde Daf Trucks, Eindhoven Power Packer Oldenzaal Operations Leader Actuant, Milwaukee LEAD coordinator Power Packer Oldenzaal Global Operations leader
Inhoud Lean Six Sigma Lean & Six Sigma LEAN & Six Sigma Structure Lean in HR Processes Lean in the Business Organization Critical Success Factors Discussie
LEAN Kaizen, Maasaki Imai Lean Toyota Production System, Taiichi Ohno
KAIZEN KAI = Change ZEN = Good (for the better) KAIZEN = Continuous Improvement
What is Lean? Lean is a continuous improvement process of eliminating waste to reduce the actual time between when a customer expresses a need and when that need is satisfied.
Why LEAN costs + margin = sales price sales price costs = margin
Why LEAN forecast accuracy Forecast accuracy as function of time 100% 80% 60% 40% 20% 1 # days before shipment 0% order parts receive parts manuf. assembly shipment PWC Delivery Perf. supplier High C/O time Low O.E.E Process availability Assembly errors Rejects End-test
Why LEAN
CASH is King Business, cost of sales 130,000,000 Throughput time is 4 weeks Material turn = Inventory = 13 10,000,000 Throughput time is 2 weeks Material turn = Inventory = 26 5,000,000
INVENTORY (EXCESSIVE) MUDA of Inventory WHEN THE INVENTORY IS FULL... WATER SURFACE ABNORMAL OPERATION AFTER THE UNNECESSARY INVENTORY HAS BEEN REMOVED... GENERATION OF DEFECTIVE PRODUCTS DELAY IN DELIVERY UNSEEN OBSTACLES AND DEFECTS IMBALANCE IN WORKFORCE PERFORMANCE PROBLEMS BECOME APPARENT BREAKDOWN OF PRODUCTION FACILITY
Learning to See Added Value & Waste
Definition of Value Added From the Customer s perspective, every activity process that involved in creating the product or service can be considered as Value-Added or Non Value-Added Value-Added Activities Transforms material or information Done correctly the first time What the Customer wants What the Customer is willing to pay for Non Value-Added Activities (but necessary) Activities causing no value to be created but which cannot be eliminated Required activities by regulatory agencies Necessary due to risk reduction Non Value-Added Activities Activities that consume resources (time or space) but create no value in the customers eyes
What is Waste? Anything other than the minimum amount of equipment, materials, parts, space, and time, which are absolutely essential to add value to the product or information. If it doesn t add value - - it s waste.
Waste - Non-Value Adding Activities The goal is to do only Value Adding activities VA VA The opportunity is to eliminate as much of the Non Value Adding activities NVA NVA
Value Stream Mapping Coils Plc 1270m Coils 6 Week- Forecast Weekly Fax Production Planning MRP 90/60/30 Day Forecast Daily Order XYZ Ltd 18.400 pcs / Month -12.000 Left Tues. and Fri. Weekly Schedule Daily Ship Schedule - 6.400 Right Tray = 20 Pieces 2 Shifts 1x Daily Coils 5 days Stamping S. Weld 1 S. Weld 2 Assembly 1 Assembly 2 200 T 4.600 L 2.400 R 1.100 L 600 R 1.600 L 850 R 1.200 L 640 R 1 1 1 1 1 2.700 L 1.440 R Shipping Staging C/T = 1 Sec. C/O = 1 Hour Availability=85% 27.600 Sec. avail. EPE = 2 Weeks C/T = 39 Sec. C/O = 10 Min. Availability=95% 2 Shifts 27.600 Sec. avail. C/T = 46 Sec. C/O = 10 Min. Availability=80% 2 Shifts 27.600 Sec. avail. C/T = 62 Sec. C/O = 0 Availability=95% 2 Shifts 27.600 Sec. avail. C/T = 40 Sec. C/O = 0 Availability=95% 2 Shifts 27.600 Sec. avail. Production Lead Time = 23.6 days 5 days 1 sec 7.6 39 sec 1.8 46 sec 2.7 62 sec 2 days 40 sec 4.5days days days days Value Added Time = 188 sec
Value Stream Mapping Tues. and Fri. Coils Plc 1270m Coils Too Much Transport 6 Week- Forecast Weekly Fax Production Planning MRP Weekly Schedule Over Production 90/60/30 Day Forecast Daily Order Ship to order make to forecast Daily Ship Schedule XYZ Ltd 18.400 pcs / Month -12.000 Left - 6.400 Right Tray = 20 Pieces 2 Shifts 1x Daily Coils 5 days 5 days Stamping S. Weld 1 S. Weld 2 Assembly 1 Assembly 2 200 T 1 4.600 L 1 1.100 L 1 1.600 L 1 1.200 L 1 Big C/T = 1 Sec. Batches C/O = 1 Hour Availability=85% 27.600 Sec. avail. EPE = 2 Weeks 2.400 R C/T = 39 Sec. C/O = 10 Min. Availability=95% 2 Shifts 27.600 Sec. avail. 600 R C/T = 46 Sec. C/O = 10 Min. Availability=80% 2 Shifts 27.600 Sec. avail. 850 R 640 R Scrap & C/T = 62 Sec. C/T = 40 Sec. Rework C/O = 0 C/O = 0 Availability=95% Availability=95% 2 Shifts 27.600 Sec. avail. 2 Shifts 27.600 Sec. avail. 1 sec 39 sec 46 sec 62 sec 40 sec 7.6 days 1.8 days 2.7 days 2 days 4.5days 2.700 L 1.440 R Shipping Staging Constant Fire Fighting Production Lead Time = 23.6 days Value Added Time = 188 sec
Goal is to Identify & Eliminate Waste
Three Inefficiencies Waste Unevenness Strain
LEAD TOOLS Foundations 5S VSM Assessment Policy Deployment TPM OEE SMED TQM Makigami JIT Kanban Six Sigma MBF New Product Development Lean Line Design Poka Yoke Visual Workplace
LEAN Continuous improvement Elimination of waste Focus on process speed, reduce time Involve everyone Tools, Methodology, Philosophy
Six Sigma
What is Six Sigma? Six Sigma can be defined and understood at three distinct levels: Metric : 3,4 Defects Per Million Opportunities Methodology : DMAIC DFSS structured problem solving roadmap and tools Philosophy : Reduce variation in the business and make customerfocused, data driven decisions
What is σ? σ is a measure of how much variation exists in a process x x X avg x σ = SQRT [SUM(X-Xavg) 2 / (n-1)]
-7-6 -5-4 -3-2 -1 0 1 2 3 4 5 6 7 Six Sigma as a Metric Sigma = = Deviation ( Square root of variance ) Axis graduated in Sigma between + / - 1 between + / - 2 between + / - 3 between + / - 4 between + / - 5 between + / - 6 68.27 % 95.45 % 99.73 % 99.9937 % 99.999943 % 99.9999998 %
Variation LSL USL LSL USL Off-Target, Low Variation High Potential Defects Good Cp but Bad Cpk On Target, High Variation High Potential Defects Not so good Cp and Cpk LSL USL On-Target, Low Variation Low Potential Defects Good Cp and Cpk Variation reduction and process centering create processes with less potential for defects. The concept of defect reduction applies to ALL processes (not just manufacturing)
Six Sigma as a Metric 2 3 4 5 6 Process Capability PPM 308,537 66,811 6,210 233 3.4 Defects per Million Opportunities
How good is good enough? 99.9% is already VERY GOOD But what could happen at a quality level of 99.9% (i.e., 1000 ppm), in our everyday lives (about 4.6 )? 4000 wrong medical prescriptions each year More than 3000 newborns accidentally falling from the hands of nurses or doctors each year Two long or short landings at American airports each day 400 letters per hour which never arrive at their destination Is this good enough.?
What is Six Sigma? Six Sigma can be defined and understood at three distinct levels: Metric : 3,4 Defects Per Million Opportunities Methodology : DMAIC DFSS structured problem solving roadmap and tools Philosophy : Reduce variation in the business and make customerfocused, data driven decisions
What is Six Sigma? Pro Active DFSS Design for Six Sigma Re- Active DMAIC Define Measure Analyze Improve Control
DMAIC Define : Clearly defined problem, goals and metrics Measure : Accurate, reliable, consistent DATA used to make decisions. The baseline is captured, so improvement can be measured Analyze : Data analyzed to truly identify causes/barriers Improve : Develop actions to solve the problem, then prove it Control : Ensure sustained performance
DFSS Methodology & Tools DESIGN FOR SIX SIGMA Initiate, scope, and plan the project Understand customer needs and specify CTQs Develop design concepts and highlevel design Develop detailed design and control/test plan Test design and implement full-scale processes Define Measure Analyze Design Verify DELIVERABLES Team Charter CTQs High-level Design Detailed Design Pilot TOOLS Mgmt Leadership Customer Research FMEA/Errorproofing Project QFD Process Simulation Management Benchmarking Design Scorecards
What is Six Sigma? Six Sigma can be defined and understood at three distinct levels: Metric : 3,4 Defects Per Million Opportunities Methodology : DMAIC DFSS structured problem solving roadmap and tools Philosophy : Reduce variation in the business and make customerfocused, data driven decisions
Costs Six Sigma as a Philosophy Costs Internal & External Failure Costs Old Belief 4 Prevention & Appraisal Costs Old Belief High Quality = High Cost Quality Internal & External Failure Costs Prevention & Appraisal Costs New Belief High Quality = Low Cost New Belief 4 5 6 Quality
Six Sigma Tools SIPOC model Process Flow Chart Kano analysis Customer requirements analysis Critical to quality (CTQ) definitions Detailed Process Map MSA Basic statistics Check sheets Rolled Throughput Yield PPM Pareto C&E diagram 5-why Run Charts Regression analysis DOE Anova Correlation Box plot T-test Process control Hypothesis testing Affinity Process capability / MSA Control charts Statistical Process Control Visual Process Controls Poka-Yoke Preventive maintenance FMEA Brainstorming
Proces
LEAN & Six Sigma
Frequency Lean and Six Sigma Lean Six Sigma No Lean No Six Sigma Lead time Variation
Lean and Six Sigma LEAN Continuous improvement Elimination of waste Focus on process speed Involve everyone Tools, Methodology, Philosophy Six Sigma Reduce Variation DMAIC DFSS More complex situations Tools, Methodology, Philosophy
The LEAN & Six Sigma Structure
LEAN A philosophy of the possibility and desirability of constant change for the better A management system that supports continuous improvement through adherence to the PDCA improvement cycle The application of operating principles to constantly expose and eliminate waste in the process of delivering value to the customer A way of working that relies upon everyone continuously seeking to improve how they carry out their job
Elements of the LEAD Structure LEAD Organization Business Organization & Management of LEAD LEAD Management Alignment with key business goals Quality Flow Measurements LEAD Improvement Tools LEAD Leadership and Culture Leadership People Involvement Change culture
LEAD Assessment Actuant Assessment Final Score 1.1 Business and Organizational Systems 5 3.3 Process Performance 4 1.2 LEAD Management Systems 3 2 3.2 Product Quality 1 0 1.3 Functional Alignment 3.1 Process Speed 2.1 Leadership 2.3 Culture, Policy and Change Management 2.2 People
Role of HR in LEAN Six Sigma
HR role in LEAN Apply lean practices and principles toward process improvement in HR processes. Actively support (LEAD?) lean transformation throughout the company.
LEAN Six Sigma in HR processes
Lean in HR processen Wat zijn de primaire HR processen? Hoe bepaal je die? Wie is je klant? Hoe tevreden is die klant? Kijk je naar die processen vanuit de positie van die klant? Wie is je leverancier? Hoe tevreden ben je over de aan levering van informatie? Meet je de kwaliteit van de HR processen? Wat is in die processen de verhouding tussen doorlooptijd en tijd waarbij je waarde toevoegt?
Lean in HR processen Invullen van een vacature, kosten, snelheid, kwaliteit Verlaging van het verloop Verlaging ziekteverzuim Benodigde tijd voor slarisverwerking Aantal fouten per maand in salarisverwerking Aantal rapporten en documenten dat geproduceerd wordt - Is het duidelijk waarom je een rapport maakt, (5 Why) - Kan het sneller / korter / beter (VOC) Hoeveel tijd ben je kwijt doordat de input fout / onvolledig is Snelheid van de jaarlijkse beoordelings / salarisronde Aanwezigheids registratie
Makigami / Process Mapping? Makigami literally means Roll of Paper in Japanese Makigami Process Mapping is a pencil and paper tool used to analyze and visualize any business process Makigami is specifically suited for environments where products are not visible or physical [Office Environment] Makigami allows for simple tracking of system processes, Touch Time, Wait Time and information transfers Makigami helps identify non value added time within the process Makigami Creates Standards for all processes
Time Paper/screen Action Current State Makigami Process map Dept/ Desk 1 2 3 4 5 Customer Submit Request for Quote Run Product Historical Data [avg Sales Mng Receives Quote Verify Customer Information Check cust acct for Determine Size of Current Quote account Accts <5k quote off Check Customer of price sheet Affiliation Price Already quoted Run Cost Report to margins, volume by Complete Quote determine Baseline price Template Distribute Quote 16 Transfers Inside Sales Input Quote into System Complete SOX form Annual Contract Review Model Year Price Change [July 1] Total Time Ind Time Rec Time Data / Information Customer Master Screen Industrial Internal Price Sheet Cost Report and Margin Guidelines Customer Sales Inquiry Screen Quote Template SOX Form Carrier SEE COST REPORT PHONE: FAX: SEE PRINT SEE Margin SEE CUSTOMER SEE QUOTE EMAIL SCREEN Guidelines SALES INQUIRY TEMPLATE SEE SOX FORM Mode Value 5 1440 240 5 5 5 5 5 5 5 10 5 10 10 1755 1745 1495 Total Time Adding 5 5 5 5 5 5 5 5 5 5 10 5 10 10 85 75 60 Total VA Losses 0 1435 235 0 0 0 0 0 0 0 0 0 0 0 0 0 1670 1670 1435 Total Waste Margins not verified Template not Rework- customers on price sheet Need established Industrial No always up to date Need a more Problems No Standard Price Confusion on who List to call for quote not providing correct data Multiple contracts per customer 9profit levels unknown) guidelines for new products Rep PO needs prices baseline price for approval process No Realistic Lead time are not Approval Guidelines properly quoted with terms and conditions Order received before quote loaded No standard internal collaborative review of contracts process Use Excel for bothe Deactivated parts Customer does not Rec and Industrial No safegaurd for are getting No Internal Price Internal Knowledge know what is on Price sheet prices Contract [same New Product reactivated without ATP not always Not accurate cost Sheet of customers their contract not in the system templete] Discounting new costs checked high # of contracts available might not be using Validity of Data Not all parts on Lack of common difficult to search in all system Reactivation of from the customer contract are valid quoting guidelines work document functionality discontinued parts Need formal integration of purch. Confusion on Direct Customer contracts Lack of PM No automation to impact into price vs distributor not always listed on participation in Quote data No Aquition pricing [commodty inc. referral call customer accocunt Margin guidelines collection training supplier incr, etc) Sales manager Sales not aware of Recreational - more spends to much all system data room to standardize time on data availability price levels collection Recreation Lack of alignment with BEP Lead time to cust to pricicng long No uniform pricing process for prands No acquisition training provided
LEAN Six Sigma in the organization
Leiden of ondersteunen van Lean in de organisatie Beoordelingen: meten, belonen Functie profielen, definitie benodigde competenties Persoonlijke doelstellingen of team doelstellingen Stijl van leiding geven Vergader discipline
Leiden of ondersteunen van Lean in de organisatie Lean cultuur, hoe ziet die eruit, hoe groei je daar naar toe DNA van de medewerker die past in de Value Stream Organisatie Communicatie over lean: activiteiten, doelen, resultaten LEAN / SIX SIGMA training
Policy deployment
Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth GOALS (A) METRICS (C) Lead time Inventory turns Primary Working capital Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth GOALS (A) Guus Boel METRICS (C) Lead time Inventory turns Primary Working capital (Lead is bold) Guus Boel (Past Due in Red) Vision Development Form / Strategy KOPP Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth Dresco Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth Policy Deployment cascades through the organization. Level 1 MAJOR ACTIVITIES (B) $$$ RESULTS (D) KOPP Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth Dresco Primary Working Capital 20% of net sales Increase Inventory Turns to 12 20% EBITDA on sales 10% Sales Growth MAJOR ACTIVITIES (B) Level 2 $$$ RESULTS (D) Level 3 LEAD Action Plan Department/Location: Improvement Priority Title: * Management Owner: * Date: * * Review Team: * Next Review: * Environmental Situation Summary: * Timeline Core Objective: * = Original Plan x = Progress at Review FY 2006 Planned Owner Action Step / Kaizen Events Milestone Dates Sept Oct Nov Dec Jan Feb Mrt Apr May June July Aug Target Improvement Status Impact Action plan.
Organigram Ondersteunt de organisatie vorm de value stream? Hoofd Produktie Magazijn inkomende goederen Verspaning Lasserij Assemblage Magazijn Value Stream uitgaande goederen
Organigram Ondersteunt de organisatie vorm de value stream? Directeur Ontwikkeling Inkoop Sales Produktie Kwaliteit Value Stream
Organigram Ondersteunt de organisatie vorm de value stream? Directeur Value stream 1 Value stream 2 Value stream 3 Value stream 4 Values stream 5
LEAN & Six Sigma Critical Success Factors
Critical Factors to implementing a successful LEAD process Create a Vision Must have Full Leadership engagement Top Down & Bottom Up Develop a Lean Culture Expect big step improvements Understand the waste in your value streams Create a Crisis and sense of urgency 64
Introductie LEAN & Six Sigma 1 October 2009