Six Sigma Methodologies. Process Improvement

Transcription

1 Six Sigma Methodologies and Process Improvement Presented by Lenez Hendrix, CMDSM, EMCM CMDSM, EMCM, Certified Lean Six Sigma Black Belt Xerox Corporation January 23,

2 What is Six Sigma: It s a quality level measurement Six Sigma & Lean 3.4 defects per million opportunities (DPMO) It s a process DMAIC It s a critical thinking, disciplined approach to process improvement After Before Reduce Variation 2

3 Six Sigma & Lean What is Six Sigma: Sigma: Sigma is a measurement of dispersion, of variation. It describes how far data deviates from the average. It s used to describe how good or bad the performance of a process is. Basically, Sigma is a measurement of how many mistakes a process makes in delivering it s outputs. Six is the level we are shooting for. Sigma levels range from 1-6, with six being the highest. It is used because it permits a valid comparison of dissimilar things with a common metric 3

4 Six Sigma & Lean 3.8σ (99%) = 10,000 defects per million opportunities (DPMO) EXAMPLES: 2 abnormal airports/day 5,000 incorrect surgical operations/week 200,000 drug prescriptions wrongly filled/year 6 σ (99.99%) = 3.4 defects per million opportunities (DPMO) EXAMPLES: 1 abnormal landing every 5 years 1.7 incorrect operations/week 68 drug prescriptions wrongly filled/year 4

5 Six Sigma & Lean What is Lean Six Sigma: Lean: means speed. It is concerned with increasing the velocity of a product or service through an internal value-chain by cutting waste. The more wasted time and effort that can be eliminated or reduced in the process, the faster it can turn the product or service it s designed to produce. The Lean metric is process cycle time 5

6 Six Sigma & Lean Two Types of Waste: Systems Waste: Business may require you to perform certain functions-for internal or external reasons. Task is required by law or regulation. Pure Waste: Non-value added activities that can be eliminated Transportation Inventory Motion Waiting Overproduction Over processing Defects/Rework 6

7 Six Sigma & Lean Six Sigma Lean After Reduce Variation After Before M ean S hift Before Six Sigma focuses primarily on process effectiveness understanding and reducing variation reducing and eliminating defects. improving performance on Customer CTQs (Critical to Quality) Quality Accuracy Zero Defects Reduced Variation Lean focuses on process efficiency identifying non value added steps and reducing waste reducing bottlenecks Increase speed and cycle time Quantity Timeliness/Speed Zero Bottlenecks Reduced Non-Value Added Steps 7

8 What is Six Sigma: Six Sigma & Lean Two industry-proven methods to improve processes Six Sigma: reduce defects to close to zero on what the customer values and Lean: eliminate waste, simplify, and increase speed --focus on doing what the customer values Integrated together, these two concepts provide a powerful way of improving the value we deliver to our customers and simplifying the way we do business with them. 8

9 DEFINE - Way things are today What is DMAIC? MEASURE - Gather information critical to the process ANALYZE - Evaluate the information gathered IMPROVE - Better way to do things CONTROL - Maintain the change and see the results 9

10 Improvement Process Road Map Define Measure Analyze Improve Control Activities Identify Problem Complete Charter Develop SIPOC Map Map Business Process Map Value Stream Gather Voice of the Customer & Voice of the Business Develop CCR s & CBR s Finalize Project Focus Identify Key Input, Process and Output Metrics Develop Operational Definitions Develop Data Collection Plan Validate Measurement System Collect Baseline Data Determine Process Performance/Capability Validate Business Opportunity Propose Critical X s Prioritize Critical X s Conduct Root Cause Analysis on Critical X s Validate Critical X s Estimate the Impact of Each X on Y Quantify the Opportunity Prioritize Root Causes Develop Potential Solutions Develop Evaluation Criteria & Select Best Solutions Evaluate Solution for Risk Optimize Solution Develop To-Be Process Map(s) and High-Level Implementation Plan Develop Pilot Plan & Pilot Solution Develop SOP s, Training Plan & Process Control System Implement Process Changes and Controls Monitor & Stabilize Process Transition Project to Process Owner Identify Project Replication Opportunities Calculate Financial Benefits Tools Pareto Charts Project Selection Tools Project Management Value Stream Map Various Financial Analysis Charter Form Stakeholder Analysis Communication Plan SIPOC Map High-Level Process Map Non-Value Added Analysis VOC and Kano Analysis Quality Function Deployment (QFD) RACI Charts SIPOC Map Operational Definitions Data Collection Plan Statistical Sampling Measurement System Analysis (MSA), Gage R&R Constraint Identification Setup Reduction Work Control Systems Kaizen Control Charts Process Capability, Cp & Cpk Pareto Charts C&E Matrix C&E/Fishbone Diagrams Brainstorming Detailed As-Is Process Maps Basic Statistical Tools Non Value-Added Analysis Confidence Intervals Hypothesis Testing Non-Parametric FMEA Box Plots Interaction Plots Multi-Vary Charts Chi-Square Analysis Simple & Multiple Regression Logistic Regression One-way and Two-way ANOVA ANOM Box-Cox transformation Brainstorming Benchmarking Solution Selection Matrix Process Improvement Techniques Process Balancing Process Flow Improvement Queuing Theory Design of Experiments (DOE) Replenishment Pull Poka-Yoke FMEA To-Be Process Maps Piloting and Simulation Response Surface Methodology Control Charts Standard Operating Procedures (SOP s) Training Plan Communication Plan Implementation Plan Visual Process Control Process Control Plans Project Commissioning Project Replication Plan-Do-Check-Act Cycle 10

11 Can you list some Defects that may be found in the Mail and Distribution Industry? 11

12 Six Sigma & Lean WHAT MAIL SERVICES ITEMS COULD BE DEFECTS? Equipment inefficiencies Processes that require extra labor and time USPS Postage mistakes Address lists with inaccurate addresses Shipping at a higher level of service than needed Shipping to an inaccurate address Multiple-handling of mail or freight Not consolidating items going to the same location Sending everything First full-postage, Priority Mail etc. 12

13 13

14 Value Add Time Analysis 14

15 Value Add Time Analysis Begins With 1. An understanding of where the selected work process begins and ends Your Process Your Supplier(s) INPUT OUTPUT Your CUSTOMER(S) 2. A good map of the process that includes: Process steps Transportation Storage Delay(s) Inspection 15

16 Value Add Time Analysis Steps 1. Identify the boundaries of the selected process 2. Develop a process map of the process 3. Determine the cycle time 4. Value add analysis 5. Improve the process 6. Recalculate the cycle time 16

17 1. Identify Process Boundaries SUPPLIER(S) INPUT(S) PROCESS OUTPUT(S) CUSTOMER(S) requirements CAM Acct Team Customer (notification) Constant Common Sense Factors Must be done Noise Uncontrollable Too costly to control X Key Variables Controllable factors Can be done Process Name Product/Service delivered to the customer External Customer: Process Owner: Output Characteristics: Critical to Quality (CTQ) Critical to Delivery (CTD) Input: f(x) Measures Voice of the Customer Voice of the Business Process: f(x) Measures Voice of the Customer Voice of the Business Output (Results): Y Measures Voice of the Customer Voice of the Business Voice of the Customer (VOC): Customer requirements in terms of Quality measures, Cost measures, and/or Delivery/Speed measures Voice of the Business (VOB): Business requirements in terms of Quality Measures, Cost measures, and]/or Delivery/Speed measures Process start Process end INPUT(S) High Level Process Step High Level Process Step High Level Process Step High Level Process Step OUTPUT(S) 17

18 2. Develop the Process Map The process map should contain enough detail to enable effective analysis: It should illustrate both the work flow and the organizational interaction It should use a common language (symbology) which is understood by everyone It should capture all multiple paths, decisions, and rework loops It should contain adequate detail Too much detail is incomprehensible Too little detail has no analytical value Focus on the what s not the how s START (connector to the next step - typically on the next page) A INPUT TASK: what you do (an activity or a step in the process) Decision? yes Flow Chart Symbols OUTPUT (connector to another process) no (for portrait flow charts yes flows down; for landscape flow charts yes flows to the right) (lines with arrowheads connect icons to indicate process direction on) 1 END 2003 Xerox Corporation 18

19 Process Map Example A B C Phone call from end user Wait for pick-up Give job to print operator Check for paper stock Schedule job for delivery DC Associate picks up job Wait for operator to look at job ticket Log job into Equitrac Job waits to be delivered Is there a job ticket? N - 2% Y - 98% DC Associate completes job ticket Check due time Run job Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Verify info on job ticket Print operator queues job Take to QC Table Completed job returned to end user Is job ticket complete? Bring job to Doc Ctr N - 5% Call for more complete info Y - 95% Process capable to N - 5% Call to negotiate complete job on new time time? Y - 95% Schedule job Wait for QC Perform QC; fill out QC slip Job delivered Timestamp job ticket "in" A Job waits in queue Is QC OK? N - 1% Is there time to re-run job? Y - 99% Y - 100% N - 0% Call to negotiate new time B C 19

20 3. Determine the Cycle Time 1. Following ONE unit (e.g., a single piece of mail), document the time (seconds or minutes) the unit spends at each step. 2. Calculate total (preimprovement) cycle time. 20

21 Cycle Time Example A B C Phone call from end user Wait for pick-up 10 min Give job to print operator Check for paper stock Schedule job for delivery DC Associate picks up job 2 min Wait for operator to look at job ticket 5 min Log job into Equitrac Job waits to be delivered 20 min Job Ticket: - walk-in Is there a job ticket? Verify info on job ticket Is job ticket complete? Bring job to Doc Ctr 2 min N - 2% Y - 98% DC Associate completes job ticket N - 5% Call for more complete info Y - 95% Check due time Print operator queues job Process capable to N - 5% Call to negotiate new time complete job on time? Y - 95% Schedule job Run job 120 min Take to QC Table Wait for QC 60 min Perform QC; fill out QC slip 10 min Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min Job delivered Timestamp job ticket "in" A Job waits in queue 15 min Is QC OK? N - 1% Is there time to re-run job? Y - 99% Y - 100% N - 0% Call to negotiate new time B C 21

22 4. Value Add Analysis The objective of Value Add analysis is to: Eliminate the hidden costs that do not add value to the customer Reduce unnecessary process complexity, and thus errors Reduce the process cycle time Increase capacity by better utilizing resources 22

23 Value Add vs. Non-Value Add The analysis of identifying steps in a process for which the customer is willing to pay, and those which the customer is unwilling to pay. All processes are made up of three types of activities: Customer Value Add (CVA) Business Value Add (BVA) Non-Value Add (NVA) 23

24 Definitions: CVA, BVA, NVA Customer Value Add (CVA) Any step in a process that is essential to deliver a service to the customer Must be performed to meet customer needs Adds form or feature to the service Enhances service quality, enables on time or more competitive delivery, or has a positive impact on price competition Those tasks which the customer would be willing to pay for if he/she knew you were doing it (i.e., has value to the customer) Tasks should be optimized Business Value Add (BVA) Activities that allow greater effectiveness or efficiency in a process Activities that are required by the business but add no real value from a customer standpoint Questions: Does it reduce financial risk? Does it support financial reporting requirements? Would the process break down if this task were removed? Is it required by law or regulation? Business Value Add tasks should be questioned and, where possible, minimized or eliminated Non-Value Add (NVA) Activities that are not value add or Business Value Add Activities which are not required to meet or exceed customer needs and are not required by the business Non-Value Add activities add waste to the process Non-Value Add (NVA) tasks typically include: Handling Inspecting Transporting Moving Counting Delaying Storing All rework loops Multiple signatures Non-Value Add activities should be eliminated 24

25 Non-Value Add Time Examples Examples of non-value add tasks include: Handling paperwork Counting, issuing, retrieving Waiting Proofreading Inspecting and checking Sorting work Logging information Checking calculations Reviewing and approving Moving and setting-up Monitoring work Any type of rework Transportation Inventory Motion Waiting Overproduction Over processing Defects/Rework 25

26 Classify CVA, BVA, NVA Steps For each activity, step, or task in the process, classify it as: Customer Value Add Business Value Add Non-Value Add Contribute to Customer Needs? Yes No Activity/Task Necessary to Produce Output? No Contribute to the Business Owners? Yes Yes No Customer Value Add Business Value Add Non Value Add 26

27 Process Cycle Efficiency (PCE) PCE is a measure of the relative efficiency in a process - it represents the percentage of value add time of a product down the critical path. It is calculated using: Process Cycle Efficiency= Customer Value Add Time Process Cycle Time PCE = Process Cycle Efficiency CVA = Customer Value Add (the amount of time value is actually being added to a product the time a customer is willing to pay for) PCT = CVA + BVA + NVA PCE is the performance indicator of how efficiently the process is converting work-in-process into exits 27

28 Process Cycle Efficiency (PCE) World-Class Process Cycle Efficiency Benchmarks * High Application Creative/Cognitive Processes Transactional Processes Low-End PCE Goal 5% 10% High-End PCE Goal (World-Class PCE) 25% 50% Batch Transfer Assembly Continuous/One Piece Flow Assembly 15% 30% 35% 80% Rules of Thumb: If current PCE is << Low End Target, multiply current PCE by 10 (one order of magnitude improvement) for use as Target to be conservative. If current PCE is < Low End Target, use Low End as Target PCE If current PCE or > Low End Target, use High End as Target PCE * Based on experience with over 100 companies 28

29 Value Add Analysis Example Phone call from end user Wait for pick-up 10 min DC Associate picks up job 2 min A Give job to print operator Wait for operator to look at job ticket 5 min B Check for paper stock Log job into Equitrac C Schedule job for delivery Job waits to be delivered 20 min Total (pre-improvement) Cycle Time = 135 min = 257 min. PCE (Process Cycle Efficiency) = 52.5% Job Ticket: - walk-in Is there a job ticket? Verify info on job ticket Is job ticket complete? Bring job to Doc Ctr 2 min N - 2% Y - 98% DC Associate completes job ticket N - 5% Y - 95% Call for more complete info Check due time Print operator queues job Process capable to complete job on time? Schedule job N - 5% Y - 95% Call to negotiate new time Run job 120 min Take to QC Table Wait for QC 60 min Perform QC; fill out QC slip 10 min Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min Job delivered Timestamp job ticket "in" A Job waits in queue 15 min B Is QC OK? C N - 1% Y - 99% Is there time to re-run job? Y - 100% N - 0% Call to negotiate new time 29

30 5. Improve the Process Cycle Time Reduction Non-Value Add Business Value Add Customer Value Added Non-Essential (Waste) 1. Eliminate 2. Reduce 3. Improve (typically 80+% of the Cycle Time reduction opportunity) Essential Brainstorm ways to: Reduce Cycle Time By Eliminating Waste! 30

31 Process Improvement Example A B Phone call from end user DC Associate picks up job and time stamps 2 min Give job to print operator Log job into Equitrac Is there a job ticket? N - 2% DC Associate completes job ticket Print operator queues job Run job 120 min Job Ticket: - walk-in Verify info on job ticket Y - 98% Process capable to complete job on time? N - 5% Y - 95% Call to negotiate new time Perform QC; fill out QC slip 10 min Y - 100% Is job ticket complete? Walk job to Doc Ctr 2 min N - 5% Y - 95% Call for more complete info Job waits in queue 15 min Check for paper stock Is QC OK? Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' N - 1% Y - 99% Is there time to re-run job? N - 0% Call to negotiate new time A B Completed job returned to end user 2 min Job delivered Total (post-improvement) Cycle Time = 135 min = 157 min. PCE (Process Cycle Efficiency) = 86.0% 31

32 6. Recalculate the Cycle Time 1. Calculate total (post-improvement) process cycle time of the newly improved process. 2. Calculate % improvement = 1- Post-improvement Cycle Time Pre-improvement Cycle Time % Cycle Time Improvement = 1- (157 min. / 257 min.) = 39% 32

33 33

34 Layout Improvement 34

35 Layout Improvement 1. Document the process 2. Measure the process 3. Analyze the process for improvement 4. Apply process flow improvement techniques 5. Standardize Operations 35

36 1. Document the Process A. SIPOC (Supplier-Input-Process-Output-Customer) B. Process Map C. Spaghetti Diagram 36

37 21'-0" Spaghetti Diagram Example 3'-2' 3'-2' Admin 6'-6' Lead 6'-6' Workstation 6'-6' Workstation 3'-2' 3'-2' 3'-2' 3'-2' 3'-2' 3'-1'6" 3'-1'6" 3'-1' 5'-3' 58'-8" Walk Through DC 40 3'-3' 3'-0" Hub Table 6'-3' Shrink Wrap 10'4"-3'10" NOTE: Each color is a different path depending on job type 3'-1'6" 4'-0" Folder 13"-13" pole 3'-2' 4'-2' 4'-2' 4'-2' 4'-2' 5'-2' 4'-2' Cutter 3'9"-2'10" Drill 3'-3'6" 37 48'-3" 12'-4" Padder 3'-1' Padder 3'-1' 20'-0" 2'-0" 9'-0" 6'-0" 6'-0" 6'-0" 6'-0" 2'-6" 2'-0" Space Folder 8'-0" 13'-6" 6'-0" 6'-0" 6'-0" 6'-0" 3'-0" 10'-2'6" DT ' 6"-3'8" 14'-6 5/8" 1'-6" 1'-6" DT ' 6"-3'8" 2'-0" 4'-2' 5'-2' NEPS Rat Traps Power Cables Ship Pal

38 2. Measure the Process Conduct a time study of the process steps (Value Add Time Analysis) 38

39 Process Time Study Observation Sheet WORKCENTER TIME OBSERVATION SHEET PROJECT NAME WORKCENTER PRODUCT PROCESSED DATE Process Step 1 Process Step 2 PROCESS STEP BEST REPEATABLE <-- Clock Time COMMENTS <-- Elapsed Time Process Step 3 Process Step 4 Process Step 5 39

40 Process Time Study Example A B C Phone call from end user Wait for pick-up 10 min Give job to print operator Check for paper stock Schedule job for delivery DC Associate picks up job 2 min Wait for operator to look at job ticket 5 min Log job into Equitrac Job waits to be delivered 20 min Job Ticket: - walk-in Is there a job ticket? Verify info on job ticket Is job ticket complete? Bring job to Doc Ctr 2 min N - 2% Y - 98% N - 5% Y - 95% DC Associate completes job ticket Call for more complete info Check due time Print operator queues job Process capable to N - 5% Call to negotiate new time complete job on time? Y - 95% Schedule job Run job 120 min Take to QC Table Wait for QC 60 min Perform QC; fill out QC slip 10 min Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min Job delivered Timestamp job ticket "in" A Job waits in queue 15 min Is QC OK? N - 1% Is there time to re-run job? Y - 99% Y - 100% N - 0% Call to negotiate new time B C 40

41 3. Analyze the Process A. Identify the bottleneck (Task Time Chart) B. Identify Non Value Added tasks (Value Add Time Analysis) C. Assess worker flexibility (Personnel Skills Assessment) 41

42 Job Queue Process A. Bottleneck Example A B C Phone call from end user Wait for pick-up 10 min Give job to print operator Check for paper stock Schedule job for delivery DC Associate picks up job 2 min Wait for operator to look at job ticket 5 min Log job into Equitrac Job waits to be delivered 20 min Job Ticket: - walk-in Is there a job ticket? Verify info on job ticket Is job ticket complete? Bring job to Doc Ctr 2 min N - 2% Y - 98% N - 5% Y - 95% DC Associate completes job ticket Call for more complete info Check due time Print operator queues job Process capable to complete job on time? Schedule job N - 5% Y - 95% Call to negotiate new time Run job 120 min Take to QC Table Wait for QC 60 min Perform QC; fill out QC slip 10 min Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min Job delivered Bottleneck: The process step that inserts the MOST delay in the process. Timestamp job ticket "in" A Job waits in queue 15 min Is QC OK? N - 1% Y - 99% Is there time to re-run job? Y - 100% N - 0% Call to negotiate new time B C 42

43 B. Non-Value Add Example Phone call from end user Wait for pick-up 10 min A Give job to print operator B Check for paper stock C Schedule job for delivery Total (pre-improvement) Cycle Time = 135 min = 257 min. PCE (Process Cycle Efficiency) = 52.5% DC Associate picks up job 2 min Wait for operator to look at job ticket 5 min Log job into Equitrac Job waits to be delivered 20 min Job Ticket: - walk-in Is there a job ticket? Verify info on job ticket Is job ticket complete? Bring job to Doc Ctr 2 min N - 2% Y - 98% N - 5% Y - 95% DC Associate completes job ticket Call for more complete info Check due time Print operator queues job Process capable to complete job on time? Schedule job N - 5% Y - 95% Call to negotiate new time Run job 120 min Take to QC Table Wait for QC 60 min Perform QC; fill out QC slip 10 min Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min Job delivered Timestamp job ticket "in" A Job waits in queue 15 min Is QC OK? N - 1% Y - 99% Is there time to re-run job? Y - 100% N - 0% Call to negotiate new time B C 43

44 C. Worker Flexibility Example ROLES and RESPONSIBILITIES COPY LEAD ROLE / TASK SKILLS REQUIRED ASSIGNED TO PRIMARY BACK-UP SECONDARY BACK-UP OTHER TRAINED ASSOCIATES Oversees copy production Excellent communication skills Good problem-solving skills Excellent follow-through skills Good organization and planning skills Works with Account Coordinator to resolve copy inquiries/issues Excellent follow-through skills Good problem-solving skills Maintains copy supplies inventory Good inventory management skills Mirta Orders copy supplies Good planning skills Mirta Mirta Mirta Acct Coord E X PO S U R E Ensures completion of daily log summaries for One Page Manager is provided by 10:00am to Acct Coord Negotiates, as required, changes in end user requested due times Performs all Copy Associate functions COPY ASSOCIATE Excellent follow-through skills Good at details Mirta Acct Coord Good negotiation skills Mirta CAM (see Copy Associate) Mirta Dan, Doug, Laurie Dan, Doug, Laurie Copies job per instructions Key Op trained on respective equipment Good at details Good prioritization skills Dan, Doug, Laurie Dan, Doug, Laurie Dan, Doug, Laurie Mirta EXPOSURE QC's jobs Good at details Laurie Mirta Ensures all copy logs completed accurately Good organization skills Dan, Doug, Laurie Binds/finishes jobs per instructions Trained on all bindery equipment Dan Dan, Doug, Laurie EXPOSURE Dan, Doug, Laurie Mirta 44

45 4. Process Flow Improvement Techniques A. Remove Excessive Non-Value Add Time B. Perform Layout improvement Co-location of Personnel Concurrent work Case teams Mobile equipment Digitization C. Create focused work space D. Re-perform task balancing 45

46 A. Non-Value Add Time Improvement Example Goal is to limit non-value add tasks which Phone call from end user include: Handling paperwork Counting, issuing, retrieving Waiting Proofreading Job Ticket: - walk-in Inspecting and checking Sorting work Logging information Checking calculations Reviewing and approving Moving and setting-up Monitoring work Any type of rework DC Associate picks up job and time stamps 2 min Is there a job ticket? Verify info on job ticket Is job ticket complete? Walk job to Doc Ctr 2 min A N - 2% Y - 98% N - 5% Y - 95% DC Associate completes job ticket Call for more complete info Transportation Inventory Motion Waiting Overproduction Over processing Defects/Rework A Give job to print operator Print operator queues job Process capable to complete job on time? Job waits in queue 15 min Check for paper stock B N - 5% Y - 95% Call to negotiate new time B Log job into Equitrac Run job 120 min Perform QC; fill out QC slip 10 min Is QC OK? Y - 99% Delivery Associate pciks up job from Doc Ctr and time stamps job 'out' Completed job returned to end user 2 min N - 1% Is there time to re-run job? Y - 100% N - 0% Job delivered Call to negotiate new time Total (post-improvement) Cycle Time = 135 min = 157 min. PCE (Process Cycle Efficiency) = 86.0% 46

47 Traditional vs. Cell Process Flow Traditional Characteristics Resources are arranged in distinct functional departments Departments can often be in different buildings, locations or even states Employees are dedicated to a department and a position/workstation Employees have specialized knowledge Departments are arranged by space required or space availability over time with no particular flow Batch processing No visibility to the whole process, nor knowledge of a broader process (very myopic) Poor metrics for total process performance If metrics exist, they are at the task level, leading to sub-optimization of the whole process Cell Characteristics Unneeded (non-value added) steps are removed Value-added steps are simplified Resource layout follows the whole process sequence, usually in a U- or C-shaped path to minimize the distance the operator travels from the end of one cycle to the beginning of the next. There are co-located, cellular layouts Employees are cross-trained (can do multiple jobs) creating a flexible workforce One-piece flow processing (pull signals) Authorization barriers are removed Processing is paced to the customer demand rate (takt rate) Standard operations are defined 47

48 Cell Concept Exercise Volunteers Please Only 3 48

49 21'-0" B. Layout Improvement Example Goal is to reduce handoffs and have the service or information travel as little as possible to minimize the customer wait time. 58'-8" 58'-8" 48'-3" Rat Traps 6'-0" 6'-0" 6'-0" 6'-0" 6'-0" Power Cables 6'-0" 6'-0" 6'-0" 12'-4" 5'-3' Walk Through 3'-2' 3'-2' 3'-2' 3'-2' 3'-2' 3'-1'6" 3'-1'6" 3'-1' 3'-0" 3'-2' DC 40 4'-2' 5'-2' 8'-0" 9'-0" 2'-0" 3'-3' 2'-6" 2'-0" 1'-6" 3'-0" 20'-0" 4'-0" 1'-6" Space Folder 2'-0" Folder 3'-2' 13"-13" pole Padder 3'-1' Padder 3'-1' 6'-6' Workstation 6'-6' Workstation 4'-2' Hub DT ' 6"-3'8" 10'-2'6" NEPS 4'-2' 3'-2' Admin 4'-2' DT ' 6"-3'8" 6'-6' Lead 4'-2' 14'-6 5/8" 48'-3" Shrink Wrap 10'4"-3'10" Table 6'-3' 5'-3' DC '-6" Padder 3'-1' Drill 3'-3'6" Cutter 3'9"-2'10" Padder 3'-1' 6'-6' Workstation 4'-2' 3'-2' 3'-2' 4'-2' 3'-2' 3'-2' Forms Forms Folder 6'-0" 6'-0" 10'-2'6" 6 " 0-' DT ' 6"-3'8" DT ' 6"-3'8" 14'-6 5/8" 6'-6' Workstation 3'-2' Admin NEPS NEPS 3'-1'6" 3'-1'6" 34'-9" 42'-0" Ship Pal Benefits Cost 13'-6" 5'-2' 4'-2' Cutter 3'9"-2'10" Drill 3'-3'6" 3'-1'6" Table 6'-3' Shrink Wrap 10'4"-3'10" 13'-6" PROPOSED LAYOUT #1 Enabled Work flow/ Productivity Smaller Footprint Process drive crosstraining Parallel process Multitasking staff Cost of Drop electrical Cost of wall construction Comfort Zone change Production Interrupted Before NOTE: Each color line is a different path depending on job type After 49

50 C. Create Focused Work Space Orient Information, Terminals, Materials, Equipment, and Supplies to make use of Principles of Motion Economy Keep body (trunk) motions to a minimum. Use gravity instead of muscle whenever possible. Avoid zigzagging motions and quick direction changes. Move with steady rhythms. Keeps materials/supplies close and in front. Arrange material and tools in order of use counterclockwise. Work at the proper ergonomic height. Locate materials so they are easy to lift. 50

51 D. (Re)-balance Work Content Unbalanced process drives low productivity Give each operator/task the same pace of work! Unbalanced process Printing 20 min / set Balanced process Drill Press 5 min / set GBC Bindery 15 min / set Printing 20 min / set Drill Press 5 min / set GBC Bindery 15 min /set 51

52 5. Standardize Operations Create standard operating procedures Use simple, visual tools to: prevent defects facilitate training needs Establish accountability and ownership 050 S.O.P OP # Shipments (000s) Closes & On-Time Completions Jan FebMar Apr May JunJul Aug SepOct Nov Dec OTC (%) Closes Closes Goal OTC O PCT (Days) J an Feb Mar Apr PCT and PCE (Appl, Proc, Appr, Close) PCT May JunJul PCE Aug Sep Oct Nov Dec PCT Goal PCE Goal 20.0% 15.0% 10.0% 5.0% 0.0% PCE (%) LIP (MMs) Jan Feb Loans-In-Process (Appl, Proc, Appr, Close) Mar Apr May Jun Jul Aug Sep Oct Appl Proc/App Close Nov Dec 080 OP #1 020 Overhead Labor Productivity (=Appss Processed / Payroll Hours) Rolled Throughput Yield (Appl, Proc, Appr, Close) Customer Satisfaction (Post-Close Survey Results) Work Instructions Standard Operations Layout OLP Productivity 50% 40% 30% 20% 10% 0% Jan FebMar Apr May JunJul OLP Prod Aug Sep Oct Nov Dec OLP Prod Goal 100% 90% 80% 70% 60% 50% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RTY RTY Goal Metrics & Dashboards CS (%) 100% 96% 92% 88% 84% 80% Jan Feb Mar Apr May Jun Jul CS CS Goal Aug Sep Oct Nov Dec 52

53 Best Practices IT, Transactional... Certifications & Awards Baldrige, Black Belt, ISO Consultants Six Sigma, Kaizen, Manufacturing... Culture Evolution Change, Teams, Shared Need... Methodologies DMAIC, 6 Sigma, Lean... News & Events News, Peer Publishing, Events... Organizations & Businesses Businesses, ISO, Universities... Statistics & Analysis Control Charts, Online Textbooks, Variation... Tools & Templates Calculators, DOE, Software... Voice of the Customer esurveys, Surveys, Focus Groups... 53

54 54

55 Hope to see you in March Visit our Website 55