Lean Six Sigma Black Belt Week 3

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1 Lean Six Sigma Black Belt Week 3 Chapter 3-1: Lean Re-Entry and Process Institute of Industrial Engineers 3577 Parkway Place Suite 200 Norcross, GA 30092

2 Lean Six Sigma Black Belt Week 3 Agenda Day 1 Day 2 Lean Re-Entry Process Day 3 Day 4 Day 5 Value Stream Mapping Flow Pull Perfection/Eliminate Waste Voice-of-Customer/Quality Functional Deployment 5S A3 Kaizen 3-1-2

3 Lean: Re-Entry Lean 3-1-3

4 Taking it to the next level... How do the elements of the Lean fit together? How does a Lean Black Belt" provide direction and vision towards a corporate lean effort? How does a lean Black Belt" apply the principles of lean across an environment? 3-1-4

5 Approach Effective Learning: % of Knowledge Retained after Completion Teaching one-to-one 90% Learning by doing 75% Discussion group 50% Demonstration Audio/Visual 20% 30% Reading Lecture 5% 10% Source: National Training Laboratory, United States 3-1-5

6 Burning Platform, Critical Issues, Challenge # $ $? Source: IOM

7 Cost of Quality $ Defect Rework / Repair Cost of Defects Defect Prevention Defect Identification / Fixes Design Process Operations Process Maintenance Process Time 3-1-7

8 Cost of Care $ Emergency / Crisis / Trauma Cost Care Service / Treatment Healthy Design / Prevention Time 3-1-8

9 Designed for Lean Care $ Facility Overhaul Cost Operational Improvements Designed in Care Time 3-1-9

10 Affordable Healthcare What is Affordable Healthcare? What does Lean have to do with it? How do you design in Affordability? How are you approaching Design for Affordability?

11 Theory of Affordability Formula for Optimization Value >= Total Operational Cost / Total Cost of Ownership <= Purchasing Capability Very High Very Few Value Higher Median Intermediate Few Influential Middle Masses Customer s Capability to Purchase & Sustain* Low No Value Free Low Medium High Very High Total Operational Cost / Total Cost of Ownership - Price & Cost Movement Variability + Everyone *Including Organizations

12 Principles of Affordability R E Q U I R E M E N T S A V A I L A B I L I T Y S C O P E & Q U A L I T Y R E L I A B I L I T Y C O S T / E X E P E N S E T I M E & S P E E D Leadership Strategy Systems Competency and Capability Aligned with Target Markets /Customers and Value People Purpose Vision, Values, Mission House of Affordability

13 Health Care An Ideal State Predictable, repeatable care, exactly what the patient needs, defect free. One by one, customized for each individual patient. On demand exactly as requested. Affordable care with a bottom line. Immediate response to problems or changes. Efficient care, No Waste Effective care: Safe for patients, staff and clinicians: physically, emotionally and professionally. Lean Six Sigma provides a framework

14 Lean Principles Value Value Stream Flow Pull Perfection (Eliminate Waste)

15 Sany s Lean Thinking Lean 完善 价值 拉动 Speed Quality Value 价值流 流程 Flow

16 Healthcare is about LEAN Right-on-Time Efficient Strategic Planning (Policy Deployment) Rapid Improvement Human Touch Automation Response Signals Change Over Takt Time Root Cause Healthcare Value Stream Mapping Problem Solving Error Proofing (Fail-Safe) Status P-D-C-A 5S (Organization), Visual Management, Quality Tools, Standard Work (Standardization) The Healthcare House of Lean

17 Lean Philosophy All forms of waste must be identified and eliminated. This involves all activities of the enterprise including: design operations customers supply etc

18 Lean Overview Lean emphasizes the elimination and prevention of waste. Lean is focused on the customer by addressing what is value added and what is non-value added. Products and services are delivered Just-in-Time meaning in the right amounts, at the right time and in the right condition. Products and services are produced only when a signal is received from the customer and are pulled through the system. A lean system allows for an efficient response to fluctuating customer demands and requirements

19 Lean Benefits Eliminate waste Reduce non-value added activities Improve process flow

20 Essential Elements to Become Lean and Sustain Lean There must be a clear, compelling, and urgent reason to change. Cross-functional leadership must proactively and visibly lead the organization through the change process. This means getting the right leaders to work together to develop a vision of what the organization needs to become and a strategy for getting there. The right leaders are those with enough power to lead the change throughout the organization. Leadership must continually communicate and role model the new vision and the strategies. Leadership must break down barriers to making the necessary improvements

21 Essential Elements to Become Lean and Sustain Lean Cont d Leadership must engage the people closest to the top priority problems, or the opportunities, to identify, design, develop, plan, and implement the improvements. Leadership must leverage the successes and key learnings for making improvements by eliminating waste in other areas. Leadership must help everyone in the organization understand the connection between the improvement activities and results with the vision of the organization so the new behaviors become the part of the way we engage our people and run our business

22 The Lean Environment Successful Lean implementation requires the total immersion of top management. Leaders must create an environment that allows members to participate in the decisions that affect their work, voice honest opinions and constructively criticize and challenge tradition. This may involve reorienting the organization and changing entrenched behavior. Communicating a clear vision. Creating a sense of urgency and emphasizing continual training. Stimulate workers and managers alike to engage in the kind of cooperative experimentation that is the cornerstone of a vital, learning organization

23 Value Added vs. Non-Value Added Activity Value Added Value adding activity is any activity that transforms raw material to meet customer requirements. These are things the customer is willing to pay for. Non-Value Added Non-value adding activities are those activities that take time, resources, or space but do not add to the value of the product or service. These activities should be eliminated, simplified, reduced or integrated

24 Lean = Eliminating the Wastes Typically 95% of Total Lead Time is Non-Value Added!!! RUN TIME Order Processing, Transport, Storage, Waiting, Rework, Machine Setup, Inspection, Machine Breakdowns, etc... Total Lead Time

25 Just-in-Time System Key factors in lean include quality, quantity, timing and cost. Quality must be built into the process. The equipment and process must be robust in order to continuously meet tolerances and specifications. The system must also be highly flexible to adapt to wide demand fluctuations. The processes and equipment must respond easily and swiftly to increases or decreases in service requirements. Services must be delivered on time to satisfy the customers demands

26 Key issues of quality, quantity, timing, and cost Quality Build Quality into the Process Understanding process capabilities Appropriateness of specifications Preparing gages Preparing work instructions Process maintenance Equipment maintenance Process controls Inspection systems Quantity Highly Flexible and Adaptable Processes and Equipment Flexible processes Flexible equipment Small equipment smaller footprints Convertible equipment Concentrated processes Timing Deliver on schedule Scheduling Shortening lead times Flexible systems Cost Reduce capital and product costs Low cost designs Calculate running costs in cost calculations Mindful of excess quality Standardized tooling and equipment

27 Continuous Improvement Continuous improvement principles include simplifying the process, flexible equipment, flexible processes, TAKT time, chaku-chaku, cellular manufacturing, u-shaped cells, ergonomics, hanedashi, jidoka, poke-yoke, and eliminating waste. The purpose of lean is to continuously improve designs and processes and, in effect, become more competitive

28 Quality Iceberg Effect Warranty Rework Scrap Repair Visible 2-3% of Sales Added Inspection Non-visible 5-8% of sales Hidden?% of Sales Lost Sales Lost Customer Credibility Lost Customer Loyalty Excess Inventory Increased Number of Setups Engineering Changes Process Changes Expediting Costs Longer Cycle Times Late Delivery Charges

29 Quality Work Environment Simplify Eliminate what is not needed Straighten Organize Scrub Clean work area Stabilize Maintain and improve Sustain Make 5S a way of life

30 Five Lean Principles Begin with the Customer!!! Specify what creates value from the customer s perspective Identify all steps across the entire value stream Make those actions that create value flow Only make what is pulled by the customer Just-in-Time Strive for perfection by continually removing successive layers of waste Focus on understanding the first four principles. Perfection is ongoing

31 Toyota Production System Taiichi Ohno, Founder of the Toyota Production System (TPS) Ohno A major condition for production under the Toyota Production System is the total elimination of waste, inconsistency, and excess. Ohno All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-valueadded wastes

32 Toyota Production System Ohno uses the words: Harmony Standardization Inconsistency Noise Level loading Balance Work like the tortoise, not the hare Level out the workload Value reliability over speed REDUCE VARIATION!!!!!

33 Toyota System Rules of Engagement Rule 1 all work shall be highly specified as to content, sequence, timing, and outcome. Rule 2 every customer-supplier relationship (internal & external) must be clear and direct. Rule 3 The path followed by each product must be simple and direct. Rule 4 any improvement must be made in accordance to the scientific method, at the lowest level possible in the company, under the guidance of a trained expert

34 Question How do you define lean?

35 Moving away from the silo... Change our focus from applying the tools in silos Integrate lean throughout the entire enterprise Become a lean enterprise

36 Creating partnerships Break down the silos Build relationships throughout the enterprise

37 Lean Strategy Deployment What do we need? A system designed to achieve world class excellence in customer satisfaction. The system, beginning with the voice of the customer, continuously strives to improve quality, delivery, and cost. The system provides the necessary tools to achieve specific strategic objectives with the involvement of all employees

38 Business System Alignment Voice of the Customer Policy Deployment Quality and Timeliness of Service Cost Improvement Customer Deliver Customer Satisfaction Improvement and Growth 5S SMED Visual Mgt Cellular Mfg Standard Work Six Sigma QFD TPM Takt Time Flow Kanban DFM Employee Involvement

39 NCR Retail Systems Performance Measure Customer Satisfaction 72.1% 85.6% Employee Satisfaction 52.0% 65.0% Ontime Delivery 60.2% 92.0% Quality 87.0% 99.2% Profitability (HDW Revenue) $220M $290M Profit/Loss ($5M) $3M Employee Bonus 0% 3.02%

40 F/A-18 Super Hornet Performance Measure Rate 1/5.5 days 1/4 days 6 s > 6 s Price $55M $49.9M Pg 7, Par

41 DoD MRAP Mine Resistant, ambush Protected Vehicle Integration 5/day (8/2007) 50/day (11/2007) 0 (1/2007) 1500 (1/2008) 27,500 (12/2010) Lives Lost Lives Saved Continuous Improvement

42 Lean Healthcare What do you plan to do to make an impact?

43 Lean Process

44 3-1-44

45 The Race Car

46 Simulation Using the instructions, and the process you create, build 12 race cars using a one-piece-flow approach. Record the following: Time for the first car Total time Number of defective race cars Number of good race cars Your process Your efficiency and effectiveness

47 See It

48 Process Supplier(s) Input(s) Process Output(s) Customer

49 Process Plan Material Tools/Visuals Layout Set Up Inventory Flow Timing Etc

50 The Race Car

51 Simulation Using the instructions, and the process you create, build 12 race cars using a one-piece-flow approach. Record the following: Time for the first car Total time Number of defective race cars Number of good race cars Your process Your efficiency and effectiveness

52 Process Improvement Requirements Time Quality Cost

53 Process Discussion What exactly made a difference?

54 Closing thoughts on Lean and Process?

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