Lean and Six Sigma: A Holistic Approach to Process Improvement

1
Lean and Six Sigma A Holistic Approach to
Process Improvement

• Presented to
• ASQ-Denver
• November 30, 2005
• By
• David McGee

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LEAN SIX SIGMA EXPERTISE IS A VITAL PART OF ANY
PROCESS IMPROVEMENT FUNCTION

• Processes improvement comes in three flavors
• 1. Making an existing process better
• 2. Making a new process
• 3. Making an existing process faster
• Heres how Lean Six Sigma fits in
• 1. To make an existing process better gt Use
  DMAIC
• 2. To make a new process gt Use DFSS
• 3. To make a process faster gt Use LEAN

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HOW LEAN FITS IN

• Most Lean projects follow the DMAIC (Define
  Measure Analyze Improve Control) process
• But Lean tools can be applied on their own
• Lean tools can also be applied to the results of
  a DFSS
• (Design for Six Sigma) project

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DMAIC IMPROVE, DFSS, LEAN
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BASIC LEAN CONCEPTSThings We Need to Know Before
We Start

• TOTAL LEAD TIME (also called total cycle time,
  process lead time, or total cycle time) The
  time from when a work item enters a process until
  it exits.
• EXAMPLE Total Lead Time of a mortgage process
  could be measured as the elapsed time from when
  an applicant calls until the mortgage closes
  (average 33 days).
• THINGS IN PROCESS (TIP) or WORK IN PROCESS (WIP)
  Any work item that has entered the process and
  not yet exited. Can be anything materials,
  orders, applications, emails, etc.
• EXAMPLE There were 3300 refinance applications
  in process at the end of the month.
• AVERAGE COMPLETION RATE (Exit Rate or
  Throughput) The output of a process over a
  defined period of time.
• EXAMPLE Average completion rate of the
  mortgage process 100 refinance applications
  closed/day last month.

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BASIC LEAN CONCEPTSThings We Need to Know Before
We Start (cont.)

• CAPACITY The maximum amount of product or
  service (output) a process can deliver over a
  continuous period of time.
• EXAMPLE The capacity of the process is 120
  mortgages applications/day.
• TAKT RATE (customer demand rate) The amount of
  service or product required by customers over a
  continuous period of time. Process should be
  timed to produce at the takt rate. Any lower and
  customers are disappointed, any higher and
  products or service is produced that cannot be
  used.
• EXAMPLE The takt rate for mortgage applications
  is 130/day.
• TIME TRAP Any process step (activity) that
  inserts delay time into a process.
• EXAMPLE Gathering up all mortgage applications
  once/day before entering them into a computer
  system. This causes delays for mortgages
  received during the day, which is a time trap.

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BASIC LEAN CONCEPTSThings We Need to Know Before
We Start (cont.)

• CAPACITY CONSTRAINT Any activity in the process
  that is unable to produce at the completion
  (exit) rate required to meet customer demand
  (takt rate).
• EXAMPLE Property appraisers can evaluate 120
  properties/day, but customer demand is currently
  130/day. Appraisers are a capacity constraint.
• VALUE ADD (VA) TIME Any process step or
  activity that transforms the form, fit, or
  function of the service or product for which the
  customer is willing to pay.
• EXAMPLE The sum of the value add times in the
  mortgage refinancing process is 3.2 hours.
• NON-VALUE-ADD (NVA) TIME Waste in a process.
  Customers would be willing to buy a product or
  service that did not have these costs if it meant
  a lower price.
• EXAMPLE Walking paperwork to the appraisers
  offices. Should be electronic.

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MORE ON VALUE ADD AND NON-VLAUE ADDValue Add
(VA) vs. Non-Value Add (NVA) Analysis

• Why Its Important
• Used to determine process steps that customers
  are willing to pay for from those that they are
  not.
• Objective of VA/NVA analysis is to
• - Identify and eliminate the hidden costs that
  do not add value for the customer
• - Reduce unneeded process complexity, and thus
  errors
• - Reduce the process lead time improve Process
  Cycle Efficiency (PCE) (see slide 13)
• - Improve capacity by better utilizing resources

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MORE ON VALUE ADD AND NON-VLAUE ADDValue Add
(VA) vs. Non-Value Add (NVA) Analysis

• How to do a VA/NVA Analysis
• Classify each process step as VA (or customer
  value add), business value add (required waste),
  and non-value add.
• Value Added (VA) Any activity that is
  essential to deliver the service or product to
  the customer
• - Must be performed to meet customer needs
• - Adds form or feature to the product/service
• - Enhances quality, enables on time or more
  competitive delivery, or has a positive impact on
  cost (and therefore what the customer pays)
• - Customers would be willing to pay for this
  work if they knew it was being done
• Tip If unclear, imagine what would happen if
  you did not do this step. Would customer
  complain, not buy the product or service? If
  yes, then its very likely value add.

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MORE ON VALUE ADD AND NON-VLAUE ADDValue Add
(VA) vs. Non-Value Add (NVA) Analysis (Cont.)

• Business Non-Value Added (BNVA) Activities
  that are required by the business to execute the
  VA work but add no value in the eyes of the
  customer
• - Usually includes work that
• Reduces financial risk
• Supports financial reporting requirements
• Aids in execution of VA work
• Is required by law or regulation
• EXAMPLES Order entry/processing, product
  development/research, sales/marketing,
  IRS/OHSA/EPA reporting
• Tip If you stopped doing a step and your
  internal customers or external regulators
  complained, then its probably a BNVA activity

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MORE ON VALUE ADD AND NON-VLAUE ADDValue Add
(VA) vs. Non-Value Add (NVA) Analysis (Cont.)

• Non-Value Added or Waste Activities that add
  no value from the customer's perspective and are
  not required for financial, legal or other
  business reasons.
• There are endless examples of NVA. Here are a
  few
• - Handling more than is minimally necessary to
  move the product/service along, i.e. unnecessary
  transportation, moving/sorting, paperwork,
  counting
• - Rework to reduce/fix errors
• - Duplicative work, supervision or monitoring
• - Waiting, idle time, delays
• - Overproduction
• - Over processing (too many steps), exceeding
  customer requirements
• Tip If you stop doing the activity, would an
  internal or external customer notice or care? If
  not, then probably NVA.

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MORE ON VALUE ADD AND NON-VLAUE ADDValue Add
(VA) vs. Non-Value Add (NVA) Analysis (Cont.)

• AN IMPORTANT POINT ABOUT NON-VALUE ADDED COSTS
• Many non-value added costs are quantitized,
  i.e., cannot eliminate the cost until the source
  is COMPLETELY eliminated.
• EXAMPLE It costs just as much to run a
  warehouse that is 10 full as it does one that is
  100 full. But if lead time is reduced such that
  the warehouse can be closed, costs take a quantum
  jump down.

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TIME EFFICIENCY METRICSUsed to Identify the
Sources and Impact of Inefficiency

• PROCESS CYCLE EFFICIENCY (PCE)
• Best measure of overall process health
• Percentage of VA time in the process PCE VA
  Time/Total Lead Time
• Total Lead Time can either be measured by
  measuring the total time it takes things in
  process to transit the process or use Littles
  Law (next slide) to determine the average PCE.
• PCE tells how efficiently the process is
  converting work-in-process into exits/completions
• Low PCE processes have large NVA work and costs
  and therefore great opportunities for
  improvement. Crate a Value Stream Map to
  indicate these opportunities. PCE values of 10
  or so are common pre-improvement.
• The only way to improve PCE is to reduce NVA work
  and costs.

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TIME EFFICIENCY METRICS (Cont.)

• LITTLES LAW
• On prior slide, defined PCE VA Time/Total Lead
  Time
• Littles Law is
• Total Lead Time Things in Process/Av.
  Completion Rate
• Number of things in process TIP or
  WIP
• Littles Law shows the relationship between
  TIP or WIP and the completion (exit) rate of the
  process.
• To improve Total Lead Time and, in turn, PCE,
  either increase capacity (average completion
  rate) and/or reduce TIP or WIP.

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TIME EFFICIENCY METRICS (Cont.)

• WORKSTATION TURNOVER TIME (WTT)
• WTT highlights which process step (time trap) to
  work on first.
• WTT for any process step is the amount of time
  needed to set up and finish one complete cycle of
  work for all the different things at that step.
  
• Calculating WTT for a Process Step
• WTT S (Setup time)
  (Process Time x Batch Size)
• for each thing worked on at
  that process step
• Select high WTTs to improve first.

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TO REDUCE LEAD TIME AND NON-VALUE ADD COSTS

• For the total process
• - Calculate TOTAL LEAD TIME (also known as
  Process Cycle Time)
• - Determine desired AVERAGE COMPLETION RATE
  (also known as customer demand rate or takt time)
• - Calculate the PROCESS CYCLE EFFICIENCY (PCE)
• For each step in the process
• - Identify process steps as VALUE ADD or
  NON-VALUE ADD
• - Locate and quantify TIME TRAPS and CAPACITY
  CONSTRAINTS
• - Compute WORKSTATION TURNOVER TIMES (WTTs)

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LEAN TOOLS PROBLEM-SOLUTION MATRIX
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LEAN TOOLS GENERIC PULL SYSTEMS

• Purpose
• To place a limit or cap on the maximum number of
  things or work in process (TIP or WIP), so that
  lead times are known and predictable (see
  Little's Law, slide 14). Then apply improvement
  tools to reduce WIP/TIP by eliminating the
  effects of variation (traditional Six Sigma) and
  batch size.
• When to Use It
• Whenever lead times are critical to satisfy
  customers and when NVA cost is significant
  compared to VA cost.
• How to do it
• Part 1 Determine WIP Cap (Maximum amount of
  work or things that should be in process at any
  one time)
• Step 1 Determine Current Total Lead Time (TLT)
• Option 1 Track individual items through the
  process, measure lead time
• Option 2 Use Littles Law to get an average
  lead time

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LEAN TOOLS GENERIC PULL SYSTEMS (cont.)

• How to do it (cont.)
• Part 1 Determine WIP Cap (cont.)
• Step 2 Determine current Process Cycle
  Efficiency (PCE, see slide 13)
• Step 3 Identify Target PCE
• Level at which the process should be
  operating based on world class (high end)
  
  efficiency
• If current PCE is
• ltlt low end, multiply current PCE by 10 to
  get target PCE
• lt low end, use low end figure as target PCE
• or gt low end, use high end as target PCE
• gtgt high end, move toward one step flow
• Step 4 Calculate target lead time for the
  process.
• Lowest process cycle time with the current
  process
• Target Lead Time VA time for critical
  path/Target PCE
• Step 5 Calculate WIP Cap
• Maximum WIP allowed within the process at
  any given time
• WIP CAP Target Lead Time x Exits
• Exits Number of completed products or
  service units
• out of the process in the time frame.

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LEAN TOOLS GENERIC PULL SYSTEMS (cont.)

• Part 2 Releasing Work into the System (Usually
  current WIP level is significantly greater than
  WIP CAP. Therefore, reduce current WIP and
  release work into the process to match the exit
  rate.)
• Step 1 Count the WIP in the process
• Step 2 Determine if you can release work or
  not
• If the WIP gt WIP CAP, do not release any
  more work
• - If this will harm
  customers, options are to temporarily increase
  capacity to lower WIP or perform a triage
  (next slide) of current WIP to see if some
  work can be set aside to make for new work
• If WIP lt WIP Cap, release enough work to
  get to the WIP CAP
• Step 3 Identify how you will know when more
  work can be released into the system. CAUTION
  As the PCE of a process reaches world class
  levels, the effects of variation are magnified.
  Do not reduce TIP or WIP too much without
  addressing issues of variability or a process
  could be starved for work creating a constraint

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LEAN TOOLS GENERIC PULL SYSTEMS (cont.)

• Step 4 Create a triage system for determining
  the order that future work is released into the
  system
• Option 1 First in-First Out (FIFO)
• Option 2 Triaging or working on highest
  potential items first. Set up a criteria for
  rating or ranking new work requests as to their
  potential for your company (i.e. whats important
  to you in light of VOC).
• Option 3 If there is capacity for parallel
  processing, shift work from overloaded process
  steps or adding/shifting resources
• Step 5 Set up processes for maintaining the
  Generic Pull System
• Identify the person who will release work into
  the system
• Develop alerts, signals or procedures that will
  let this person know when WIP has fallen below
  CAP, e.g. flags, emails, alert cards, etc.
• Train people in the new procedures
• Develop a transition plan to cover the current
  high WIP state to future WIP Cap state
• Implement and monitor results adjust as
  necessary

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LEAN TOOLS REPLENISHMENT PULL SYSTEMS

• Purpose
• To eliminate shortages or over stocking of
  supplies by creating a system where items are
  automatically replaced as they are used up
• When to Use It
• When in-process or end-item products, supplies or
  consumables (or any item for which shortages or
  stockouts are not acceptable), meet the following
  criteria
• Usage of the item is repetitive
• Demand for the item is inconsistent
• Stocking levels have a significant impact on
  service level for internal or external customers
• A Replenishment Pull system should never be
  installed without a Generic Pull system in place

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LEAN TOOLS REPLENISHMENT PULL SYSTEMS (cont.)

• How to do it
• Step 1 Determine Work Demand Rate (DMD)
• Average weekly or average daily usage
• - Based of history or forecasting (backlog) or
  a combination
• - Caution Historical data may not reflect
  changes in future business needs
• Recalculate frequently
• Handling seasonality
• Resize monthly if demand changes past a hurdle
  rate, e.g. if demand changes gt 20
• Use historical data or forecasts to determine
  signals that mean a resizing is necessary
• Forecast window should be at least the average
  Lag Time Weighted by Volume to account for lag
  times between demand and order receipt
• Use historical/future demand weighting tools to
  smooth ramp ups/downs
• Larger up swings gtgt higher weighting in
  forecast
• Smaller upswings gtgt lower weighting on
  forecast

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LEAN TOOLS REPLENISHMENT PULL SYSTEMS (cont.)

• Step 2 Determine Replenishment Lead Time (LT)
  and Order Interval (OI)
• Replenishment Lead Time (LT) The time from when
  a part or supply has been consumed until new
  parts/supplies are received
• - For purchased items such as supplies etc. add
  together Time to generate a purchase order
  Supplier lead time Transportation time
  Receiving inspection/stocking time
• - For manufactured items, add together Time to
  generate the work order
• Total process lead time Receiving/inspection
  time
• Order Interval (OI) Can be expressed as either
  the interval between orders or the order quantity
  to be purchased
• - Changing OI allows for trade offs between
  transactions, capacity and inventory

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LEAN TOOLS REPLENISHMENT PULL SYSTEMS (cont.)

• Step 3 Determine Optimal Safety Stock (SS)
  Level
• Safety Stock (SS) can be calculated in a number
  of ways. This method is generally preferred.
  Key Assumption The demand profile is normally
  distributed
• Safety Stock s service level X (LT) to the
  power b
• Where
• s service level desired service level
  (stockout coverage) number of standard
  deviations, relative to the mean, carried as
  safety stock. For example
• - Service Level 1 means that one standard
  deviation of safety stock is carried, and on
  average, there will be no stockouts 84 of the
  time
• - Service Level 2 means that two standard
  deviations of safety stock is carried, and on
  average, there will be no stockouts 98 of the
  time
• Lead Time (LT) Replenishment Lead Time
• b a standard lead time reduction factor
  (generally set at 0.7)

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LEAN TOOLS 5Ss

• Purpose
• To create and maintain a clean, safe and high
  performing workplace. 5S
• Enables anyone to distinguish between normal and
  abnormal conditions at a glance
• Is the foundation for continuous improvement,
  zero defects, cost reduction and a safe work area
• Is a systematic way to improve the workplace,
  processes and products through employee
  involvement
• 5S Definitions
• Sort Clearly distinguish between needed and
  unneeded items and eliminate the latter
• Set in Order (also known as Simplify) Keep
  needed items in their correct place to allow for
  easy and immediate retrieval
• Shine (also known as Sweep) Keep the work area
  swept and clean
• Standardize Standardize clean up (the first
  three Ss)
• Sustain (also known as Self-Discipline) Make a
  habit of sustaining established procedures

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LEAN TOOLS 5Ss (cont.)

• When to Use It
• Whenever a workplace is messy, unorganized
• Whenever people have to spend time tracking down
  tools, data, information, etc. needed to do a
  task
• In any of the DMAIC phases best implemented
• - In manufacturing, as one of the first Improve
  actions, because it will make other tools such as
  setup reduction more efficient
• - In office environments, service and
  transactional processes as a later Improve step
  or as part of standardization and cross-training
  in Control
• How to do it
• S1 Sort
• Goal Remove all items from the workplace that
  are not currently needed
• Does NOT Mean
• - Removing only items that you know you will
  never need
• - Simply arranging things in a neater fashion
• When doing sort, leave only the bare essentials
  When in doubt, Out!

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LEAN TOOLS 5Ss (cont.)

• How to do it
• S1 Sort (cont.)
• Identify or red tag the more potentially
  unneeded items Question the need for that item
  in that quantity. Such items could include
  unneeded files or paperwork defective, excess,
  unneeded items outdated or broken tools,
  supplies old cleaning supplies outdated
  posters, signs, notices.
• Evaluate and deal with red tagged items. After
  one week in a holding area red tagged items
  should be,
• - If determined unnecessary, sold, relocated,
  thrown away
• - If needed, kept
• S2 Set in Order (Simplify)
• Goal Arrange all work items in line with the
  physical workflow and make them easy to locate
  and use
• Draw a current state map showing the present
  location of all needed items
• Draw a future state map showing how the workplace
  should be laid out. Map should be large enough
  so people can post comments/suggestions.

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LEAN TOOLS 5Ss (cont.)

• How to do it (cont.)
• S3 Shine
• Goal Clean up the workplace
• Determine the shine targets. Think about safety,
  waste, cleanliness
• Create procedures for daily shine activities
• Set a housekeeping schedule and assign
  responsibilities
• Set periodic inspection and targets for
  machinery, equipment, computers, furnishings,
  etc.
• S4 Standardize
• Goal Create a consistent way of performing the
  daily S tasks
• Review procedures for Sort, Set in Order and
  Shine and incorporate into everyday work
  activities
• Use Visual Process Controls so people can readily
  see when an item is not in its designated place
• Schedule 5S activities frequently
• Create 5S agreements, who, what, when, where, how

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LEAN TOOLS 5Ss (cont.)

• How to do it (cont.)
• S5 Sustain
• Goal Installing the discipline such that the 5S
  mindset is incorporated into the culture
• Create 5S audit with a periodic schedule
• Establish a checklist so that anyone (visitors,
  new employees) can readily see what is being done
  
• Celebrate accomplishment and practice continuous
  improvement

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LEAN TOOLS REDUCE BATCH SIZE

• Purpose
• Create minimum safe batch sizes
• Batch sizes often set by management based on
  industrial engineering formulas or demand for a
  fixed time period
• Both typically result in lead times and inventory
  generally 30 to 80 larger than process requires
• When to Use It
• To create a lean system operating at peak
  efficiency with lowest cost
• How to do it
• Step 1 Calculate the following formula
• Min Batch Size Sl/2(1-X-Pl) where
  S Setup Time
• 
  l Demand Rate
• 
  X Defect
• 
  P Processing
  Time per Unit
• Assumption All products have the same demand
  and process parameters

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LEAN TOOLS REDUCE BATCH SIZE (cont.)

• How to do it (cont.)
• Step 2 Account for variation in demand
• The Min Batch Size formula does not account for
  variation in demand, which is addressed in two
  ways
• Manufacturing Additional finished goods
  inventory must be built in accordance with the
  safety stock formula (see slide 25)
• Service Applications Safety stock is not
  possible and customers must wait in queue to
  receive value added service time. Formula for
  queue time is
• Queue Time (Service Time/ of cross-trained
  servers)/(n/n-1)
• Where n approximate capacity at which
  servers are operating

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LEAN TOOLS 4 STEP RAPID SETUP (FOR SERVICE
PROCESSES)

• Purpose
• Reduce interruption to value-add work
• When to use it
• On any process step where there is a significant
  lag time (setup or change over time) between the
  completion of one task and full productivity on
  the next task or activity
• How to do it
• Step 1 Differentiate between serial and
  parallel setup activities
• Serial events Activities that cannot or should
  not be performed with other activities
• Example All activities by a bank teller
  while dealing with a customer (dont want to make
  a customer wait)
• Parallel events are events that could be
  performed while another task is being done
• Example Downloading a software file,
  processing data

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LEAN TOOLS 4 STEP RAPID SETUP (FOR SERVICE
PROCESSES, cont.)

• How to do it (cont.)
• Step 2 Convert serial setup activities to
  parallel setup activities
• Goal Offload setup activities to some other
  person, activity or process so they no longer
  disrupt value add work
• Use brainstorming, multivoting and other group
  activities and select improvement ideas
• Use Impact/Effort (4 box matrix) to prioritize
  efforts
• Re-examine serial activities to determine if they
  really are truly serial
• Step 3 Streamline remaining serial activities
• Simplify, reduce, eliminate movement
• Example Moving printers/copiers to
  eliminate walking
• Use electronic aids where possible
• Example Bar-coding vs. writing/typing,
  electronic notepads hooked into databases vs.
  handwritten notes
• Manage system/network needs
• Example Computers to sort disparate
  information

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LEAN TOOLS 4 STEP RAPID SETUP (FOR SERVICE
PROCESSES, cont.)

• How to do it (cont.)
• Step 4 Eliminate adjustments, standardize work
• Examine the ramp up time in serial setup work
  any time that reduces output
• Ask what prevents the process from operating at
  full speed during these time periods
• Be creative in finding ways to address these
  issues
• Example If people need to look up
  information, have it available through linked
  databases or keyword searches

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LEAN TOOLS TOTAL PRODUCTIVE MAINTENANCE

• Purpose
• To reduce scheduled and unscheduled down time
  from typical levels of 30 to below 5
• Definitions
• Preventive Maintenance Maintenance that
  occurs at regular time or usage intervals
• Predictive Maintenance Maintenance that
  is performed based on signals or diagnostic
  techniques
• TPM Metrics
• Operation Equipment Effectiveness or OEE
  Availability Level X Operating Level X Quality
  Level
• MTTF Mean time between failure
• MTTR Mean time to repair
• When to use it
• When planned and unscheduled downtime are
  contributing to poor Process Cycle Efficiency
  (PCE see slide 19)

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LEAN TOOLS TOTAL PRODUCTIVE MAINTENANCE (cont.)

• How to do it
• Prework Assess current operating conditions
• Evaluate machine/resource utilization,
  productivity, etc.
• Tally maintenance repair costs (parts and labor,
  extra training time, etc.)
• Phase 1 Return equipment to reliable condition
• Clean thoroughly
• Place a defect tag (can be color coded) on all
  equipment showing categories of what needs to be
  done. Record in a project notebook.
• Perform repairs
• Phase 2 Eliminate breakdowns
• Review defect tags from Phase 1
• Eliminate factors leading to failure
• Improve accessibility to machines/parts

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LEAN TOOLS TOTAL PRODUCTIVE MAINTENANCE (cont.)

• How to do it
• Phase 3 Develop TPM database
• Document all preventive and predictive
  maintenance activities
• Phase 4 Eliminate defects
• Provide for early detection of problems by
  training all relevant personnel in preventive and
  predictive maintenance techniques
• Install visual controls (see slides 46-48)
• Implement 5S housekeeping techniques (see slides
  2631)
• Regularly review and improve machine performance
• Improve safety

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LEAN TOOLS MISTAKE PROOFING AND PREVENTION
(POKA-YOKE)

• Purpose
• To prevent mistakes from occurring or making it
  impossible to pass mistakes on to the next step
  in the process
• Examples Mistake Prevention
• Machine operations that make it impossible or
  very difficult to produce a defective product.
  Does not require human assistance
• Electronic checklist built into a product or
  process/procedure
• Mistake Proofing
• Devices or systems that either prevent the
  defects or inexpensively inspect each item to
  determine if it is defective
• Software programming that makes it impossible to
  move onto the next step without accurately
  completing prior steps
• When to use it
• When rework to correct errors or process delays
  downstream are hurting Process Cycle Efficiency
  (PCE see slide 19)
• In situations critical to life and limb or cost

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LEAN TOOLS MISTAKE PROOFING AND PREVENTION
(POKA-YOKE, cont.)

• How to do it
• There are two basic poka-yoke approaches
• Control/Warning Approach
• Shuts down the process or signals personnel when
  an error occurs
• Dials, lights and sounds bring attention to the
  error
• Prevents the suspect work from moving on until
  the process step is complete
• Process stops when irregularity is detected (may
  be necessary if too costly to implement mistake
  proofing)
• High capability of achieving zero defects
• Prevention Approach
• Employs methods that DO NOT ALLOW an error to
  occur or be produced
• Gives 100 elimination of mistakes (100 zero
  defects)

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LEAN TOOLS MISTAKE PROOFING AND PREVENTION
(POKA-YOKE, cont.)

• How to do it (cont.)
• 7 Steps to Mistake Proofing
• Describe the mistake and its impact to customers
• Identify the process step where the defect is
  discovered and the step where it is created
• Detail the standard procedures where the defect
  is created
• Identify errors in or deviations from standard
  procedure
• Investigate and determine the root cause of
  deviations
• Brainstorm methods to eliminate or detect the
  deviation early
• Create, test, validate, and implement mistake
  proofing devices/procedures

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LEAN TOOLS PROCESS BALANCING

• Purpose
• To balance work across different sub processes
• When to use it
• When lead time is a problem
• How to do it
• Minimize movement
• Stabilize lead time before trying to minimize it
• Maximize resource efficiency
• Minimize number of process steps
• Balance tasks/labor across process steps
• Maximize space utilization
• Minimize Non-Value Add activities (conveyance,
  standby and motion wastes)
• Minimize the need to rebalance as demand
  requirements change
• Minimize volume variability (combine product
  category demand)
• Maximize flexibility for product introductions
  and discontinuations
• Use training and continual reinforcement to
  maintain gains

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LEAN TOOLS WORK CELL OPTIMIZATION

• Purpose
• To reduce the time needed to complete a task or
  set of tasks and reduce mistakes
• When to use it
• To reduce inefficient workflow (i.e. too much
  movement of material and/or people)
• How to do it
• Will never get the design perfect the first time
  get it in place then use operator feedback and
  continuous improvement
• Phase 1 Prework
• Stabilize lead times throughout the entire
  process
• Eliminate part shortages
• Make sure the entire process is meeting customer
  requirements (demand, quality)

44
LEAN TOOLS WORK CELL OPTIMIZATION

• How to do it (cont.)
• Phase 2 Redesign a Work Cell
• Design (layout, flow) for multiple machines or
  steps per operator, but overstaff at first so
  that CTQs are not compromised
• Decide where raw materials and Work In Process
  (WIP) inventory will be located
• Select a cell design (next slide) and put into
  place
• Apply operational improvements to reduce batch
  sizes
• Apply process balancing (see slide 43) to smooth
  task times
• - Goal is to get to a batch size of one
  which is termed continuous flow manufacturing or
  one piece flow

45
LEAN TOOLS WORK CELL OPTIMIZATION (cont.)

• How to do it (cont.)
• Design Options for Work Cell Optimization

46
LEAN TOOLS VISUAL PROCESS CONTROLS

• Purpose
• Displays and visual markers that
• Establishes and posts work priorities
• Visually displays whether expected daily, weekly,
  monthly work performance/goals were met or not
• Allows for better understanding of work flow and
  inputs
• Quickly identifies abnormal conditions
• Displays standardized methods in use
• Communicates performance measures
• Displays the status of elements critical to safe
  and effective operations
• Provides feedback to/from team members,
  supervisors, management
• Eliminates or reduces the need for meetings
• When to use it
• Pretty much always

47
LEAN TOOLS VISUAL PROCESS CONTROLS (cont.)

• How to do it
• Production Summary Boards (Takt Boards)
• Monitors the output of a process step or process
  in order to judge if it is meeting customer
  demand
• Takt boards should provide this information
• - The specific work being done
• - The desired speed or completion rate
• - Actual completion rate
• Production Process Boards
• Used to communicate information about an
  improvement project or process improvement
  activities. They should list this information
  relevant to a specific workplace
• Jobs in process
• WIP and its dollar value
• Productivity rates
• Actual vs. desired lead time and output
• Unresolved issues categorized between what the
  work team can handle on its own and what it needs
  help with (and state from whom)

48
LEAN TOOLS VISUAL PROCESS CONTROLS (cont.)

• How to do it (cont.)
• Dashboard Metrics
• Can be used at either the workgroup level or
  corporate wide. CAUTION The higher the level
  that dashboard metrics are used the more complex
  and numerous they become. Metrics should be
  confined to the relevant few and to those things
  that the organizational and its people can really
  do something about. Potential metrics at the
  workgroup level would include
• Rolled throughput yield (RTY)
• On-time delivery
• Weekly takt rate average
• Equipment uptime/downtime, unscheduled
  maintenance time
• Productivity
• Sigma level