Industrial Regulation and Quality CHMG 751

1. Industrial Regulation and Quality CHMG 751 Manhattan College Fall 2012 Lean Six Sigma

2. Agenda • Quality Improvement Methodologies • Lean Six Sigma: Define, Measure • Next Lecture

3. Lean Six Sigma(Operational Excellence)

4. Roles in OE

5. Lean Defined A way to understand “value” from the viewpoint of the customer and eliminate activities that don’t add value A methodology to create a continuous flow of value-adding activities, pulled by the customer LEAN

6. 2. Define the Value Stream 1. Specify Value 3.Create Flow 5. Strive For Perfection 4. Create Pull Lean Principles: Provide the Vision Eliminate “Waste”

7. Six Sigma Defined A data driven approach to understanding process variation A standard problem-solving methodology Define Measure Analyze Improve Control

8. Six Sigma Defined Is the Target for a truly high quality process 3.4 Defects per Million Opportunities Near Perfection!!!

9. Six Sigma and Lean are Two Approaches to Process Improvement that Work Together Six Sigma Improves the process by reducing variation in key steps X Lean Improves the process by solving problems with process flow Lean Improves the process by eliminating non-value added activities and steps. OE = Lean / Six Sigma

10. Project Management

11. The Project Life Cycle – Two Points: • First, the phases usually overlap • Second, there is alignment with DMAIC Execution Level Of Activity Planning Closing Initiation Control D M A I C Project Start Project Finish TIME Overlap of Phases in the Project Life Cycle

12. What are we looking for in a project? • A manageable, well defined project that will reduce the Non Value Added steps to the customer, or optimize a desired process output and have positive impact to the organization • A strategically aligned project that can be completed in a reasonable time • Lean/Kaizen Project/Yellow Belt: 1-5 days, local resources • Green Project: 3-6 months, with a reasonable amount of resources • Black Belt Project: 6-8 months, with larger business impact, typically cross functional teams

13. What Is the Focus of OE (LSS)? • Facilitation of business process optimization • Improving customer satisfaction • Improving process quality and product quality simultaneously • Reducing the cost of poor quality (COPQ) • Create a common language for defining waste • Process optimization • Improving employee morale • Enhancing workplace safety • Enhancing compliance

14. Resources / What Conceals COPQ?

15. Hard Savings Well defined savings Budget impact known Hard savings have direct impact to the “bottom line” (P&L statement) at a known time Soft Savings Savings estimate Budget impact deferred Soft savings are forms of hard savings, but the exact time when they will be realized is not known Soft Savings results are opportunities for management to adjust future ABP development COPQ Defined

16. HARD SAVINGS Reduction in: Unit cost of operations Unit cost of production Transaction cost Overhead cost Transportation costs Headcount Increased: Throughput (yield), resulting in increased sales or profit SOFT SAVINGS (potential) Reduction in: Cash outflow Demand on manpower Need for working capital (inventory) Increased: Safety in the workplace Employee satisfaction/turnover reduction Customer satisfaction Throughput (yield) per unit time, resulting in an increase in available capacity Avoidance (Loss of Bus./CapEx): Capacity enhancements/rehabs Conformation/Compliance to changes in the law/regulation COPQ Classifications

17. Why do we want to reduce the COPQ? Price = Cost + Profit Profit = Price – Cost Is improvement only about money? Transitioning To…

18. Define

19. Lean Six Sigma Methodology • Project Charter • SIPOC Analysis • Voice of the Customer • Product Family Define Measure • Current State Value Stream Map • Data Collection & Operational Def. • Data Measurement Tools: Process Mapping, FMEA, Sampling, Minitab, Gage R&R, Patterns, Stratification, Process Capability Analyze • Future State Value Stream Map • Creating Flow: • Select the Loop • Data Analysis Tools: Cause & Effect Diagrams, Hypothesis Testing, Regression Analysis, Time and Work Analysis • Evaluate Equipment • Generating, Evaluating, & Selecting Solutions • Design Cell Layout • Determine Staffing • Plan the Operation • Plan the Implementation • Implement and Debug • Control Charts • Continuous Improvement • Project Closure • Kaizen Workshop Improve • Standardized Work • 5S & Visual Workplace • Ergonomics • Mistake-Proofing Control

20. Define: What is the problem? “A problem well defined… … Is a problem half solved.”

21. Six Sigma Lean • Set Project Goals and Boundaries Based on Needs of the Business, the Customer, and the Process • Project Charter • SIPOC • Voice of the Customer • Critical-to-Quality (CTQ) Tree • Select and Begin Defining the Project Value Stream • Product Family Matrix Define Define Objectives and Tools

22. Proper Scoping is Critical • Good Lean Six Sigma projects & improvements differ in size and complexity: • Yellow Belts facilitate local improvements (quick changes) • Green Belt projects typically completed within 3-6 months • Black Belt projects are typically cross-functional and take 4-9 months • Yellow Belts facilitate continuous improvement efforts by making many smaller improvements, controlling processes, and identifying the need for higher level improvement project work. Scoping is the art of balancing ambition with realism

23. Project Charter

24. Purpose of a Project Charter • How many have had experience using a charter? • When and/or why would you need a charter? • Was it – or would it be – useful… and why?

25. Elements of a Charter • Problem Statement • Measurable Goals/Objectives • Defect Definition • Business Case • Project Scope • Roles/Resources • Schedules/Deliverables What problem is to be solved? What resources will be needed? What benefits are expected? When? By whom? The initial project charter is done at a high level. After mapping and data collection, the charter is updated with more specific information

26. We are weak here! Problem Statement • A good Problem Statement answers: • What problem is being addressed? • What • Where • When and/or How Often (Can be revised after Measure) • The “Effect” or “Pain” • Example: “During the past 12 months (when), the cycle time for investigations at Plant XYZ (where) exceeded the 30 day target (what) 22% (how often). This results in more rework and longer manufacturing lead times (effect/pain)”

27. Establishing Goals and a Baseline Each project should have a set of SMART goals Specific Measurable (often the weakest point) Achievable Relevant Timely To establish goals and a common frame of reference, collect baseline data (ideally, last twelve months’ worth)

28. Primary Reduce Lead Time Secondary Maintain Costs, or even improve Maintain Product Quality, or even improve Metrics

29. Yellow Belt Improvement Example • Problem • Rework in the release testing laboratory has increased from an average of 5% to 10% over the past quarter causing increased lead times and additional labor hours to release product. (Improvement opportunity). • Scope • Laboratory Release Testing (area where Yellow Belt works) • Expected Benefits • Increased predictability of lead times for laboratory testing (Right First Time) • Increased working capacity in laboratory (by reducing rework) • Potential Yellow Belt Tools / Approach • SIPOC (Supplier Inputs – Process – Outputs to Customer) • Customer Requirements (Internal Customers; i.e., QARR, PPU) • Process Identification (Mapping, Value Added/Non-Value Added) • Fishbone • Data Collection • Pareto • Mistake Proofing • Control Plans Note: Consult with local Green Belt / Black Belt to help with complex issues that may arise.

30. Stakeholder Analysis

31. Stakeholder Analysis: Why Use It? • Identify all the stakeholders • Determine who is onboard and who is not • What are their concerns, attitude and needs? • Allows the team to understand what they must do to be effective • Allows the project team to understand the relative importance of the stakeholders impact

32. Stakeholder Analysis: How to Read? • Draw circles around people or groups that you believe will be supportive. • Keep on the upper half of diagram • The further the circle is located from the center the less impact to the project Dir A List of people or groups that the team is unsure of their position Dir C Project Title VP I.M. In-charge? Dir B • Draw squares around people or groups that you believe will resist. • Keep to bottom half of diagram

33. Stakeholder Map: Example Note: This map was updated to reflect positions at the end of the project

34. SIPOC

35. SIPOC: High Level, Expand Beginning with the Customer VA NVA Value Stream Map: Customer to Supplier for Company, Facility, Process, or Product Family Customer Inputs Process Outputs Supplier Detailed Process Map: Focus on Activities & Steps for One Process Mapping Tools to Define the Process Boundaries

36. SIPOC: Definitions SUPPLIERS (S): the people or organization that provides information, material, and other resources to be worked on in the process Inputs (I): the information/materials provided by suppliers that are consumed or transformed by the process Process (P): the series of steps that transform the inputs Outputs (O): the product or service used by the customer Customer (C): the people, company, and another process that receives the output from the process

37. SIPOC Example: Packaging of Robitussin

38. Product Family Matrix

39. The Purpose of a Product Family Matrix to Define Where We Work 4. Plan andImplement 1. Select aProduct Family 2. Draw theCurrent State 3. Design theFuture State The most effective unit for scoping an improvement project Design a Lean flow Understand how the value stream currently operates

40. Our Facility What Is a Product Family? • Product Family: a group of products that use the same or similar processing steps and equipment within the selected process • Product Families are the most effective unit of analysis for Value Stream Maps

41. Identify Product and Process Steps Rearrange Find Families Process Steps and Equipment Process Steps and Equipment 1 2 3 4 5 6 7 1 2 3 4 5 6 7 A X X X A X X X B X X X B X X X X C X X C X X X Products Products D X X X X X D X X X X X E E Developing the Matrix Products do not have to have exactly the same process to be in the same family but should have at least 80% of the processing steps in the family.

42. Example Product Family Matrix

43. Voice of the Customer (VOC)

44. What Is the Voice of the Customer? • Voice of the Customer (VOC): What the customer needs and how well the product meets those needs from the point of view of the customer

45. CTQ Critical To Quality (CTQ’s) Product/Service Characteristic Customer Wait Time CTQ’s are the translation of customer needs into quantified requirements for our product/service Measure Call Hold Time (seconds) • Customer Need: Quick Response • Business Strategy: Lean Six Sigma Performance Target/ Nominal Value 60 seconds Specification Limits 90 seconds Allowable Defect Rate <3.4 DPMO

46. Specification for each CTQ Need Drivers CTQs On-line catalog up to date and correct Accurate orders Pull-down menus on order form match on-line catalog Item number and price Correct links to order form Orders picked correctly Orders picked up within 5 min Timely and accurate order fulfillment Bin numbers match item numbers Quick delivery Orders shipped within 2 hours Order received next bus day General Specific Hard to measure Easy to measure Example: CTQ Tree

47. Example: CTQ Tree (RPPU Real Time Release)

48. Spaghetti Diagram: Why Use It? • Shows the actual path taken by a product or piece of equipment through the process or value stream • Very effective in communicating the real distances travelled and the complexity of the process as the product or piece of equipment travels through the value stream

49. Spaghetti Diagram: Example

50. Define Review