Lean Sigma Introduction

Lean – Six Sigma
Executive Introduction
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Jason P. Premo
VP Marketing, nMetric LLC
Tuesday, November 16, 2004
© Copyright 2004 - nMetric, LLC.
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Sound Familiar?
Some common themes we hear:

• What’s the best methodology to use?
• We did Lean before…it didn’t work.
• We already do Lean, so why Six Sigma?
• 6 Sigma is too complex/costly for my plant.
• Projects take too long to complete…
• We’re collecting lots of data, so now what?
• I have a Bachelors Degree in MS Excel!
08-17-04 © Copyright 2004 - nMetric, LLC.
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Meeting Goals
What we will accomplish today:

• Understand the “Lean-Sigma” approach
• Discuss some of the common challenges
• Define the Lean Sigma roadmap
• Benchmark successful best practices
Note: This is NOT a detailed 6 Sigma or

Lean Manufacturing Training Class
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Meeting Goals
Define Measure Analyze Improve Control

1. Establish Team Charter 4. Confirm Team 9. Determine Sources of 10. Generate Ideas 16. Develop Control Plan
2. Identify Sponsor and 5. Define Current State Variation and Time 11. Conduct Experiments 17. Monitor Performance
Team Resources 6. Collect and Display Bottlenecks 12. Straw Models 18. Mistake-Proof Process
3. Administer Pre-Work Data 13. Conducts B’s and C’s
7. Determine Process 14. Action Plans
Capability and Speed 15. Implement
8. Identify Quick Wins
• Project ID Tools • SSPI Toolkit • Cp & Cpk • Brainstorming • Check Sheets

• Project Definition Form • Process / Value Stream • Supply Chain Accelerator • Pull Systems • Run Charts
• The Value of Lean Six Mapping Analysis • Setup Reduction • Histograms
Sigma - NPV/IRR/DCF • Value Analysis – Process • Multi-Vari • TPM • Scatter Diagrams
Analysis Observation • Box Plots • Process Flow • Control Charts
• PIP Management Process • Time Studies • Marginal Plots • Kaizen • Pareto Charts
• Quality Function • Baseline Analysis • Interaction Plots • Strategic Sourcing • Interactive Reviews
Deployment • Brainstorming • Regression • Benchmarking • Poka-Yoke
• Voting Techniques • ANOVA • Affinity/ID
• Pareto Charts Affinity/ID • C&E Matrices • DOE
• C&E/Fishbones • FMEA • Hypothesis Testing
• Check Sheets • Problem Definition Forms • Process Mapping
• Run Charts • Opportunity Maps • B’s and C’s/Force Field
• Control Charts • Balance Models • Tree Diagrams
• Gage R&R • Part Stratification • Pert/CPM
• Process Capability • Constraint I.D. • PDPC/FMEA
• Gantt Charts

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Discussion Topics
Today’s Agenda:
1. Speaker Introduction
2. The Need for Change
3. What is Lean Sigma?
4. The Lean Sigma Road Map
5. Lean Sigma Applied – An Example
6. Question and Answer

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Discussion Topics
Today’s Agenda:

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Speaker Introduction
Jason P. Premo:
• 10+ years in
manufacturing
– Engineer to VP Ops
• Company size from
$4Billion to $40million
• 45+ Lean, Kaizen, Six
Sigma projects
• Started automation
system integration firm
• Presently a VP of
Marketing at nMetric
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nMetric, LLC:
• Company roots are
Collaborate from manufacturing
to ERP, SCM,
MES, EMI & – Hydraulic Valves
Legacy Apps
• Patented Software for
Communicate Coordinate
Lean Manufacturers
Monitoring, Real-time
Alerting & Scheduling & – Real-time Collaborative
Messaging Execution Production Management
Correlate
• 4C@Site CPM Suite:
Role-based
visibility and
– link to ERP, scheduling,
analysis tools execution, tracking,
analysis, and alerting
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4C@Site for Manufacturing:
ERP Legacy SCM CMMS Database
Network / Internet
4C links your top floor to

4C@Site picks up where the shop floor and
ERP and other enterprise schedules, coordinates,
business systems end. executes, tracks, analyzes
and alerts on critical
operations in real-time.
Industrial Network

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Discussion Topics
Today’s Agenda:

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The Need for Change
Manufacturing Focus:
• Managing Automation Magazine poll of
350+ manufacturers in December 2003
• Critical goals for their businesses include:
– Improve Customer Service Speed & Delivery
– Build to Order & Reduce Inventory
– Reduce Downtime & Maintenance Costs
Improving productivity is the key!

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The Need for Change
Productivity Focus: “Inflated” because of

defects, scrap, rework,
delay, process
inefficiencies, etc…
________________________________
Sales $100
-Variable Costs $ 60
________________________________
=Contribution Margin $40
-Fixed Costs $30
________________________________
=Profit $10
________________________________
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The Need for Change
Penny Saved ≠ Penny Earned:

A Cost Reduction of (5/60)×100% = 8.3%
Delivers a Profit Increase of (5/10)×100% = 50% !!!
________________________________
Sales $100
-Variable Costs $ 60 - 5
________________________________
=Contribution Margin $40 + 5
-Fixed Costs $30
________________________________
=Profit $10 + 5
________________________________
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The Need for Change
Change Can Be Confusing:

• TQM • Kaizen • Agile
• Lean Manufacturing • 5-S
• Quality Circles • SPC
• Six Sigma • Continuous
• World Class Improvement
Manufacturing • BPR • JIT
• TQC
08-17-04
• Re-Engineering
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The Need for Change

Manufacturing Trends:
• 84 world-class
companies surveyed
– GE, Motorola, Boeing,
Phizer, Home Depot, US
Army, DuPont, ITT, etc.
• Over ½ use Lean -
Sigma or Six Sigma
– 88% say improvements
relate to operations/mfg.
Source: Best Practices, LLC Report 2003 – 55% expect 1 to 7%
margin improvement
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Discussion Topics
Today’s Agenda:

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What is Lean Sigma?
A Business Strategy:
• Focuses on improving all processes
– new product development, administration,
finance, manufacturing, supply chain
• Integrates approaches from both disciplines
– Lean Manufacturing: time and waste reduction
– Six Sigma: process variability reduction
• Deployed within an integrated and
disciplined project management approach
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What is Lean Sigma?

Lean Manufacturing:
• Focus on reducing the
“7 Forms of Waste”
– Anything that adds cost
to the product without
adding value is waste!
• Founded on Toyota
Production System
– Kaizen, 5S, TPM,
Jidoka, One-piece-flow,
JIT, SMED, Standard
Operations, etc.
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What is Lean Sigma?
The Toyota Production System:

Quality / Cost
Delivery / Safety
Goal is to be #1 in Every Area!
Just in Time Continuous Built In Quality

Improvement Culture
Continuous Flow Line Stop
Pull System Visual Controls
Uncompromising Labor / Machine
Service Efficiency
Level Production Mistake Proofing
Foundation Built on Principles:

Standard Work - Leadership - Workplace Organization
Employee Involvement - Equipment Reliability - Supply Chain Effectiveness

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What is Lean Sigma?
Total Cycle Time Approach:
Total Operational Cycle
R&D Plan MFG Dist A/R
R&D Plan MFG Dist A/R

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What is Lean Sigma?
Defining “Value Added”:

What is the amount If I placed an order
of time for one unit today, when would I
of product to run receive it?
through the plant?
(A) (B)
A = ____ B = ____ A / B = ____%

VA Non VA

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What is Lean Sigma?
My Personal Example:
What is the amount How long does it actually
of time to print and take to process an order
package a typical from order entry to
custom labels order? shipment?
(A) (B)
A = 4hr B = 168hr A / B = 2.4%

VA Non VA

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What is Lean Sigma?
The “Business As Usual” Approach:

Capital or labor investments usually
focus on the Value Added portion of
the total cycle, minimizing the gain
VA Non VA
VA Non VA Gain

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What is Lean Sigma?
The Lean approach:

Lean identifies the sources of
waste to reduce the
Non Value added elements
VA Non VA
VA Non VA $$$ Gain $$$

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What is Lean Sigma?

Six Sigma:
• A data driven approach to
DEFINE reducing & controlling the
sources of variation
CONTROL MEASURE
– What causes a process to
not consistently meet target
IMPROVE ANALYZE • Developed by Motorola
and made famous by GE
Improve the capability of – DMAIC & DMADV Methods
your business to meet – DOE, Regression, CpK
and exceed your
customer’s expectations – “Black Belt” leaders
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What is Lean Sigma?
Understanding Variation:
Variation or “spread” of
landing positions
X X X
X X
X X
X X
Average or “mean” location

of all touchdowns

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What is Lean Sigma?
Understanding Variation – Part 2:

But…Smaller “spread” or
variation of touchdowns
XXX
XX X
X X
X
Notice it has the
same average!
So…which pilot would
you choose for your
next flight? Why?
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What is Lean Sigma?

Simplifying Six Sigma: D.P.
M . Op.
=
0 0 0000
. U x1 un i ties
Nu m D.P p port
ber o
f e r of O
Defec umb
Nu m ts N
ber o
f Uni = D.P
ts .U
Capability =
A quality level of "6σ" corresponds to less

than 3.4 defects per million opportunities
(or 99.99966% of the opportunities are within the customer requirements)

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What is Lean Sigma?
Why Sigma Level is Important:

• The cost to deliver a quality product can
account for as much as 40% of sales price!
– An $800 laser printer may have cost the
manufacturer $320 just to make sure that you
took home an average quality product
– Scrap, Rework, Non-Value Add, etc.
• For a company with $100million revenue,
the cost of quality is often roughly 25%!
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What is Lean Sigma?
The Cost of Quality

• What if this same
COST OF QUALITY company could reduce
σ level DPMO Cost of Quality its cost of achieving
2 308,537 Not Applicable quality by 20%?
3 66,807 25%-40% of sales
4 6,210 15%-25% of sales • Operating revenue
5 233 5%-15% of sales
6 3.4 < 1% of sales
would increase by at
Each sigma shift provides a 10% net
least $5 million
income improvement! – Or 50% of the current
operating income!

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What is Lean Sigma?
Measuring Sigma Level:

Estimate the Count the
Opportunities Defects
Defects per million Opportunities

6σ = 3.4 dpmo
Conversion into "Sigma" can

be accomplished with the help
of a statistical table or software
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What is Lean Sigma?
Defining Opportunities:
Customer Perspective: Delivered Product
1 Control Board = 1 opportunity
Production: Processes, Inputs, Variables

Control Board = 1,200 opportunities
Software Code = 12,000 opportunities
Customer Service/Accounting: Number of fields

Purchase Order = 20 opportunities
Logistics / Shipping: Packaged Unit
Correct Pallet Items = 50 opportunities
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What is Lean Sigma?

How to calculate your Sigma level:
Each Cell Phone has
1367 defect opportunities
175 defects are counted while
producing 5000 Cell Phones
D.P.U = 175 / 5000 = 0.035
D.P.Op = 0.035 / 1367 = 0.0000256
D.P.M.Op = 25.6
Sigma level : 5.55

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What is Lean Sigma?
Putting it all together:

Lean Six Sigma DFSS
Lean Manufacturing Goals: Six Sigma Goals: DFSS Goals:
• One Piece Flow • Defect prevention • Integrate Six Sigma from start
• Just In Time Inventory • 3.4 defects per million • Error free product delivery
• A Visual Factory • Reducing Variation • Integrate Voice of Customer
• Agile Manufacturing • Stability • Multiple customer requirements
• Higher Value-Add % • Predictable Processes • Faster time to market
• Overall Equipment Effectiveness • Solve complex problems • Competitive Advantage
• Work Flow Standardization • Improve Value Stream
The Tools: The Tools: The Tools:
• Cellular Design • DMAIC • DMADV
• 5S Workplace Organization • Statistical tools • Statistical tools
• Kanban and pull systems • Value Stream Mapping • Value Stream Mapping
• Setup Reduction (SMED) • SIPOC • Quality Function Deployment
• Total Productive Maintenance • FMEA • Manufacturing Design
• Poka-Yoke • Process Mapping • Benchmarking
• Kaizen Blitz • Design of Experiments • CTQ Risk Matrix

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Discussion Topics
Today’s Agenda:

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The Lean Sigma Road Map
Implementing Lean Sigma:

• There is no “magic bullet” – every
business is different and must be adapted
• Many companies have tried continuous
improvement with only limited results
• Getting started with Lean Sigma requires
commitment by senior management
• Simply picking and choosing the tools like
items from a menu will not produce results
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Breakthrough Process:
Step 1 Vision & Communication
Step 2 Structure & Education
Step 3 Define Key Metrics
Step 4 Basic Lean Sigma Tool Deployment
Step 5 Advanced Tool Deployment
Step 6 Transfer to Entire Value Stream
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Step 1 Vision & Communication
• Define the Vision

• Use the WIFM Principle
• Create a Customer Centric Culture
• Happy Customers = Job Security
• Communication Example

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Define the Future Vision:

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Use the “WIIFM” Principle:

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Create a Customer Centric Culture:

“Employees do not close plants and force
companies out of business, customers
not buying products do.”
Dr. W. Edwards Demming, 1950’s

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Happy Customers = Job Security:
$ Cash
Cash !!!!
Value
Value !!!!
Customer
Low Cost Your Company
High Quality Profit
Availability Repeat Business
Growth
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Step 2 Focus, Structure & Education
• Organization & Best Practices

• Black Belt Best Practices
• Value Stream Mapping
• Weighing the Priorities
• Create a Lean Sigma Business Plan
• Action Plan Example

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Organization:
• Successful companies
leverage a foundation
Champion
– Top Decision Makers
MFG. Finance Black Belt – Supportive Champions
• Team Structure
Shifts Green Belt Integrator
– Strategic & Action
– Empowered Leaders
Representatives from • Cross functional is key
departments and shifts for gaining buy-in
help improve buy-in and
– Production, Quality,
communications
– Finance, IT, Purchasing
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Black Belt Best Practices:

• 75% of manufacturers have close to 10
blackbelts engaged in process
• 57% usually manage between 1-3 projects
– 25% manage 4-5, 10% 6-10, 9% over 10
• 32% of total projects have a financial
impact of $100-$500K
– 27% are $500k-$1M, 27% are $1M – $5M,
and 14% are >$5M
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Value Stream Mapping:

• VSM is a mapping tool that maps not only
material flows but also information flows
– What signals and controls the material flows?
• This visual representation facilitates the
process of lean implementation
– Identify the value-adding steps in the process
– Focus on how to eliminate the non-value
adding steps, or wastes (muda)

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Value Stream Mapping Example:

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Weighing the Priorities:

HIGH
Impact of
Contemplated
Changes?
LOW HIGH
LOW
Support for Contemplated Changes
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Create a Lean Sigma Business Plan:
confidential

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Action Plan Example:

Project: 4 Color Heidelberg
Rep: Jay Sniker
Goal: Implement new 4-Color Heidelberg Press by May 30
Note: Provide updates to Actions, When, Comments, etc. in BOLD
Action Person Responsible People Doing Work Start Date Finish Date
1 Kaizen Event Layout Premo Premo, Jay, Richard 1-Mar 30-Mar

2 Develop Equipment Capital Requirements Premo Premo, Sniker, Pace 1-Mar 6-Apr
3 Determine sales and pricing strategy Premo Premo, Nelson, Bill Cesak 1-Apr 30-May
4 Pre-Press Process Sniker Premo, Sniker, Taylor 1-Apr 15-May

5 Draft AFE Sniker Sniker, Premo 15-May 30-May
6 Press Installation Sniker Sniker, Premo, Pace 30-May 15-Jun
7 Pre-press and print test run Sniker Sniker, Premo, Taylor 15-Jun 20-Jun

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Communication Example

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Step 3 Define Key Metrics
• Key Performance Indicators

• Leading versus Lagging
• The 4 R’s of Measurement
• The Balanced Scorecard
• Using the IPOC Method
• Make it Obvious, Examples

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Key Performance Indicators:

Performance?
X’s
Inputs Outputs
Manpower Products
Machine Services
Materials Information
Methods

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Leading versus Lagging:

• Leading indicators foreshadow outcomes
– They are proactive or preventative measures
• Lagging indicators describe the results of
a system or process in a given time
– They are reactive or descriptive examples
• Most companies employ lagging indicators
– Such as financial month end reports
– Weekly or monthly production reports
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The 4 R’s of Measurement:

• Relevant: does the measure have a significant
relationship to strategy and objectives?
• Reliable: will the measurement help identify the
strengths and weaknesses of one or more
business processes?
• Reasonable: is its purpose easily understood by
its name alone to all those that contribute?
• Reachable: is the data necessary for computing
this measure available for use?
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The Balanced Scorecard:
• Combines both financial and operational
measures in an integrated system
– Financial: “How do our shareholders and
stakeholders define our company’s success?”
– Customer: “What do they hold most important to
earn their continued business?”
– Internal: “To delight customers and shareholders,
what business and operational processes must we
excel? What are the industry benchmarks?”
– Innovation: “To achieve our vision, how must the
organization continuously learn, improve, and
create higher value?”
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Good KPI’s provide
measurements
Using the IPOC Method: focused on

customers (internal
or external)
Inputs Processes Outputs Customers
Design of Customer
People
Products Needs
Products
Satisfied
Raw Materials Production of
Products Services
Customer
Components
Performance Problems
Documentation
of Services Solved
Customer
Requirements Results
Delivery of Customer
Products/ Requirements
Capital
Services Met
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KPI Examples:
Quality Cost Delivery Safety
OSHA RIR
Scrap
Labor $ / Unit OEE
Near Misses
First Pass Yield
COPQ On Time Delivery
5-S Compliance
DPM / Sigma
Inventory Turns MTBF
Employee Training
Process Capability
WIP Value MTTR Compliance

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What is Lean Sigma?
Overall Equipment Effectiveness:

• Measures the “value-
%
%
UPTIME add” contribution of
Y equipment & processes
I
E
OEE • It measures the % of
L
time equipment in a
D PROCESS factory is actually
EFFICIENCY making quality product
OEE = %uptime x %yield x %efficiency compared to a
theoretical maximum
World Class is > 87.5% – i.e. what you paid for…
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Make it Obvious:
• If the measurements
are not obvious, they
will not be meaningful
– nor will they be used!
• Additionally, what is
obvious to one person,
may not be for another
– Make it role based, by
area, person, etc
“Say, Thag…think wall of – Apply the “Visual
ice be closer today? Factory” method to all
score boards
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Make it Obvious – Example:

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KPI example for a work cell:

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Step 4 Basic Lean Sigma Tool Deployment
• Just in Time Training

• 5S as a Foundation
• 5S Examples
• Setup Reduction and More

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JIT Training:
• Start with the high priority financial impact
projects, but balance the selection
– What is the speed & ease of implementation?
– Goal: Achieve rapid buy-in and quick results
• Apply “Just in Time” Training
– Don’t train everyone on everything!
– Begin with 5S Workplace Organization, Visual
Controls and Standardized Work
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5S as a Foundation:
• High productivity is difficult to obtain in a workplace
that is cluttered, disorganized, or dirty
• Poor workplace conditions often lead to waste
– extra motion to avoid obstacles
– time spent searching for things
– delays due to defects, machine failures, or accidents
• 5S is a process for creating and maintaining an
organized, clean high performance workplace
– “A place for everything and everything in its place”

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5S as a Foundation:
1 Seiri Sort - Clear out non-essentials

2 Seiton Set in Order - Configure Workplace
3 Seiso Shine - Clean the environment
4 Seiketsu Standardize - Define the routines
5 Shitsuke Sustain - Comply to the Standard

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Sort Example:
Red Tag

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Shine Example:

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Set in Order Example:

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Standardize Example:

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Sustain Example:
Daily checklist is
used and scored,
90% is weekly average is
the team charted as a point
Goal on the graph

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Setup Reduction:
Phase One 5-S Workplace Organization to lay
the basic foundation for the area
Separate internal and external

Phase Two processes in the setup
Convert internal elements to external

Phase Three whenever possible
Streamline, Eliminate, Reduce all

Phase Four other spects of the setup process

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Setup Reduction:
Running a Batch with a Set-Up time of 50 min:

S/U Run 400 min
Without addressing set up time in today’s JIT world…

Run 80 Run 80 Run 80 Run 80 Run 80
S/U S/U S/U S/U S/U
min min min min min
What if set up time is reduced to 10 min?

Run 80 Run 80 Run 80 Run 80 Run 80
min min min min min

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Step 5 Advanced Tool Deployment
• Advanced Thoughts
• First Pass Yield
• Process Capability
• Correlation
• Control Charts

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Advanced Thoughts:
• Implement more advanced Lean methods
– Cellular Manufacturing, Total Productive
Maintenance, Mistake Proofing, Kanban…
• Train leaders (black belts) on more tools
– statistical methods to solve more complex
process variation and reliability problems
– Process Capability, Design of Experiments…
• WARNING: Don’t move to this step unless
you master the basic tools first!
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Process Capability
• Ideally the customer would like a simple answer to
this simple question: “yes or no?”
• Unfortunately, several issues often prevent this:
– Inspection is not perfect; even 100-percent inspection
won't guarantee 100-percent quality.
– All processes vary somewhat, and the variation must
be analyzed using statistical methods that predict at
least an occasional failure.
– Measurement isn't perfect, so even if a process did
have zero variation, our measurements would still vary.
– This means that we might accidentally ship a defective
item even if we measure it carefully.

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What is Lean Sigma?
Process Capability:
Mean = 112.725
StdDev = 106.13054
Process Capability Measures Chart • To most people, process
USL = 225.55
LSL = 0.
Sigma Level = 1.062
capability is often a
Sigma Capability = 1.063
Cpk = 0.354
jumbled confusion of ideas
expressed in jargon
Cp = 0.3542
D.P.M. = 287961
• However, if properly
applied it helps provide
answers to the question:
“Can you meet my

-300 -200 -100 0 100
Critical Measure
200 300 400 500
requirements?”

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Calculating Process Capability:

Design specification width
Cp =
6σ
Mean - Spec Limit

Cpk = Min.
3σ
σ 1 2 3 4 5 6 7 8
Cp 0.33 0.66 1 1.33 1.66 2 2.33 2.66
Cpk -0.16 0.16 0.5 0.83 1.16 1.5 1.83 2.16
With a maximum process shift of +/- 1.5

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What is Lean Sigma?
First Pass Yield:

25 pieces • Typical yield or scrap
Reworked
measurements only
show the final result
1000 1000
• First Pass Yield (FPY)
Process measures total efforts
Part
Station Parts – FPY is the probability
In #1 Out that a product will pass
Fantastic! through the process
We had ZERO % Scrap! without incurring rework

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The Lean Sigma Roadmap
Understanding Correlation:
• Correlation sometimes
indicate “causality”.
• Prediction and possibly
OEE Performance
process guidance may

be possible
• Recognizing data
patterns is important!
– This graph shows an indirect
relationship for OEE as
Humidity HUMIDITY increases
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The Lean Sigma Roadmap
Understanding Control Charts:

Look for the following:
Upper Control Limit (UCL)
3σ • One or more points outside the
control limits
Zone A
2σ • 7 consecutive points on one side of
Zone B the centerline
1σ
Zone C • 7 consecutive increasing or
= decreasing intervals
x
Zone C • 2 out of 3 consecutive points in a
1σ specific zone A or beyond
Zone B
2σ • 4 out of 5 consecutive points in a
specific zone B or beyond
Zone A
3σ • 14 consecutive points that alternate
Lower Control Limit (LCL) up or down
• 14 consecutive points in zone C

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Step 5 Transfer to the Entire Value Stream
• Transfer Thoughts
• Establish Transfer Forums
• Move Up and Down Supply Chain

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Transfer Thoughts
• Begin in a business unit or department and
achieve success in the basic tools, then
proliferate successes in other areas
– Alternative is to dig deeper in a single area with
advanced tools first, then move elsewhere
• Document best practices & methodologies
• Share with other departments, suppliers
and customers
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Establish Transfer Forums:

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Discussion Topics
Today’s Agenda:

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Lean Sigma Applied
Business Problem:
Charlie, I’m looking at your Jason, the volume for TYPE
request for a new packaging line. XYZ labels are up by 30% this
We need to talk about year and we only have two
justification before I present this lines that are tooled to
the board of directors. produce this. We’re running
both of them flat out and lots
of overtime to boot!
We’re not going to be able to
meet customer demand!
Jason (VP Manufacturing)

Charlie (Plant Manager)
<3 weeks on the job!

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Lean Sigma Applied
On the Surface:
On the surface, it looks like an open and
shut case. Charlie is doing everything
he can to maximize output from the two
lines and volume is growing. However,
these latest numbers show that Line #2
output is lower than Line #1.
I’d better work with Charlie and the
team to find out why…Looks like now’s
a great time to introduce Lean Sigma!

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Lean Sigma Applied
Charter the Blitz Team:
Lean-Sigma
Blitz #1
• Rose Laster • Carl Sagers
• Evelyn Benter • Richard Schira
• Susan Poage • Debbie Young
• Tammy Davis • Charlie Boone –
• John Freeman Team Leader
• Jason Premo –
• Paul Carroll Facilitator

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Lean Sigma Applied
Investigating Uptime:
Yup, after the gears seized
Paul, any ideas why Line #2 in
on the slitter for the second
Work Cell A output is lower?
time, I turned the speed
I walked by and noticed it was
down to try and prevent it
running slower than Line #1…
from happening again. It
seems to have done the
trick…
Both downtime and scrap
I wonder what are much lower now.
the full impact
is on capacity.
I’ll ask John to
help me do that
analysis…
Charlie (Plant Manager) Paul (Maint. Tech)

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Lean Sigma Applied
Operator Buy-In Challenges:

Grumble…
Look at all of these
Kaizen must be forms they want me
Japanese for “lots of to fill out!
stupid paperwork”
How can I meet my

Downtime Log numbers if this
Scrap Log paperwork takes time
Production Log away from the press?

see…know…now
Efficiency Findings
Efficiency Baseline: Hi Charlie, our initial

OEE analysis shows
a lot of downtime.
Oh one more thing…

The line design speed
is actually 350 per
minute. Seems we
are consistently
operating at about
245 per minute…
John (Process Engineer)

see…know…now
Quality
Investigating Yield:
Let me see, Line #2…we had
to reject a whole batch last
So, the 2nd packaging line is
week - that was a complete
running less than 50% of the
shift’s worth of production!
time…and then only about
Overall, about 10% scrap for
70% of it’s design speed.
the month.
I wonder about it’s scrap…
Actually, that’s good

news. We thought we
were going to have over
30% scrap, but were able
to rework most of it…
Carl (Quality Manager)

see…know…now
Lean Sigma Applied
Calculating OEE:
44.8% uptime x 90% yield x 70% efficiency = 28% OEE!
Good grief! I just completed the

How can I justify purchasing capability and yield
a new line, when we’re barely analysis. I’ll send you a
getting our money’s worth on full report…
the existing one?
And what about that rework!

How long did it take for us to
re-process that order?
No wonder I have to run
Saturday overtime!

see…know…now
Lean Sigma Applied
Calculating First Pass Yield:

10 Rework 150 Rework 10 Rework
0 Scrap 100 Scrap 0 Scrap
1000 1000 900

900
900/1000 = 90% Yield (10% Scrap)
990/1000 Press x 850/1000 Slit x 890/900 Pack = 83.2% FPY

see…know…now
Lean Sigma Applied
Calculating Process Capability:

Mean = 112.725 Process Capability Measures Chart
Press #2 does not consistently

StdDev = 106.13054
USL = 218.8
LSL = 6.6
Sigma Level = 0.999
meet customer requirements!
Sigma Capability = 1.
Cpk = 0.3332
Cp = 0.3332 Many samples fall
D.P.M. = 317450
outside of the specs!
LSL USL
1σ
Statistical analysis 2σ
show a CpK of only 3σ
0.33, Sigma of 1,
4σ
and DPM of 317,430
5σ
6σ
-300 -200 -100 0 100 200 300 400 500

Critical Measure

see…know…now
Lean Sigma Applied
The “Hidden” Factory:
44.8% uptime x 90% yield x 70% efficiency = 28% OEE!
99% Press x 85% Slit x 98.8% Pack = 83.2% FPY!
Cpk of only .33 = 317,000 defects per million!
Quality Uptime
Efficiency
Rework

see…know…now
Histogram and control charts:

Histogram
12
10
Frequency
8
6 Frequency
4 Day's Late Control Chart
2
0 8.0
-5 -3 -1 1 3 6.0
More
Bin 4.0
UCL
2.0
CL
0.0
Day Late
-2.0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
LCL
-4.0
-6.0
-8.0

see…know…now
Quality Defect Check Sheets:

D e fe c tiv e I te m C h eck S h eet
D a te:
P r o d u ct: 2 5 D is s a t E x a m p le s
M a c h in e : L ith o g ra p h ic P ro d u c tio n
O p era to r: M u ltip le O p e r a to rs a n d R e p s
P r o b le m : W e fo u n d th a t Im p ro p e r M a te ria l S p e c s
s u b m itte d o n o rd e r to v e n d o r, P o o r
C o m m u n ic a tio n s , L a c k o f S a le s Q u a lity
C o n tro l w e re th e la rg e s t fa c to rs
D efect T y p e C heck S u b to ta l
C o m m un X X X X X X 6
C u s t- S . R e p
N o S a le s Q C X X X X X X X X 8
W ro n g C o p y X 1
o n o rd fo r m
P oor C o m m s X X X X X 5
In c o rre c t X X X X X X X X X X X X X X X 21
S p e c s o n o rd X X X X X X
R e fe rr in g to X X X 3
o ld v e rs io n
P o o r R e c o rd X X X 3
K e e p in g
P e n m a n s h ip X X 2
H ard co p y 1
n o m a tc h
D id n ’ t u s e X 1
to o ls
P oor L ayo ut X 1
G ra n d T ota l 82
T o ta l X X X X X X X X X X X X X X X 26
D e fe c tiv e s X X X X X X X X X X X X X X X X
see…know…now
Pareto analysis tool application:

# of Jobs Cumul
Possible Root Cause Affected Percent Percent
Print out of register 15 29% 29%
Equipment in Poor Condition 9 18% 47%
Lack of attention to detail 7 14% 61%
Hickeys on paper 5 10% 71%
Other (items not originally considered) 5 10% 80%
Press operator not trained 4 8% 88%
Static Electricity 2 4% 92%
Used wrong PMS color 2 4% 96% # of Jobs Affected
Material poor quality (ink, paper) 2 4% 100%
Total 51 16 100%
14
12
10
8
6
4
2
0
Print out of
attention to
(items not
Electricity
poor quality
(ink, paper)
originally
register
Material
Lack of
Static
Other
detail

see…know…now
Opportunities for 5S?

see…know…now
Team Findings:
• Poor Housekeeping and Organization
– Lots of clutter, poor equipment cleanliness
– Hard to find tools, supplies, materials = delays
• Too much “internal” setup processes
– Lots of tasks could be done off-line
– Cylinders, etc. could be pre-set to common jobs
• Lack of Standard Processes
– Correct sequence of steps (easy to forget a step!)
– No easy way to set cylinders result in moving web
guide = more time and scrap

see…know…now
Applying Shine:

see…know…now
Applying Set-in-Order:

see…know…now
Applying Standardization: Using a “Jig”

to help set the
anvil clearance!

see…know…now
Adopting a Standardize Mentality:

see…know…now
Basic Housekeeping Activities:

All three shifts - Every Day M TU W TH
Daily PM Who
*Turn in all work orders to Brenda Butler and a copy to Jason Premo
1 2 3 1 2 3 1 2 3 1 2 3 1
Checkall guard doors and interlocks for E-Stop activation
All Stations F&P
Replace any damaged parts, missing screws, bolts, etc. Write Work Orders
Clean photo eyes and any reflectors w/ compressed air

Blister Picker
Tech Clean catch pan of any fallen clamshells, debris
Apply few drops of oil on all shafts, linear bearings, and other areas that do not have
MGS Counters grease fittings
and Card
Feeder Clean photo eyes and reflectors w/ compressed air
F&P Thoroughly clean off all dust and debris build-up

see…know…now
Setup Reduction SOP:

see…know…now
Making Sustain Visible:

see…know…now
Project Results:
• 5 Day Blitz, 30 day
follow-up action plan
• Reduced travel
distance by 65%
• Reduced setup time
from 1hr to 15 min
• Reduced scrap by 30%
• Increase FPY from
83% to over 98%
• Improved OEE from
28% to 52% <3 months
see…know…now
Discussion Topics
Today’s Agenda:

see…know…now
Question and Answer

see…know…now
Thank You!
www.nmetric.com
jason.premo@nmetric.com
(864) 915-8658

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Lean – Six Sigma

Some common themes we hear:

What we will accomplish today:

Note: This is NOT a detailed 6 Sigma or

Define Measure Analyze Improve Control

• Project ID Tools • SSPI Toolkit • Cp & Cpk • Brainstorming • Check Sheets

08-17-04 © Copyright 2004 - nMetric, LLC.

08-17-04 © Copyright 2004 - nMetric, LLC.

08-17-04 © Copyright 2004 - nMetric, LLC.

4C links your top floor to

08-17-04 © Copyright 2004 - nMetric, LLC.

08-17-04 © Copyright 2004 - nMetric, LLC.

The Need for Change

08-17-04 © Copyright 2004 - nMetric, LLC.

The Need for Change

Productivity Focus: “Inflated” because of

The Need for Change

Penny Saved ≠ Penny Earned:

The Need for Change

Change Can Be Confusing:

The Need for Change

08-17-04 © Copyright 2004 - nMetric, LLC.

What is Lean Sigma?

What is Lean Sigma?

What is Lean Sigma?

The Toyota Production System:

Just in Time Continuous Built In Quality

Foundation Built on Principles:

08-17-04 © Copyright 2004 - nMetric, LLC.

What is Lean Sigma?

Total Cycle Time Approach:

Total Operational Cycle

R&D Plan MFG Dist A/R

R&D Plan MFG Dist A/R

What is Lean Sigma?

Defining “Value Added”:

A = ____ B = ____ A / B = ____%

Total Operational Cycle

What is Lean Sigma?

A = 4hr B = 168hr A / B = 2.4%

Total Operational Cycle

What is Lean Sigma?

The “Business As Usual” Approach:

Total Operational Cycle

What is Lean Sigma?

The Lean approach:

VA Non VA $$$ Gain $$$

Total Operational Cycle

What is Lean Sigma?

What is Lean Sigma?

Average or “mean” location

08-17-04 © Copyright 2004 - nMetric, LLC.

What is Lean Sigma?

Understanding Variation – Part 2:

What is Lean Sigma?

A quality level of "6σ" corresponds to less

08-17-04 © Copyright 2004 - nMetric, LLC.

What is Lean Sigma?

Why Sigma Level is Important:

What is Lean Sigma?

The Cost of Quality

08-17-04 © Copyright 2004 - nMetric, LLC.

What is Lean Sigma?

Measuring Sigma Level:

A = B = A / B = %