Six Sigma, Lean, Just-in-Time, International Quality Standards and Awards

1. Six Sigma, Lean, Just-in-Time, International Quality Standards and Awards Quality Management

2. Sig Sigma Quality Management

3. Six Sigma • Six Sigma is a business management strategy, originally developed by Motorola, USA in 1986 • Six Sigma is making breakthrough improvements to processes to efficiently provide customers with products and services they want and need. Quality Management

4. Six Sigma • Six Sigma was heavily inspired by the quality improvement methodologies of the six preceding decades, such as Total Quality Management , based on the work of pioneers such as Deming, Juran, Crosby, and others. Quality Management

5. Six Sigma • Six Sigma is based on following cornerstones • Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of vital importance to business success. • Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled. • Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management Quality Management

6. Six Sigma • What makes Six Sigma different from other TQM initiatives: Quality Management

7. Six Sigma • What makes Six Sigma different from other TQM initiatives: • Improvements are structured as projects • Six Sigma process steps (DMAIC) are followed rigidly • A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. • A special infrastructure of "Champions", "Master Black Belts", "Black Belts", "Green Belts", etc. to lead and implement the Six Sigma approach. • A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork • An increased emphasis on strong and passionate management leadership and support Quality Management

8. Six Sigma • As of 2006 Motorola reported over US$17 billion in savings from Six Sigma. • Other early adopters of Six Sigma who achieved well-publicized success include Honeywell and General Electric, where Jack Welch introduced the method. • By the late 1990s, about two-thirds of the organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality Quality Management

9. Six Sigma • A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defects per million) Quality Management

10. Specification Limits Specification Limits are applied to individual measurements. LSL USL • Specification limits are decided by people. • Control limits are determined by the data (voice of the process). Quality Management

11. LSL USL Cp = 1 3 3 LSL USL Cp =1.33 4 4 USL LSL Cp = 2 6 6 Cp Index Demonstrates Potential Capability Cp = (USL – LSL)/ 6s • Cp is the ratio of Total Tolerance to the 6 Process Spread. • It shows how capable the process would be if it were perfectly centered. • Cp = Potential Capability This is a “Six Sigma” process. Quality Management

12. Characterize Existing Process Optimize the Process! Six Sigma Breakthrough Strategy Recognize Opportunity for Improvement Define Measure Analyze Improve Control Integrate into Daily Work Quality Management

13. Define Identify what’s important to the customer. Define project scope. 1 Measure Determine what to measure (Y) and validate the measurement system. 2 Quantify current performance and estimate improvement target. 3 Analyze Identify causes (Xs) of variation and defects. 4 Provide statistical evidence that causes are real. 5 Improve Determine solutions (ways to counteract causes) including operating levels and tolerances. 6 Install solutions and provide statistical evidence that the solutions work. 7 Control Put controls in place to maintain improvement over time. 8 Provide statistical evidence that the improvement is sustained. Quality Management 9

14. Critical-to-Customer (CT) Characteristics CTQ: Critical to Quality(or Function) CTD: Critical to Delivery (or Timeliness) CTC: Critical to Cost • As quality improves, timeliness improves (less downtime, scrap and rework). • Timeliness can be improved further by eliminating waste to achieve lean material flow. • Cost means “cost to the customer”, not internal costs. • Six Sigma teams should strive to provide product to customers in a way that can improve the customer’s costs. • Most Six Sigma projects focus on CTQs… reducing variation and improving the quality of the process output. Quality Management

15. Cause vs Effect Quality Management

16. Find the Critical x’s Y = f(x) Golf Score • Position of hands • Feet position • Elbow position • Lateral plane • Club length • Weight shift A person cannot improve his/her golf game by focusing on the score (Y). The golf score, and business results, are improved by identifying and controlling the key process input variables (Xs). Quality Management

17. Quality Management

18. Quality Management

19. Lean Concept Quality Management

20. Lean Concept • Business improvement method to to produce better products or deliver better services using fewer resources (doing more with less) • Elimination of waste(s) • Techniques and tools • VSM (Value Stream Mapping) • QCO (Quick Change Over) • Poka Yoke • Kanban • TPM (Total Productive Maintenance) • Visual Management • Standardized Work • Etc. Quality Management

21. VSM definition • Value Stream Mapping is a pencil-and-paper tool that helps you see the flow of information andmaterials as a product makes its way through the value stream Quality Management

22. VSM current Quality Management

23. Seven types of waste • Overproduction • Transportation • Inventory • Motion • Correction • Overprocessing • Waiting Quality Management

24. The 8 Types of Waste

25. Identifying opportunities for improvement Quality Management

26. Future state VSM Quality Management

27. Value Stream Map (VSM) Quality Management

28. Value Stream Map – Swim Lanes • Primary Customer: Creditors • Their needs: • Payment received on-time • Right amount Receives payment Sends bill Buy stamps Delivers mail Picks-up & delivers mail Sort mail Read and re-stack mail Get mail Write checks Address & stamp envelopes Put in mail box Verify charges with spouse ? ? Verify balance Quality Management

29. Error proofing (Poka-Yoke) • Poka-yoke (ポカヨケ)is a Japanese term that means „fail safing" or "mistake-proofing". A poka-yoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes (poka). • Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur Quality Management

30. Poka Yoke principle • Either the operator is alerted when a mistake is about to be made, or the poka-yoke device actually prevents the mistake from being made Quality Management

31. Poka Yoke examples Quality Management

32. Just-in-Time Quality Management

33. Just in Time (JIT) • Just in time (JIT) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. • Just-in-Time is producing only what is needed, when it is needed and in the quantity that is needed. Quality Management

34. Just in Time (JIT) • Push system • Marketing forecasts tells the factory what to produce and in what quantity • MRP • Pull system • Production demand comes from the customer • Kanban Quality Management

35. Just in Time (JIT) • Prerequisites for JIT: • “Six sigma” quality • Reliable suppliers • Reliable production equipment • Flexible workforce • Close distance to customer Quality Management

36. Kanban Quality Management

37. Lean Six Sigma • In recent years, some practitioners have combined Six Sigma ideas with lean manufacturing to create a methodology named Lean Six Sigma. • The Lean Six Sigma methodology views lean manufacturing, which addresses process flow and waste issues, and Six Sigma, with its focus on variation and design, as complementary disciplines aimed at promoting "business and operational excellence” • Companies such as IBM use Lean Six Sigma to focus transformation efforts not just on efficiency but also on growth. It serves as a foundation for innovation throughout the organization, from manufacturing and software development to sales and service delivery functions. Quality Management

38. Continuous Improvement (CI) • Continuous improvement process is an ongoing effort to improve products, services, or processes. • These efforts can seek "incremental" improvement over time or "breakthrough" improvement all at once. • Delivery (customer valued) processes are constantly evaluated and improved in the light of their efficiency, effectiveness and flexibility. • Continuous improvement is fundamental to success in the global marketplace. Quality Management

39. Savings from CI (€) • FY 05 actual 95,2 M • FY 06 actual 131,3 M • FY 07 actual 150,4 M Quality Management

40. CI results • Continuous Improvement initiative at Johnson Controls helps company to gain US$626 million in FY2006 savings • The company-wide Continuous Improvement (CI) initiative is an important reason Johnson Controls posted record 2006 sales and earnings despite challenging markets, according to company executives that spoke at a recent global conference call with the CI team. • “Six Sigma, Lean and Best Business Practices (BBP) are critical to our financial results and quality performance,” said Steve Roell, Johnson Controls’ vice chairman and executive vice president Quality Management

41. ISO 9000 Quality Management

42. ISO 9000 • Quality management Standard issued by ISO (International Standards Organization) • designed to help organizations to ensure that they meet the needs of their customers and other stakeholders • First published in 1987,revised in 1994 and 2000, adjusted in 2008 • Globally adopted – in 2009 over 1 million organizations have been certified to ISO 9000 Quality Management

43. Quality Management

44. Contents of ISO 9001 • ISO 9001: 2008 Quality management systems – Requirements (30 pages) • Section 1- 3 : Scope, Normative Reference, Terms and Definitions • Section 4 - 8: Requirements: • Quality Management System • Management Responsibility • Resource Management • Product Realization • Measurement, analysis and improvement Quality Management

45. Summary of ISO 9001 • Quality policy is a formal statement from management, closely linked to the business and marketing plan • Quality policy is understood and followed by all employees • Decisions made on recorded data • QS is regularly audited and evaluated for conformance and effectiveness • Records about raw materials and products – traceability • Organization determines customer requirements • System for communication with customer • New product development – testing to show whether product meets design, regulatory and user requirements Quality Management

46. Summary of ISO 9001 • Performance reviews through internal audits and meetings. Determination if QS is working and possible improvements • Dealing with past and potential problems. Records activities and monitors effectiveness • Documented process for dealing with actual and potential non conformances (suppliers, customers, internal problems) • Making sure: • No one uses bad product • What to do with bad product • Deals with root cause of the problem • Keep records and use them to improve the system Quality Management

47. Certification to ISO 9001 • Not done by ISO organization but by independent certification bodies • In CZ about 50 organizations, mostly linked to large international certification organizations (TÜV, SGS,DQS, Norske Veritas, etc.) • Assessment based on extensive sample of sites functions, products, services and processes. • List of problems: • Action requests • Non-compliances • Certificate ISO 9001: • Valid 3 years • Limited by a (product) scope and locations covered Quality Management

48. Auditing to ISO 9001 • Two types of audit: • External (certification) • Internal • Compliance auditing (1994 version) • Tell me what you do • Show me where it says that • Prove that this is what happened • Effectiveness auditing (2000 version) • Will this process help you to achieve your stated objectives? Quality Management

49. Industry – specific interpretations of ISO 9001 • ISO 9001 standard is generic but can be applied to almost all types of business • Police departments, banks, hotels, shops Quality Management

50. Industry – specific interpretations of ISO 9001 • AS 9000 Aerospace Basic Quality System Standard • ISO/TS 16949/2009 Automotive manufacturers QS standard • ISO/IEC 90003:2004 Computer software QS Quality Management