IT 470a Six Sigma Chapter X

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1 Chapter X Lean Enterprise IT 470a Six Sigma Chapter X Definitions Raw Materials component items purchased and received from suppliers WIP work in process, items that are in production on the factory floor FG finished goods, ready to be shipped to the customer Inventory parts in storage, could be raw materials, WIP or FG Lead time the time to make a product within a facility ready for shipment End to End Lead time the longest time to make a product INCLUDING the time to order and receive parts and prepare and ship a product, sometimes with average delivery time Operation a defined set of activities performed as a step on a product Work Center a defined area or equipment grouping in which operations are performed. Cycle Time the time required to complete one cycle of an operation Queue time the amount of time a part or batch will wait at an operation before being worked on (usually in hundreds of an hour, but sometimes days long) Set-up time the amount of time to set-up a machine or operation before the part or batch can be work on (usually in hundreds of an hour/quantity, i.e..5/1). It does NOT change with the quantity being produced. 0.5/1 or 30 minutes for 1 or 100 or Run time the amount of time to run one part (usually in hundreds of an hour/quantity). Time changes with quantity being produced 0.5/100 is 30 minutes for 100 or 60 minutes for 200. Batch parts are kept within a defined batch during the process with an identifier. Batches can be split or combined but the base integrity of the batch id is maintained. Ex or can be split to and , then combined back to Benefit: traceability for operators, machines, defects, etc. Flow parts move through the process with defined batches or batch id. Benefit: faster, less recording Make to Stock producing products as inventory waiting for a customer order Make to Order producing products after a customer places an order. Throughput the rate at which product moves through a system Batch vs. Flow example Batch: 3 operations of 1 minute: Batch of 100 EXAMPLE First operation 100 min., 1 st unit 201 min., total 300 minutes Flow: first operation 1 min, 1 st unit 3 minutes, total 300 minutes Batch: 3 operations of 1 minute with 1 operation set-up Cost of batch versus set-up: Set-up cost 1 min $ nd & 3 rd Op: $2 per pc Batch: $4.10 per pc Flow: $14 per pc 1/10/2011 1:37 PM 1 of 5

2 Constraint Management Goldratt wrote The Goal and developed the Theory of Constraints (TOC) 3 basic measures of a system: throughput, inventory, and operational expenses Increased Throughput the rate at which a system generates money through sales. No $ until sale is made. Reduced Inventory - $ invested in purchasing things Reduced Operation expenses: money spent to turn inventory to throughput. Flow through system should equal market demand; too much flow means inventory; too little means lost sales Bottleneck resource whose capacity is equal or less than the demand or need; should be managed by: setting a pace, much be kept running (offload, increase), prioritize. 5 Step Method of TOC Identify the system constraints these limit performance and throughput Example (overhead) Determine how to exploit constraints- keep it full Subordinate everything to the constraint (offload, expand, etc.) Elevate the constraint try to eliminate, expand so no longer a constraint Repeat Lean Thinking 5 principles: o Specify value by product o Identify value stream for product o Make value flow o Let customer pull value from product o Pursue perfection Value through attributes determined by the customer o Target price typical: cost + margin; lean: combination of competitor price and elimination of waste - should be less than current price by eliminating cost Value Stream set of activities linking a process or product; 3 types: o Problem Solving solves a problem for company, product introduction o Information management support functions, order processing, planning, invoicing o Transformation physical conversion of material to products. Value chain: is different; operates at a higher level, including supplier, HR, sales, Services, R&D. Value Flow: ideal process is a continuous flow of a single piece in one continguous line; no wasted motion, no WIP, no queue time, w/flexibility for the unexpected. Mapping Process: o Identify product, sales and delivery o Walk through the process recording each step o Document o Develop future state. 1/10/2011 1:37 PM 2 of 5

3 Pull vs. Push, Make to Order vs. Make to Stock Pull system make after receipt of the order o Advantages: reduced FG and WIP, more flexibility. Disadvantage: lead time, less machine efficiency Less Inventory and WIP: resources not tied up, accuracy improves, less damage, faster problem identification & resolution, less storage Example: sheet Non-value activities: Overproduction more or earlier than next process or operation (customer) can use Inventory supplies, raw material, WIP, FG Repair/Rejects rework or scrap Motion unneeded, moving to get parts, finding tools Waiting queue Transport moving material around Muda, 7 wastes Overproduction from yield variation, location optimization (utilization), set-ups Wastes time and money Inventory ties up $, obsolescence, damage Repair/rejects wasted labor & material, trash cost, added labor & material rework Motion- Nonproductive, wasted labor $ Processing modifying a part through an extra operation to remove an unwanted attribute (example: removing a burr) Class?? Different from repair/rework?? Waiting idle time Transport moving does not add value, chance for damage Shingo technique of classifying human motions: 4 grades Assemble, disassemble, use (value) Transport, hold (non) Search, select, inspection (non) Rest, planning, delay (non) Work place Lay-out, ideal lay-out, line or cell o Advantages, disadvantages of both Takt Time - the time required to meet the demand Net Operating Time per Period Customer Requirements per Period Cycle time amount of time to complete a task and move it. Total cycle time must be below takt time. Reduced cycle time: reduce lead time, reduce waste $, increase capacity, reduce damage, beat competition. Book examples: Takt time = 240, 5 operations; target 50 each. 1/10/2011 1:37 PM 3 of 5

4 Very unrealistic example!! Most operations vary in time. Kaizen Event: Technique of rapid improvement focused activity lasting 1 week. 2 days training, 2 days data collection and making changes, 1 day present results Training make sure appropriate for members (book lists types) Initiated to reduce cycle time, evaluate value and non-value activity Data collection time studies, observation, etc. (previous chapters) Value Stream Mapping map all activities involved in manufacture from start Generally focus on product group with same process; may cross boundaries or functional groups Examples: simplex, vs cutlery vs classic; manufacturing vs sourcing; Benefit big picture, identify waste, highlight opportunities, common ground Current state mapping start from scratch (don t use standards), actual observations, complete (make sure no variation in product group) o Address: value added time, lead time (total), cycle time (one step), Stebbins: possibility of defects, rework time. Future state mapping best future plan, address capacity constraints, customer needs, process improvement, work flow Implementation planning back to chapter 3 project analysis (NPV, IRR, etc.) and chapter 4 management. Visual Factory Japanese Technique 1) make problems visible 2) stay in contact w/work place (gemba) 3) clarify targets for improvement Types: bulletin board, quality charts, production targets, safety and Good & bad how?? Class Sterling example Jidohka devise that stops a machine when defective product is made (automated line) Kanban cards to control production or inventory (or just simply storage spaces) Poka-Yoke Tool board display or store appropriate tools, only those for that task, accountability Kanban Pull system Rather than batching (releasing and pushing through); the need for a part downstream triggers production As parts are used, a Kanban card goes to previous operation as a signal to make more Important consideration is time to replenish vs. time to use Due to limited wip and timing, rework, breakdowns, absences, efficiency & quality must be improved; consequently these issues cost more when they occur Poka-Yoke A mistake proof device or procedure to prevent or detect an error (like go/no-go) Techniques color coding, designing for one way fit, automatic signal of wrongness Benefits inexpensive, fast, supports 100% inspection (good or bad??) 1/10/2011 1:37 PM 4 of 5

5 Standard work Repeatability no variation Precise description of a work activity, including cycle time, sequence of tasks, and parts & quantities required (batch sheet) Should also include special instructions, reference documents, etc. Can be displayed at equipment or travel with parts SMED single minute exchange of die Concept to change out a die in less than a minute (target) 3 myths of set-up: requires skill and experience long runs are more efficient (less cost) production runs should be based on EOQ Improvement steps: Determine what can be done while machine is running (internal) or not running (external) Reexamine internal steps to change to external Redesign internal to reduce time Disadvantage: die may be more expensive or external steps may add labor (additional person) Total Productive Maintenance (TPM) Maximize machine/equipment effectiveness through PM to reduce breakdowns Involves all employees, not just mechanics, systematized, documented, analyzed 6 costs: equipment failures, setup & adjustment time; idling & minor stoppages (ex. Belt crash); reduced speed; process defects; set-up & shutdown yield Metrics formulas Design for Maintainability and Availability in equipment Criteria for designing or Purchasing equipment Standardization: compatibility of parts and minimize # of parts Modularization: standard sizes, shapes, modular parts Functional packaging: components in a kit Interchangeability: spares easy to install Accessibility: able to replace and repair easily Malfunction annunciation: notifies operators of a failure Fault isolation: ability to easily determine problem Identification: method to identify parts and record repairs and PM 1/10/2011 1:37 PM 5 of 5