Lt module 01 ls overview - rev b

Lean Technician Program
LeanSigma Overview

© PPL Corporation 2011

Objectives
At the conclusion of this module you will be able to:
 Define the term Lean
 Define the term Six Sigma
 Understand how LeanSigma is:
– A Philosophy
– A Methodology
– A Measure
– A Culture
 Discuss how LeanSigma is aligned with business and individual
objectives
 Discuss how Lean and Six Sigma work together to optimize
processes
 Understand some of the tools and measures
 Understand how LeanSigma makes our jobs easier!


Does this ever occur?

Question Time?

• Are long working hours Common?
• Is rework (doing the same task multiple times) a fact of life?
• Do employees spend a lot of time compiling, re-compiling, editing?
• Is there more than one way to perform a task?
• Has the company grown without changing practices?
• Have “Band-aids” been applied to areas that are broken?
• Do you have standardized procedures?
• Do you implement best practices?
• Do employees understand how their role affects the process?
• Do people communicate the right information at the right time to the right
people?


What is LeanSigma Designed to do?
 Ensure highly effective World Class processes that are
cost competitive and consistent with customers needs
 Implement and Sustain change initiatives to improve
performance
 Lead initiatives to reduce operating costs to industry
leading levels
 Develop and implement blueprint for a World Class
LeanSigma Enterprise
– common processes, measurements and systems
– common training and skill requirements


World Class Enterprise

85% 15%

Value Typical Value-Adding**
Non Value Adding (NVA) Adding ratio

87.5% 12.5%
If focus is only on
improving Value-Adding
NVA VA operations

50% 50%
Companies decrease lead time
rapidly by reducing non value-
NVA VA adding activity!

Lead Time

Learning Philosophy

People tend to support what they help
create;

Tell Me and I Will Forget
Show Me and I Will Remember
Involve Me and I Will Understand


There is no I in Team?
 The vision should be an integrated business system
that links people and processes across the entire
value stream ( Series of activities and materials )
“Improvement in Isolation is Not Effective”

Sales &
Engineering SCM Shop Floor Production
Marketing

Quality Information Human
Suppliers
Systems Systems Resources

CUSTOMER

SERVICE


Lean Thinking

 TransactionalSigma Lean Thinking means challenging the
existing administrative processes and practices that:
– Are no longer applicable in a Lean Environment, and/or
– Support business needs that no longer exist, and/or
– Are complex and require simplification.

 The following slides list typical questions that should be
asked to generate ideas for LeanSigma Transactional
Teams.


LeanSigma Thinking

 Sales, Marketing, Order processing
– What is the value to the organization in having complete and accurate
information in the quoting process?
– What is the cost of selling products and services that do not fit well in the
production value stream?
– How can you reduce the number of order entry transactions?
– Can you eliminate manual interfaces by some means of electronic data
interchange methodology?
– What would be the effect of reducing the skills required to perform order
processing using work simplification and standardization?


LeanSigma Thinking

 Human Resources
– What would be the benefit of reducing the effort associated with payroll-related
activities such as processing and correcting time cards?
– What would be the benefit to the organization of simpler, more frequent
employee reviews focused on value stream performance?
– How can compensation practices be changed to reinforce lean behaviors such as
teamwork, standardized work, and cross training?
– What would be the impact to the organization on employee retention of improving
the screening, hiring, and orienting process?


LeanSigma Thinking

 Supply Chain
– Are there better ways to control inventory that require less effort while providing
the desired results? Using Visual Management?
– How you reduce inventory transactions? What will be the impact of reduced
inventory transactions on the quality of data and information?
– What activities will change with the incorporation of vendor managed inventories?
– What is the impact on the value stream if you eliminate purchase orders?
– How can you use the newly available time of purchasing and inventory
management personnel to improve supplier performance?


LeanSigma Thinking

 Accounting
– What is the time and effort required to perform month-end closing activities?
– How will more real time financial and accounting information benefit the decision
making process and the organization in general?
– What changes are required in the accounting process to support a lean
transformation of manufacturing?
– What would be the impact to the organization if the accounting function reduced
its portion of the order-to-cash process?


What is Lean?

 Lean is the elimination of anything not absolutely required
to deliver a quality product or service, on time, to our
customers.
 Lean focuses on improving process flow.
 Lean is a means of driving process standardization.
 Lean drives work at the pull of the customer.


Lean Focuses on Waste
 All Waste degrades
performance
 There are 8 Primary Sources of
Waste:
− Defects Sources of waste can be:
− Over production
− Waiting
− Not Using Talent • Identified
− Transportation
− Inventory
• Quantified and
− Motion prioritized
− Extra Processing
• Eliminated or
greatly reduced
 Lean eliminates waste,
improving process Speed


History of Lean

 Taiichi Ohno of Toyota was the primary architect
 Started with a factory/manufacturing orientation
 Developed to systematically attack the eight types of
muda (waste)
 Tools and methods evolved by trial and error over
decades
 The result was the Toyota production system; the basis of
all lean systems


What is Six Sigma?

Six Sigma is a philosophy for managing process
improvement.
Six Sigma is a means of continuously improving to meet
customer needs.
Six Sigma is a method for reducing process variation
and improving process stability.
Six Sigma is a measurement of defects and variation.


Six Sigma Focuses on Variation
 All variation degrades
performance Sources of variation can be:
 Variation buffers include:
– Inventory
– Time
– Extra Capacity • Identified
 Not all variation is bad • Quantified and
– New products
– New services prioritized
 Six Sigma focuses on
– Variation due to process
• Eliminated or
– Variation due to flow greatly reduced
 Six Sigma improves Stability
and Accuracy


History of Six Sigma
 Originated in Motorola in the mid ’80’s
– Lots of tools, but no method for solving problems
 Six Sigma Black Belt methodology began in late 80’s/early 90’s.
 Many companies have embraced Six Sigma:
– Allied Signal – 1994
– The Stanley Works – 2004
– Air Products – Prior to 2000
– GE – 1996
– Bank of America - 2002
 Strategically driven program with top down projects that yield high
Return on Investment
 Follows LeanSigma roadmap to identify problem’s root causes
and implement improvements


Sigma: The Measure
LeanSigma the Methodology, uses Sigma the Measure to
Quantify Process Performance


Sigma: The Measure
Cost of Quality – total costs
of quality issues to
products, process,
Yield DPMO COQ Sigma opportunities and customers

99.9997% 3.4 <10% 6 World Class

99.976% 233 10-15% 5

99.4% 6,210 15-20% 4 Industry
Average
93% 66,807 20-30% 3

65% 308,537 30-40% 2 Non Competitive

50% 500,000 >40% 1

Source: Journal for Quality and Participation, Strategy and Planning Analysis

What is 15 - 20% of Revenue worth to you?

Understanding LeanSigma Levels

Say you played 100 rounds of golf per year…
what would a Six Sigma be in your game?

2 sigma - you'd miss 6 putts per round

3 sigma - you'd miss 1 putt per round

4 sigma - you'd miss 1 putt every 9 rounds

5 sigma - you'd miss 1 putt every 2.33 years

6 sigma - you'd miss 1 putt every 163 years


What Does LeanSigma Mean In Your Daily Life?

99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)

Postal System Postal System
20,000 Lost Articles of Mail / Hr 7 Lost Articles of Mail / Hr

Airline System Airline System
Two Short-Long Landings / Day 1 Short-Long every 5 Years

Medical Profession Medical Profession
200,000 Wrong Drug 68 Wrong Drug
Prescriptions / Week Prescriptions / Week


What Does LeanSigma Mean Your Daily Life?

PPM
Prescription Writing
Tax Advice
Restaurant Bills
1,000,000 Payroll Processing
100,000
10,000
Baggage Handling

1,000
100
10
Airline
1 Safety Rate

1 2 3 4 5 6 7

Sigma Level


Lean Removes Waste
Six Sigma Optimizes

Removes Waste

Inputs Process Outputs

Removes Variation


Why Six Sigma + Lean?

 Traditional Six Sigma deals with Variation: “How
can we eliminate process variation and defects?”
 Lean strategies look at Speed: “How can we do
the work faster and more efficiently?”
 Not all projects need all the tools.
Cost

Triple
Constraint
Delivery
Quality

Why Lean + Six Sigma?
Lean Six Sigma
• Waste Elimination • Variation Reduction
• Standard Work • Scrap / Rework Elimination
• Flow • Process Optimization
• Customer PULL • Process Control

STABILITY &
SPEED ACCURACY

LEAN + SIX SIGMA = A POWERFUL COMBINATION

LeanSigma Benefits
Our Company:
 Financial savings
 Better cash flow
 Increased revenue
 Waste, defect and variation
reduction
 Improved efficiency
 Higher skilled workforce
 Commonality – tools, language
Our Customers:
 Requirements consistently met
 Higher quality
 Consistent on time delivery
 Higher satisfaction


LeanSigma is…
….A Philosophy that
– Focuses on continuous organizational improvement
– Institutes data driven decision making
– Covers the whole business value stream
– Aligns projects with strategy
– Drives big results
and
….A Methodology that
– Is based on Lean and Six Sigma tools
– Provides a problem solving roadmap
– Uses a set of data driven tools to measure process performance and
identify critical process drivers


LeanSigma is….

…a simple, unique, proven and lasting approach
for improving our business performance based on:

 Alignment of the customer, strategy, processes and people
 Big, measurable business results
 Selective but broad deployment of advanced quality and
statistical tools


LeanSigma Focuses on Processes

“85% of the reasons for failure to meet customer
requirements are related to deficiencies in systems
and processes… rather than the employee. The role
of management is to change the process rather
than badgering individuals to do better.”
- W. Edwards Deming


Changing The Decision
Making Processes

Decision Making Types of Problems
Path You Will Normally Solve

1. Intuition, gut feel, I think… Simple

2. We have data and look at it

3. We make graphs / charts of the data

4. We use advanced statistical tools
to evaluate the data Complex

How Many Times Have Your Heard This?
“I Think The Problem Is…”

Roles and Responsibilities

Projects /
Team Direction

Black Belt Green Belt Support

Strategy / Champion
Annual Operating
Lean Techs
Plan Team Members

Reporting
Master Black Belt
Executive Team


The Roadmap

Define Measure Analyze Improve Control
 Initiate the  Understand the  Analyze Data to  Verify Critical  Finalize the
Project Process Prioritize Key Inputs Using Control System
Input Variables Planned
 Define the  Evaluate Risks  Verify Long
Experiments
Process on Process  Identify Waste Term Capability
Inputs  Design
 Determine
Improvements
Customer  Develop and
Requirements Evaluate  Pilot New
Measurement Process
 Define Key
Systems  Lean Tool
Process Output
Variables  Measure Applied
Current
Process
Performance
3 - 4 weeks 4 – 6 weeks On-going

Using Lean Tools
Within the LeanSigma Roadmap

 Cell Design
 Kanban / Pull
 Mistake Proofing
 Baseline analysis
 Improvement Events
 Process observation
 5S Improvement
 Value Stream Map

Define Measure Analyze Improve Control

Charter  Spaghetti diagrams  Performance to TAKT
 Time Value Chart  Standard Work
Purpose
 TAKT time / Cycle time


Summary

 Six Sigma is:
– An initiative used to proliferate process improvement in any organization
– A problem solving approach based on following the DMAIC roadmap that
focuses on reducing variation
– A measure of defects

 Lean is:
– A set of tools used to reduce waste in a process, thus increasing process velocity

 Six Sigma focuses on variation, Lean on speed

Lean and Sigma together, form LeanSigma and enable us to drive
breakthrough improvements in our organizations.


Revision History

Rev Date Course Changes Name
A 11/16/2011 Lean Technician First Draft TJ Barron
B 1/26/2012 Lean Technician Review with TJ Barron
Rachel H.


Lt module 01 ls overview - rev b

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