identifying and eliminating non value added...

Identifying And Eliminating Non‐value added activities

John Dennis PMPLean Six Sigma Master Black Black Belt

Lean Six Sigma Training Ltd

2017 © Lean Six Sigma Training LtdIdentifying and Eliminating Non-Value-Add 2

Lower Value Higher Value

Customer

Inputs OutputsOperations

Increase Value

Increasing

Value through

the Process

Traditional View of Our Processes

Raw MaterialsRaw DataManpowerEnergy

Finished GoodsRefined MaterialsInformation Servicesetc


Wouldn’t it be nice if it was that easy !


Customer

WasteIncreasin

g Value

through the

Process

Inputs OutputsOperations

What our processes actually look like

Wasted Time

Wasted Raw Materials Scrap

Wasted Customers

WastedSpace

WastedIdeas Wasted Data

2017 © Lean Six Sigma Training LtdIdentifying and Eliminating Non-Value-Add

Value Add vs Waste ( muda)

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Business Value-Add Customer Value-AddPurity of Product

Availability of Product

Packaging of Product

Reputation of Company

Ethics of Company

Service of Company

Equipment Maintenance

Training of Employees

Health and Safety

Intellectual Property

Business Intelligence

Supplier relationships

Outputs

Would your CEO pay for it ? Would your customer pay for it ?


Value-Add vs Waste

Definition in Lean Six Sigma :

Anything that does not contribute to adding VALUE to either your Customer or your Business

Is called WASTE !!

The Japanese call it … MUDA

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Taiichi Ohno

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Taiichi Ohno architect of the TOYOTA PRODUCTION SYSTEM

‘‘…people often talk ‘ about ‘the seven types of waste’. This might have started when the book came out, but waste is not limited to seven types.There is an old expression : ‘He without bad habits has seven’, meaning even if you think there is no waste you will find seven types.So I came up with Overproduction, Waiting etc., but that doesn’t mean that there are only seven types.So don’t bother thinking about ‘what type of waste is this?’

Workplace Management' by Taiichi Ohno (1982 )

Re-Think the 7 Wastes !


Eliminate Waste

DEFECTSWastes

Non-Essential PROCESSING

INVENTORY TRANSPORTATION

OVERPRODUCTIONMOTION

WAITING

Employee UNUSED CREATIVITY

#8


Wringing the towel

‘Lean thinking’ believes that many organizations are like a very wet towel, full of waste, that needs to be ‘Wringed Out’ and removed.

.

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The more we examine our processes for waste,the more waste we find….and the wasteful activitiesand actions should be removed


Value flows horizontally to the customer

• ‘Horizontal’ Cross

Functional Processes

• EXTERNALLY FOCUSED• Link

Operational Processes

& • Cross

Organizations Boundaries

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“Vertical“ Operational Processes ( Operations)INTERNALLY FOCUSED

WastedTime

WastedCommunications

WastedMotion


Value flows across organisations

•

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“ Go See, Ask why, Show respect “


The GEMBA Walk to look for Waste

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Fujio Cho, is honorary chairman of Toyota Motor Corporation. ( 2015).


7 QUALITY TOOLS

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Value Stream Maps


COPQ

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Cost of Poor Quality(COPQ)


COPQ

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“Defects are not free !

‘Someone makes them and gets paid for making them’

W. Edwards Deming

…Someone also gets paid for finding them, and preventing them ….

…and if you don’t find them first, and they go to your customer, then they are going to cost you a lot more in future lost sales,

warranty costs, fines, customer service calls etc etc


COPQ

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• COPQ measures the financial impact of the waste in your processes

• COPQ is a symptom of problems with your processes– Lean 6 sigma Projects fix problems with intent of

improving symptoms.


COPQ

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“In most companies the Costs of Poor Quality run at 20 to 40 percent... In other words, about 20 to 40 percent of the companies’ efforts are spent in doing things that went wrong because of poor quality”

Planning for Quality, Joseph Juran 1988, pg. 1

‘’The COPQ range varies from less than 1 percent for companies who have truly achieved "Six Sigma,” to about 15 to 25 percent for companies that are at the four sigma level and about 25 percent to 40 percent of revenue for companies that are at three sigma levels.’’

Success through Quality (ASQ Quality Process, 1st edition, 1998), Timothy J. Clark


COPQ - Categories

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External Failure Costs• Warranty Costs• Customer Complaint Related Travel• Customer Charge Back Costs

Prevention• Error Proofing Devices• Supplier Certification• Design for Six Sigma• Training

Detection• Supplier Audits• Test input materials• Inspections• Test output product

Internal Failure Costs• Scrap• Defects and Rework• Rejects• Repairs• Troubleshooting costs


COPQ - Iceberg

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ReworkExcess InventoryWarranty Costs

Rejects

Lost sales

Hidden Expenses

Hidden WASTES(Soft Costs / Intangible Costs)

Visible WASTES(Hard Costs / Tangible Costs)

Lost Customer Loyalty

Lost Employee Moral (less obvious)

Scrap

Hidden Rework


Notes:

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Waste (Muda)Waste (Muda)


Look for Waste

– Defects (Rework / Correction / Rejects / Scrap )

– Overproduction

– Waiting

– Non-essential processing (Over processing)

– Transport (Conveyance)

– Inventory

– Motion– Employee Unused Creativity

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DOWNTIME

Always be looking for Waste ! Identify & Eliminate its root cause


Overproduction

Overproduction is producing more than the next step needs or more than the customer buys.

– It may be the worst form of waste because it contributes to all the others.

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Waste of Overproduction relates to the excessive accumulation of work-in-

process (WIP) or finished goods inventory.


Defects , Rework , Scrap

Defects, Rework and Correction, Rejects and Scrap

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• Accept no defects• Create no defects• Pass no defects

Scrap


Inventory

Inventory waste is the cost of materials that are bought, invested in and not immediately sold or used. Also includes the waste of storage space and loss of perishable goods.

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Too much Inventory Hides Problems

Suppliers’Issues

Machine Downtime

Quality Problems

Long Setups

ProductivityProblems

Processes Not Capable

Imbalanced Lines

Maintenance IssuesLack of

Teamwork

Inventory Level

Inventory is like a river, when water level is lowered, boulders have to

be dealt with.

Reducing inventory levels brings problems to the surface and forces their resolution.

Inventory


Motion

Motion is the unnecessary movement of people and equipment.

– Also includes unnecessary bending, stretching , turning– Includes looking for things like documents or parts as well as

movement that is straining or unecessary.

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Time and Motion Studies / Ergonomics are used to reduce unecessary motion

‘ Only the last turn on a bolt tightens it. The rest is just

movement ‘ Shigeo Shingo


Time and Motion Studies

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Time and Motion Studies / Ergonomics are used to to reduce unecessarymotion and fatigue / stress on workers and thus increase productivity.

The first of these studies were carried out in the 1890’s by Frederick Taylor and Frank Gilbreth in the USA

1898 F.W. Taylor : Famous experiment at Bethlehem Steel on hauling IRON bars


Overprocessing

Non-Essential Processing / Over Processing

• Over-complicating a process, too many steps etc.

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• “Gold Plating” your service

• Providing more than a customer asks for, expects or needs


Transport Waste

Transport WasteThe unnecessary movement of material and goods.– Steps in a process should be located close to each other so

movement is minimized.

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Waiting

Waiting is nonproductive time due to lack of material, people, equipment.

– Can be due to slow or broken machines, material not arriving on time, etc.

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Queuing is a symptom of the waste of waiting


Poka Yoke to Reduce Waste

Poka Yoke is a ‘Containment Strategy’ to prevent errors and defects reaching the customer

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Poka Yoke : Capability vs Containment

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1 2 3

1

2

3

‘’You must build containment into your Processes’’ Shigeo Shingo

ContainmentC

apab

ility


Poka Yoke example

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Poka Yoke Examples

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Andon


SMED to reduce waste

SMED = Single Minute Exchange of Dies

• Quick changeover and new setup. The faster the changeover times, the less downtime of equipment.

• The SMED system is a set of techniques that make it possible to perform equipment setup and changeover operations in fewer than 10 minutes … in other words, in the single-minute range.

• SMED principles can be used and applied in almost any operation or process. ( It was originally developed to improve die and machine tool setups.)

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SMED to reduce waste

Observe the current process.1. Separate INTERNAL and EXTERNAL activities.

This is perhaps the most important concept behind SMED.

Internal activities are those that can only be completed when the machine or process in question is not running. You cannot, for example, change the bit on a running drill.

External tasks are those things that can be done while the machine or process is running. For example, you may be able to knock out the paperwork required, gather tools and materials, and essentially get everything you need ready before the machine or process stops

Plan all the External tasks to be completed BEFORE the machine is stopped or AFTER the machine is started again.

2. Streamline the remaining internal activities to make them as fast and efficient as possible.

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SMED example

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F1 Pit Stops 1950 vs 2013: Quick Changeover / SMED

https://www.youtube.com/watch?v=UlIGI3laGAo


The Waste of Constraints

Waste Caused by Constraints ( Bottlenecks) in your process

The Theory of Constraints :

‘’Spending time and money on any operation in a process that is not the constraint will not improvethe overall throughput of the process.’’

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Use Kaizen to reduce Waste

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Kaizen : The Key to Japan’s Competitive Success : 1986. Masaaki Imai

Reducing Waste…


The End

Thank You for listening.

Any Questions ?

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