Integrating Six Sigma and Lean Manufacturing The Challenges & Benefits

Frank Garcia

ADVENT DESIGN CORPORATION

SIX SIGMA or LEAN MANUFACTURINGNeed to lower costs & reduce lead time? Material flow is poor Error rate is high Cant deliver ontime Equipment too slow

Six Sigma or Lean Manufacturing?LEAN MANUFACTURING:

Reduce Lead Time by eliminating waste in the Value StreamProvides the Game Plan and Plays

SIX SIGMA:

Reduce process variationProvides the Play by Play Analysis and Instant Replay

Six Sigma or Lean Manufacturing?LEAN MANUFACTURING:Flow Focused

Lean cannot bring a process under statistical controlSIX SIGMA: Problem Focused

Can not dramatically improve process speed or reduce invested capital

NEED BOTH!

Integrating Six Sigma with Lean ManufacturingIncreases customer satisfactionImproves profitability & competitive positionHas historical integration problemsRequires a different system modelRequires implementation & sustaining plans

Lean Manufacturing SystemGoals areHighest qualityLowest costShortest lead timeAchieved by eliminating waste in the value streamIndustry benchmark: Toyota Production System (TPS)TPS is applied I.E. and common sensePrinciple: organization supports the value adder

Definition of Value -AddedValue is added any time the product is physically changed towards what the customer is intending to purchase.

Value is also added when a service is provided for which the customer is willing to pay (i.e. design, engineering, etc.).

If we are not adding value, we are adding cost or waste.

90% of lead time is non-value added!

Value StreamThe value stream is the set of all the specific actions required to bring a specific product (good or service) through the critical management tasks of any business:1. Information Management2. Transformation

The EIGHT WastesInventory (more than one piece flow)Overproduction (more or sooner than needed)Correction (inspection and rework)Material MovementWaitingMotionNon-Value Added ProcessingUnderutilized People

Six Sigma System A defined management process and CTQ goal (3.4 ppm) 3 sigma is 66,807 ppm!Driven from the topFocused on Voice of the CustomerA data analysis and problem solving methodologyStrong focus on variation reductionSupported by highly trained problem solvers

ScrapReworkWarrantyRejectsUncovering Qualitys Hidden CostsTraditional(Tip of the Iceberg)LostOpportunities

Additional Costs of Poor Quality

Six Sigma Variation ReductionVariation Reduction is Cost ReductionProcess Variation Should be Less Than Specs

Six Sigmas () Focus: Reducing VarianceA process mean tells us how the process is performing while the variance gives us an indication of process control.

What is Six Sigma () Quality?Population mean () or averageWith 6 Quality, approximately 3.4 items in a population of 1,000,000 items would be unacceptable.

Six Sigma System 20% margin improvement12 to 18% increase in capacity12% reduction in number of employees10 to 30% reduction in capital

Improving Profitability A 1 Sigma Improvement Yields..Source: Six Sigma - Harry & Schroeder

Six Sigma Financial Impact Areas: The Savings CategoriesCost Reduction (including cost at standard and costs not included in standard cost)Cost Avoidance (can be difficult to document)Inventory ReductionRevenue EnhancementReceivables Reduction

Six Sigma System Customer centricity: What do they value?Financial resultsManagement engagement & involvementResource commitment: 1 to 3% of staff full timeExecution infrastructure: black & green belts, teams

A culture characterized by..

Six Sigma Problem Solving Steps

ProcessBreakthroughStrategy

The DMAIC CycleDefineImprovePlan-Do-Study-ActMeasure &AnalyzeControlManagement CommitmentPlan-Do-Study-ActTeamsBenchmarkAnalysis toolsID variabilityEmployee InvolvementDesign of ExperimentsSDCASDCASDCA = Standardize-Do-Check-AdjustSix Sigma In Action

Six Sigma ToolsCheck Sheets: Checklists of what is to be accomplished,etc..Scatter Diagrams: A graphical representation between two measurements (variables).Fishbone or Cause and Effect Diagrams: Provides a starting point for problem analysis. Problems are diagrammed into categories of Machinery, Material, Methods and Labor (Manpower).Pareto Charts: A method for organizing errors based on the number of errors created by a particular attribute (ex. Machine, Supplier, Product, Individual, etc.).

Six Sigma ToolsProcess Maps or Flowcharts: Graphical representation of a process or system showing process or product transformation. In other words, what is being done, by who and what choices are being made.Ideally process maps should include cycle times, defect information, etc. FMEAs (Potential Failure Mode and Effects Analysis): A detailed document which identifies ways in which a process or product can fail to meet critical requirements. X-Y Matrix: A ranking method used to prioritize process inputs (Xs) to process outputs (Ys).

Six Sigma Tools - Process Maps or FlowchartsWhat are the Xs (Input variables) at each process step?What are the Ys (Output Variables) at each process step?Remember Y = f (x)Remember Valued Added versus Non-Value AddedRemember Cycle Times and Defects

Traditional Six Sigma Implementation- Who is Involved

Six Sigma Information Flow

The Bad News:Six Sigma Program: Implementation IssuesSome of the facts:

80% of Six Sigma Implementations fail.

Traditional Six Sigma implementations have largely been attempted at large Fortune 500 Companies due to the large investment in people, training and overall support.

Training costs alone for a wave of 25 people can cost $250,000 for this 4 to 6 month training period. Training costs and personnel requirements can overwhelm many smaller organizations.

Need for Six Sigma & LeanQuality, Warranty, and CostCustomers Require Six SigmaCustomers Require Lean ManufacturingCompetitors are implementing Lean & Six SigmaStaying in business

External - Satisfying Customers..

Need for Six Sigma & LeanOperational Cost ReductionImprove ProductivityReduce Scrap and ReworkReduce Inventory & WIPEngineering Design Cost Reduction Define-Measure-Analyze-Design-Verify (DMADV)Stabilize & Quantify Process CapabilityInput for Product and Design Process

Internal - Improving Profitability through..

Lean Six Sigma Model

You Can Apply Six Sigma Techniques to Complement Existing Lean CapabilitiesLean Training & ImplementationVSMInventory Reduction & ControlWaste ReductionProcess variation

Lean Six Sigma Implementation Only Six Sigma or Lean Implemented - big $ savings but money left on the tableSeparate Six Sigma & Lean initiatives competing for best resourcesDifficulty in sustaining the gain

Historical Implementation Problems

Lean Six Sigma Implementation Need to implement in the correct orderPolicy deployment to align business objectives (Flow, Waste & Variation Reduction)Focus on shop floor results, not class room skillsExperienced teachers & coachesStandardized work to institutionalize the gains

Some Solutions.

The Lean Six Sigma Strategy :

Lean 6 is a CHANGE STRATEGY for accelerating improvements in processes, products, and services to improve a companys performance leading to improved financial performance and competitiveness of the organization. Goals:Improved Customer SatisfactionIncreased ProfitsImproved Process Capability by Reducing VarianceIncreased Market ShareSupport Continuous ImprovementSustained Gains for Completed Projects

Lean and the 6 StructureLEAN Manufacturing Practices Problem Solving Yellow and Green BeltBlack BeltM.B.BProblem Solving Team MembersWaste reduction and Continuous Improvement

Functional 6Sigma Team Member. Familiar with toolsProblem solver, assists Black Belt. Working Knowledge of toolsProblem solver,Proficient with toolsProblem solver, Teacher, Mentor. Expert in use of the toolsFULL TIME COMMITMENT25-50%Training Costs- up to $2,500 Week (excludes lodging, travel and salary)

Why Not Rent a Belt (Black, Yellow or Green) Pay for only What You Need to Solve Real Business Problems?Easier for Small Business to JustifyFocused on Solving Companies ProblemsJoint Problem Solving and Knowledge/Skill TransferEasier to Meet Customer Mandates to Use Lean Six Sigma TechniquesProvides Evolutionary Approach to Lean/Six Sigma Implementation and Training

How Do We Use Lean Six Sigma Techniques Get Management commitmentAssess the operation & understand the Process using a Value Stream Map (Product families & Production data)Identify lean improvements & kaizens without automation Implement lean improvements using VSM planIdentify processes requiring Six Sigma analysisAnalyze, eliminate, and control variationStart the cycle again!

The Lean Six Sigma CycleCommitment &AssessmentImplementationPlanRecommendedSolutionsDO IT!Continuous ImprovementSet UpLayoutCellsVisualVariation ReductionInformation SystemsVSM

Understanding the Process: The 1st Step and Foundation of Lean Six SigmaY = f(X)are a functionThe Lean Six Sigma process attempts to control the outputs by controlling the inputs (those Critical to Quality or CTQs)

Value Stream Map An Assessment ToolThe value stream map follows the production path from beginning to end and shows a visual representation of every process in the material and information flows

Shows how the shop floor currently operates

Foundation for the future state

Using the Value Stream Mapping Toolproduct familycurrent state drawingfuture state drawingplan and implementationUnderstanding how the shop floorcurrently operates. The foundationfor the future state. Designing a lean flow

Soak & DryPackagingLabelingCase PackingCartoningShippingIIIIIIC/T = 25 - 65 min.C/O = 10 min.Rel. = 100%C/T = 1 sec.C/O = 5 min.Rel. = 85%C/T = 3 sec.C/O = 2 min.Rel. = 80%C/T = 1 sec.C/O = N/ARel. = 100%C/T = 2 sec.C/O = N/ARel. = 100%up to 250stonesin WIP001 Operator1/2 Operator1 Operator1 Operator1/2 Operator125 Cans of Oil20,640 Round Stones49,000 Shaped Stones 4290Stones90,504Stones VariousCustomersAndrea Aromatics (Scented Oils) New Jersey Porcelain(Round Stones) Alanx(Shaped Stones)30 Cans of OilEvery 2 Weeks59,000 StonesEvery 2 Weeks50,000+ StonesEvery 2 Months (via stringer)Average of 6,000Stones per Dayin Various SizeOrders (8 to 20 case& 200 to 400 caserange mainly)Production Control Randomly PlacedOrders (Various Sizes)Orders Every 2 WeeksOrder as NeededBi-WeeklyProduction ScheduleDaily Shipping Orders11.6 Days65 min.0.7 Days7 seconds15.1 days27.4 Days Lead Time

65 minutes, 7 seconds Value-Added TimeValue Stream Map (Current State) DailyShipmentsExisting Work Cell AmeripackFlow Packager APAIAutomatic StaplerManualManual Multiple Batch Tanks

Soak & DryPackagingLabelingCase PackingCartoningShippingIIIIIC/T = 25 - 65 min.C/O = 10 min.Rel. = 100%C/T = 1 sec.C/O = 5 min.Rel. = 85%C/T = 3 sec.C/O = 2 min.Rel. = 80%C/T = 1 sec.C/O = N/ARel. = 100%C/T = 2 sec.C/O = N/ARel. = 100%up to 250stonesin WIP001 Operator1/2 Operator1 Operator1 Operator1/2 Operator75 Cans of Oil40,000 Round Stones25,000 Shaped Stones 4290Stones30,000Stonesin a supermarkettype arrangementwith stocking levelsby shape and scent VariousCustomersAndrea Aromatics (Scented Oils) New Jersey Porcelain(Round Stones) Alanx(Shaped Stones)12 to 16 Cans of Oil Once aWeek30,000 StonesOnce a Week25,000 StonesOnce a Month (via stringer)Average of 6,000Stones per Dayin Various SizeOrders (8 to 20 case& 200 to 400 caserange mainly)

Production Control Randomly PlacedOrders (Various Sizes)Orders Every WeekMonthly OrderBi-WeeklyProduction Schedule(large orders)Daily Shipping Orders10.8 Days65 min.0.7 Days7 seconds5.0 days16.5 Days Lead Time

65 minutes, 7 seconds Value-Added TimeValue Stream Map (Future State) DailyShipmentsExisting Work Cell AmeripackFlow Packager APAIAutomatic StaplerManualManual Multiple Batch Tanks4 Cases IncreaseReliability

Questions to Ask About the Value Stream Is the step valuable?Is the step capable? Is the step available? Is the step adequate (capacity)?Is the step flexible?

Lean ManufacturingConcepts & TechniquesFlow: Setup Reduction, Cellular Manufacturing, Batch Size Reduction, Visual Workplace, Layout

Pull: Kanban Systems, Supply Chain Management, Point of Use

Perfection: Quality Systems including variation reduction, Training

Road Map to Lean Six SigmaLean to improve flow and reduce inventory & lead time Six Sigma for Process Variation in Value Stream

Stamping

DegreasingDrying

Packing

Shipping

I

I

I

I

Run: 200-600pcs/minC/T = .003 min/pc.

C/O = 4.5 hrs.

Available: 590 min/shiftRel. = 90%

C/T =10 hrC/O = NoneRel. = 80%

2 Hours

1 Operator

Shipper

50 to 70Racks

100 to 125Coils

20 to 40 Bins

1 Dayto12 Weeks

VariousCustomers

Brass (40%)4 Weeks LT

Beryllium Copper (30%)6 Mos. LTIn Stock- 1 Week

Phosphor Bronze(30%) 10 Week LT6 Weeks Reroll

Every Week

Every Week

Every Week

Average of 1 mm pcs per dayin Various SizesOrders (2 to 13)

Omega PrecisionProduction ControlVista Software System

Randomly PlacedOrders (Various Sizes)

Projected requirements

Order as Needed

Weekly Production Schedule PressroomManager

Weekly ShippingList

10 Days

1.5day(avg)

2 Days

2.25 Days

1 Day to 12 Weeks

16.75 Days Lead Time+ coil lead time per average order3.75 Days ValueAdded Time

Value Stream Map (Current State) Stamping Orders With No Plating or Heat Treatment(Potential Future State Changes in Red)

DailyShipments

1 unit

Manual

11 Stamping Presses

6 Operators

10 to 24 coils3 times/week

Average order = 208,000 pcs252,000 strokes

Standard Timefor SetupAdjustment

SetupTime

Visual Statusof Presses

SankyoCoil Feeds

ReduceCycle Time

Layout isa Problem

AutoBagging

FormalProductionControl

Single Pointof Control

2 Baskets - Strip1 Basket - Pieces

C/T = 2 Hr Strips Max 1000/Basket Min 200/Basket = 30 Min Pcs. 25,000 Pcs/BasketC/O = NoneRel. = 95%

Combine?Lot Control ImprovementHandling Reduction

Review WorkSchedule withSuppliers

Pre-Control forRoll Changes

Low Productivity Electrical Device AssemblyThe Challenge in Two StepsClient wanted wave soldering and robotic pick and placeFunctional operational layoutReject rate 5 to 8%Extensive material stagingNo spaceInitially, 13 people in Aurora cellLow output: 300 units/day

Lean Six Sigma Techniques UsedProcess mapping

Cellular Manufacturing & Layout

Balance Cycle Times Between Work Stations

Reduce Batch Size & parts staging

Quality Data Collection & Analysis (Reduce Reject Rate)

Cellular Assembly Layout

Cell ChangesASSEMBLY#1COLD STAKETEST PCBsCONTACTSASSEMBLY&SOLDERBUTTON &BATTERYASSEMBLYLABELATTACHBACKCOVER,STAKESTRAP &ATTACHSTRAPTESTSAMPLESGLUESWITCH/ATTACHSTRAPPACKREJECTDATAAFTER CHANGES WORKSTATION CYCLE TIME: 25sec., 1.25 min. PER 3 UNITSPCBs fromsupplier

INSERTSWITCHACTIVATORREJECTDATA123456

Lean Six Sigma Changes Cold staking fixtures

Powered screw drivers

Light test & Soldering fixtures

Quality data tracking via % defect control chart (p chart)

With Lean Six SigmaThe Results Balanced cell at 24 sec per work stationTwo U-shaped cells3 piece flow1000 units/day per cell vs 3006 people per cell vs 13Faster identification of quality problemsOperating at 5 to 6 sigmaBetter teamworkNo backlog

Reducing Lead Time & Improving Quality Steel Panel FabricationThe Challenge Client wanted to reduce lead time to less than one weekAutomated equipment had been installed but had problemsPanel rejects & rework (5%)Material flow problemsFew process controls or data collection

ShearNotch Corner PunchStake & LabelBendShipping IC/T = 4 min. C/O = N/ARel. = 99% C/T = 2 min. C/O = 4 min Rel. = 95%C/T = 2 min.C/O = up to 30 min.Rel. = 99%C/T = 2 min.C/O = N/A Rel. = 99% C/T = 5 min. C/O = 30 to 60 sec. Rel. = 90% 1 Operator1/2 Operator 1 Operator 2 Operators1/2 Operator Various Distributors(~ 24 for Smith Corp. &~ 6 for Jones SystemsSheet GalvanizedSteel (4 by 8 or cut)Up to an averageof 130,000 lbsdaily in peakseason Production Control(normally working24 to 48 hours ahead ofpromised shipment)Randomly PlacedOrders (normallysingle unit orders)Blanket Annual PurchaseOrder with Daily Releases 2 to 5 days 4 min.2 to 5 Working Days, Lead Time

32 minutes, Value-Added TimeValue Stream Map (Current State) DailyShipments1/2 OperatorAdd Z Brace C/T = 7 min. C/O = N/A Rel. = 98% to 99%1/2 Operator 2 min. 2 min.5 min.2 min. 7 min.DailyProductionReports Daily Shipping ScheduleRack1 MaterialHandlerDailyProductionReportsAverage volume of 1000systems per month in peakseason.Customers are mainlydistributors. There are afew dealers. C/T = N/A C/O = N/A Rel. = 100%Radius & Band C/T = 8 min. (average) C/O = 2 to 30 min. Rel. = 80% to 100% 2 Operators 8 min.Sheet Galvanized Steel (4 by 8 or cut)

Sheet Galvanized Steel (4 by 8 or cut)

Sheet Galvanized Steel (4 by 8 or cut)

2 to 5 daysdependingon pre-cutsize1 AccurshearAutomatedShear (P-3)1 ManualNotcher (S-23)& 1 AutomatedNotcher (R-3) 3 Semi-Auto Punches (S-1, S-2, & S-3) 1 ManualBrake (R-7)& 1 AutomatedBrake (R-13) 1 AutomatedMachine (R-8) 1 AutomatedMachine (ACR) 1 Manual Table,1 Jig-lessMachine (R12),& 1 Jig Machine(R1) Specialty PunchC/T = 2 min.C/O = N/ARel. = 99% 0 Operators 2 min. 4 Semi-Auto PunchesIn StraightPanel Dept.

Lean & Six Sigma Techniques Used

Value Stream Mapping

Process flow diagrams

Setup time Analysis

Quality Data Collection & Analysis (Reduce Reject Rate & Variability)

Rack1 MaterialHandler C/T = N/A C/O = N/A Rel. = 100%Radius & Band C/T = 8 min. (average) C/O = 2 to 30 min.Reject rate = 5% Rel. = 80% to 100% 2 Operators 8 min. 1 Manual Table,1 Jig-lessMachine (R12),& 1 Jig Machine(R1)Improve reliability and changeovercapability of R1 and R12 machines.Reduce panel reject rate.

Work to 1 to 2 days lead time

INITIAL IMPROVEMENT CONCEPTS2 to 5 Working Days, Lead Time

6 Foot Long Custom Radius Panel Fabrication Partially finished panels are stocked insixteen different configurations. Panelsare finished to order. Work is done inthree different areas as noted. RawMaterial Stock 14 Ga. Galvanized Steel(pre-cut 53-15/16 by 63-15/16 sheets)Notch& Punch(TrumpfMachine)ShipBend& StakeAdd Z Brace(s)(if required)LabelRadius& Band(R12 - JiglessMachine) WIP Stock 16 Different Panelswith Various CutoutsTrumpf AreaCustom Panel Dept.Straight Panel Dept.PanelMaterialRackRawMaterial Stock 11 Ga. Galvanized Steel(4 by 8 standard sheets)Shear& CutBandMaterial

Process ImprovementsSeparating Process & Machine IssuesCommon setup procedureReplace measurement gagesEstablished process capabilityImplemented process controls for panel dimensionsIdentified realtime data requirementsCompleted identified maintenance actionsImplemented PM program

Why Lean Automation?After implementing lean improvements such as cellular manufacturing and setup reduction, selective automation can add value and reduce human variability.

Richard Schonberger, June 2002

New Radius Bending Machine R13 Automated band cutting Servo driven adjustments from panel bar codes Online radius measurement and tracking

R13 Capabilities After Lean Six Sigma

Operates as a cellRuns two product familiesChangeover in less than 5 sec. within and between product familiesCycle time reduced from 5 min. to 1.8 min.Realtime auto check of each panel with data collectionOperating at 6 sigma

As lead time decreases.. the need for realtime data increases!Lean Six Sigma in the Fast Lane!

Automation Provides Realtime Data to Control Variation for Six SigmaEnhances Define-Measure-Analyze-Improve-Control methodology (DMAIC)

Online measurement of process parameters

Direct data input into control charts

Provide realtime controls as control limits are understood

Process Control

R13 Process Controls & System Status

Realtime Data Collection for Six Sigma AnalysisDiagnostics for Rapid Identification of Problems

Realtime Data From R13

Sheet1

Index Count V2022Target Chord Height V2030Top Chord Height V2046Bot. Chord Height V2066Delta Top / Bot. V2032Top Dev. V2050Bot. Dev. V2070Bend Angle Offset V1610Bend Angle Factor V1612Bend Factor Top V1614Bend Factor Bot. V1616Panel Radius (Feet) V1706Panel Length (Inches) V1710Cycle Time V2014RemarksTemplate Dev. TopTemplate Dev. Bot.Inspect Dev. TopInspect Dev. Bot.Inspect Delta (Bot.-Top)Template Delta (Bot.-Top)

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114.05114.59314.8980.3050.5430.8480.0001.3250.7950.9514.00075.375139.5formula

214.05114.08913.9470.1420.039-0.1040.0001.3250.7810.8804.00075.375132.9general, using values from 3'R

314.05114.00813.7480.259-0.043-0.3020.0001.3250.7810.8804.00075.375131.7

414.05114.01413.8030.211-0.036-0.2480.0001.3250.7810.8804.00075.375131.6

514.05113.96013.6520.307-0.091-0.3980.0001.3250.7810.8854.00075.375132.4

614.05114.05513.8440.2110.005-0.2070.0001.3250.7810.9004.00075.375132.0

714.05113.82413.8170.007-0.227-0.2340.0001.3250.7810.9054.00075.375132.3

814.05113.79613.8240.027-0.254-0.2270.0001.3250.7810.9104.00075.375132.0

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1714.05114.10314.1180.0150.0520.0670.0001.3250.7980.9224.00075.375133.0

1814.05114.08914.0970.0080.0390.0470.0001.3250.7980.9224.00075.375131.4

1914.05114.17814.1040.0740.1270.0540.0001.3250.7980.9224.00075.375131.0

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3114.05114.08914.1180.0290.0390.0670.0001.3250.7970.9214.00075.375131.2

Sheet2

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How Do We Use Lean Six Sigma Techniques Get Management commitmentAssess the operation using a Value Stream Map (Product families & Production data)Identify lean improvements & kaizens without automation Implement lean improvements using VSM planIdentify processes requiring Six Sigma analysisAnalyze, eliminate, and control variationStart the cycle again!

Lean Six SigmaOperating costsProcess speed(lead time)

Inventory & invested capitalQualityCustomer satisfactionOperating flexibilityMethodology that maximizes shareholder value by achieving the fastest rate of improvement in..

Contact Information

Advent Design CorporationCanal Street and Jefferson Ave.Bristol, PA 19007

www.adventdesign.com800-959-0310

Frank Garcia, Director Engineering Servicesfrank.garcia@adventdesign.com