First steps for improving the performance of companies using Lean Six Sigma methodology, starting with manufacturing and supply chain departments (partial presentation).

1. Improving the organization's
performance by using Lean Six
Sigma methodology
Rodica Ghinea
July 2013

2. when talking about
Performance = evaluating the financial performance
July 2013
Performance = a comprehensive approach including both
financial and non-financial aspects
In the late 1950’s
currentlycurrently

3. LEAN
Lean Manufacturing =
Toyota Production
System(TPS)
improving the processes by
eliminating waste
Six Sigma
Six Sigma- Motorola
set of tools and strategies for
improving the quality
LEAN- Six Sigma
a combination of the two methodologies for improving the
performance of a process / company through systematic
application of tools, strategies and politics for continuous
improvement
+
+
July 2013

4. To build a company's
Development Plan
started with the
company
processes
To determine the
structure of the
business (product
distribution)
July 2013
In order

5. For that:
Know the
business
July 2013
Analyze current processes in
Supply Chain
Analyze current processes in
manufacturing
Build the actual
VSM
Build the future
VSM
Improve
services

6. And that means:
I. Build VSM
II. Establish the activities
that bring add value
Kanban
building
map
value
Remove
waste
III. Through the stock
management
Usework
standard
SupplyChain
July 2013

7. Made an analysis of business structure
A = high runner = 73 products bring 80 % turnover
B = repeater = 130 products bring 19% of turnover
C= stranger = 66 products bring 2 % of turnover
Tool used: Paretto Diagram
July 2013
0
20
40
60
80
100
120
140
A B C
73
130
66
number products
1761066 RON
7511953 RON
76581 RON

8. Which helped to make the decisions:
July 2013
Automatizations
Lean Cells
Customized
products
For A products
(high runners)
For B products
(repeaters)
For C products
( strangers)

9. I. Build VSM
July 2013
Performance before implementation:
7 activities;
OFR = 90%;
MTPT = 140 days;
OEE = 65%
LT = 25 days
Efficiency = 65%
Tact time = 5.7 sec

10. Based on data collected has been built the
future status for VSM
July 2013
FUTURE STATUS

11. After implementation of the new
VSM expect to:
July 2013
reduce the number of the activities to 4;
with an OFR = 95%;
and rotate the material stock at each 100 days (MTPT = 100 days);
with a rate of using the equipments of 85 % ( OEE)
and delivering the A products in 5 days (LT = 5 days)

12. To obtain this performance needs to implement
the VSM- action plan
July 2013
Action Product type responsible data
Implement the cells layout B HS mar.13
Kanban implementation inter-
operational A, B VA dec.13
Implementation Kanban finish
product A, B DC ian.14
Implementation Kanban-
secondary operations
A, B
SN sep.13
Implement work standard for each
product family
A, B
BB nov.13
Design and implement Kanban for
primary parts
A, B
CB mar.14
Standardise the box for parts A, B
GH aug.13
Implement a conveyor between
packaging and verification B GI may.14

13. “U” CELL
July 2013
price
New layout 300 euro/pcs

14. II. Status of waste (MUDA)
July 2013
Work time: 8 h
Production time : 2.75 h
Defects or purchasing
activities : 4.25 hmanufacturing
defects
purchasing
waste distribution (hour)
waste
waste
adding value
2,75
1,25
3
About 70% of work time is lost.

15. To increase the value added
need to be implemented the
following activities:
July 2013
Activity Price Responsible status
Design and
implement a
new assemble
table
600 eur BU Manager

Implement
standard work
0 Engineer

Kanban
implementation
0 Engineer


16. July 2013
75
150
131
Productivity after implementation
manufacturing
through Kanban
implementation
through work standard
After implementation the
productivy will increase as:

17. July 2013
1. Increase productivity
2. OFR = 92%
3. OEE = 85%
4. Decrease stock by 20%
5. Increase workplace
ergonomics
6. Released a surface of
300 square meters
152
240
300
0
50
100
150
200
250
300
350
before
implementation
work standard
after 1 month after 6 monts
Evolution productivity
Series1
Linear (Series1)
After implementation :

18. Red- crises situation- not
enough time to bring in
time !
Yellow - warning signal- a
good moment for ordering
Green – enough parts for
production
Code of colour:
July 2013
Kanban: Card that contains all identifiers landmark for an article/ sub-
assembly / finished product, such as: code, quantity, position, destination
provider.
III. Kanban
delay in
deliveries

19. Model: Design Kanban
July 2013
III. Kanban
monthly
consumption min max box type A box type B box type C
anti-drill plate 13206 4052 10129 10
2.5" SH cap 3VL 1935 484 1209 2
2.5" SH cap5VL 7163 1791 4477 4
2.5" SH cap 5BA 659 165 412 1
2.5" SH cap 5E 863 216 539 1
2.5" SH cap 5OV 3046 762 1904 4
3" SH cap 3VL 1935 484 1209 2
3" SH cap 5VL 3112 778 1945 4
3" SH cap 5BA 659 165 412 1
3" SH cap 5E 863 216 539 1
3" SH cap 5OV 762 762 1904 4 4

20. III. Supply Chain
To understand the situation, it has used another tool-
the Ishikawa Diagram:
Iulie 2013

21. July 2013
III. Supply Chain
22.7 55.3
17.3 44.7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
hours %
Supply Chain structure
MUDA
value added
The activities developed into the Supply Chain Department
have been analysed. Around 44.7% of weekly work time it
is lost.

22. July 2013
III. Supply Chain
To improve the performance of department has been
established an action plan to improve purchasing services
Action
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
implemen tthe matrix communication with clients
and / or suppliers
establish responsible for purchasing on group
materials
make decision buy/not buy in max 48 h
build a new and simplified map of processes for
supply chain
Status
group documents by category
standard implementation for organizing shelves
processing orders based on FIFO principle
implementing standardized document for purchasing
indirect materials and for services

23. July 2013
3114
1118
3135
1113 998
12117
2118
5086
1126
88
4543
1737
3024
30
8
635
985
0
0
0
5000
10000
15000
20000
< 3 months (3:6]months (6:12]months (12:24]months > 24 months
(*1000)RON
Stock Distribution
merch.
selling
raw mat.
indirect
materials
components
packaging
Has developed an analysis to understand the
distribution of stock:

24. July 2013
1. Implement an working standard for procurement process
2. Introduce the order into the ERP operating system-max 48h
3. appointment responsible for articles category purchasing
4. Construction ERP interface easily accessible without risk
Strategic actions:
1. Reduce the variant of type packaging
2. Implementing Kanban to the supplier for components and raw materials
3. identifying new suppliers in Romania / Europe
Based on the analysis has been established the
action plan

25. Results after implementation
July 2013
5048.8
882.6
2119
0 0
1892.8
723.8
1260
0 30.0
2500.0
5000.0
7500.0
(x1000)RON
stock trend after implementation
merch.
selling
raw mat.
indirect materials
components
packaging
0
5000
10000
15000
20000
25000 Stock trend after implementation
before
after

26. Conclusions
July 2013
KPI before trend after
OFR (%) 90 95
MTPT
(days)
140 100
OEE (%) 65 95
Stoc (%) 45 15
LT (days) 25 5
Performance
Company
Make a
plan and
schedule
Implement
Check the
results
Take new
actions

27. For:
- questions
- helping to save your company
- helping to develop your company/department
- guidance for developing performance project
write to me on : ghinearodica@yahoo.com
July 2013
Some slides were removed from the initial presentation.

28. Thank You!
July 2013