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2
Objectives
Understand what Six Sigma and LEAN mean
Understand why both are important to an organization
Introduce the Six Sigma DMAIC and LEAN methodologies
Introduce you to tools you can apply today
3
What is Six Sigma?
Gallup 25th
3.58Gallup 25th
3.58
Gallup 50th
3.93Gallup 50th
3.93 Gallup 75th
4.27Gallup 75th
4.27
People Process Technology
Improved Outcomes
4
Goals of Six Sigma
Improve Performance
Service
• reduce defects• stabilize processes• customer satisfaction
ReduceCosts
• improve efficiency• eliminate waste• reduce cost of poor quality
5
Six Sigma Applications
MotorolaSaved $17 Billion from 1986 to 2004
GESaved $750 million by the end of 1998
Allied Signal/HoneywellInitiated in 1992, saved more then $600 million a year by 1999
FordAdded $300 million to the bottom line in 2001
American StandardSaved $35 million in 2001 through increased quality and efficiency
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Why is a structured methodology needed ?
Examples:
Ready…Fire….Aim Who is to blame? Treating the Symptoms (the Whack-a-Mole Game)
The Six Sigma, data-driven approach is designed to help prevent ...
…jumping to conclusions!
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Define Concept: CTQs
Critical to Quality or a CTQ
Customer’s Voice CTQ
“I want an efficient process”
“I want it to be easy to use”
cycle time (hours)
Number of clicks, Time, others
CTQs must be related to the customer’s voice and be measurable
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Define Concept: Process and Y= f(x)
Definition of Process : a series of actions or operations conducing to an end
THE PROCESS:The Series of Actions
The OUTPUT(s):Ys
CTQsDependent
EffectsResponse
The INTPUT(s):Xs
IndependentCauses
Explanation
Processes are Everywhere !
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Measure Concept: Gathering Process Knowledge
Gather Subjective Knowledge of the
Team
Gather Objective Knowledge of the
ProcessTIME
PR
OC
ES
S K
NO
WLE
DG
EInitial Subjective
Knowledge
Proved some wrong
Proved some correct
+
11
Measure Concept: Measurement Systems
INPUTS Actual Process OUTPUTS INPUTSMeasurement
ProcessOUTPUTS
This is what we WANT to seeThis is what we DO see
What happens when we try to measure something ?What happens when we try to measure something ?
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Measure Concept: Measurement Systems
Do we measure the process the same way as our customers ?
Examples :
– Airline Arrival and Departure
– Full cup of coffee
Does the measurement consider the customer?
13
Measure Concept: Measurement Systems
Variation is real!
Will you always get the same answer measuring the same output a 2nd, 3rd, 4th time ?
Examples :– Timing a recorded 100 meter
dash with a hand held stop watch
– 3 different individuals interviewing a candidate
Is the measurement consistent?
14
Analyze Concept: Using Data to Make Decisions
Processing TimesCenter Avg. Time (hrs)
North 20.5
South 12.7
East 17.5
West 18.5
In 15 seconds : Identify and mark the best and worst
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Analyze Concept: Averages Only – A Re-Look
North
Frequency
232221201918
90
80
70
60
50
40
30
20
10
0
Mean 20.47StDev 1.028N 1000
Histogram of NorthNormal
USL = 24
South
Frequency
4032241680
100
80
60
40
20
0
Mean 13.99StDev 8.718N 1000
Histogram of SouthNormal
USL = 24
North shows NO defects out of 1000 data points
THE BEST !
South shows MANY defects out of 1000 data points
(Approx. 10 %) THE WORST !
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Analyze Concept: Averages Only – A Re-Look
East shows a FEW defects out of 1000 data points
(Approx. 1%)
West shows a FEW defects out of 1000 data points
(Approx. 2%)
East
Frequency
24211815129
90
80
70
60
50
40
30
20
10
0
Mean 17.43StDev 3.026N 1000
Histogram of EastNormal
USL = 24
West
Frequency
25.022.520.017.515.012.510.0
80
70
60
50
40
30
20
10
0
Mean 18.47StDev 2.958N 1000
Histogram of WestNormal
USL = 24
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Analyze Concept: Ask Why 5+ Times!
Complaints about Room ServiceWHY ?
Cold Food delivered by Room Service
Delivery Process was taking too long
Long Delays Waiting for Service Elevator
Heavier elevator use by housekeeping
Housekeeping was frequently restocking towels
Laundry’s washing process was not completed on time
Necessary supplies not available
Vendor shipment was late again
WHY ?
WHY ?
WHY ?
… etc.WHY ?
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Improve Concept: Testing Solutions
England, Late 1800s Frequent stork sightings on roofs of homes with newborn
children Do storks deliver babies? No, homes with newborns were significantly warmer
attracting the storks to the roofs
Research consistently shows as hospital size increases, patient death rate dramatically increases.
Should we avoid large hospitals ?
Might we have missed a large factor (X) … the more severe cases are taken to the large hospitals.
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Improve Concept: What Makes a Good Solution?
Consider the 7 Aspects of Good Solutions
Takes the root cause out of the process
Cost effective
Minimum negative impact on any part of the system
Innovative “Upstream” fix
Employs “Poka-yoke”*
Involves the Customer/Next in Process Recipient
Allows you to meet your performance target
*Poka-yoke – The concept of designing a process so it cannot fail. An example would be “required screens” when entering data in a system. If the fields are not completed, the system will not accept the “enter” command.
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Control Concept : Ensure ongoing success
What measurements are in placeto monitor ongoing performance?
Week beginning
Individual Value
12/17/20
06
11/12/20
06
10/8/200
6
9/3/20
06
7/30
/200
6
6/25
/200
6
5/21
/200
6
4/16
/200
6
3/12
/200
6
2/5/20
06
1/1/20
06
250
200
150
100
50
_X=82.2
UCL=130.6
LCL=33.9
1/1/2006 7/23/2006
5
3
51
222
55
5
1
Process Performance Over Time
21
What is LEAN?
Making the process flow, waste, and results visible
What It Actually Is…
So they can be improved easily
23
LEAN Concept: Value vs. Waste
Value Added ActivityValue Added Activity Non-Value Added Activity
An activity that directly achieves customer requirements.
Something the customer is willing to pay for or perceives as value
Those activities that take time or resources, but do
not directly achieve customer requirements
Non-Value Addedbut Required Activity
Let’s start to determine what’s valuable to the customer to help identify waste in the system.
25
LEAN Concept: Value Stream Maps
1. Mail arrives at mail room
2. Invoices are sorted and
delivered to the processing area
3. Process areas re-sort the mail
and batch invoices
4. Invoices sent to queues
5. Invoice is processed
6. Invoice sent to peer review queue
and reviewed
7. Approval request sent to final approver
8. Final approver approves approval request and sends to processing area
9. Payment sent to vendor
10. Payment waits in posting file
11. Payment posted. Totals
NVA 72 hrs
VE 1 hr
VA 2 hrs
NVA 1 hrs
VE 1 hr
NVA 1.5 hrs
VE 1 hr
VE 24 hrs
VA 4 hrs
NVA 72 hrs
VA 1 hr
NVA 146.5 hrs
VE 27 hrs
VA 7 hrs
Why do we it this way?
Use 5 Why’s.1.
Why do we it this way?
Use 5 Why’s.
2.
Why do we it this way?
Use 5 Why’s.3.
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What you can do right now …
Learn more about the Six Sigma and LEAN
Apply concepts to your daily encounters
- Identify measurable improvements
- Collect “good” data for yourself, and your department
- Analyze more deeply
- Identify / implement “good” solutions
- Develop stronger controls and measures