Lean Six Sigma Management System: Prof. Dr. Vincent Gaspersz, CFPIM, SSMBB

Lean Six Sigma Management System
Prepared By:
Prof. Dr. Vincent Gaspersz, CFPIM, SSMBB
Prof. Dr. Vincent Gaspersz, CFPIM, SSMBB—IQF Six Sigma Master Black Belt 1
QUESTION?
Do you know how many pieces of products will you
produce before you start working? Do you know your
process cycle efficiency?
How much time do you need to produce one piece of
product from the beginning to the end of processes?
What is your capacity? Are you operating at optimum
capacity? Do you know your plant OEE (Overall
Equipment Effectiveness)?
Do you know your plant capability process? At what
sigma level, do your plant operating now?
Objectives
Introduce key Concepts of
Lean and Six Sigma Management
System
Review the kinds of changes needed to
be considered as “a lean six sigma
enterprise”
Strategic Lean Six Sigma
Improvement Cycle
Business Needs
Track Results
Metrics Assessment
Findings
Strategic Improvements
Lean Six Sigma
Potential Return
Process
Improvement
Prioritize
(Product VSM)
Which Business Function Needs It?
SERVICE DESIGN
PURCH.
ADMIN. Lean- Marketing
Six Sigma
MFG.
QA
MAINT.
As long as there is a process that produces an output, whether it is

a manufactured product, data, an invoice, etc…, we can apply the
Lean Six Sigma Breakthrough Strategy!!!!
Process Improvement Overview
Product Development Process
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6

Pre-concept Concept Product Detailed Integration Production &
Definition Design & Test Operation
Validation
CUSTOMER
CTQ’S
Cycle Time and Cost Improvement
TECHNICAL
TECHNICAL Supplier Rationalization
CTQ’S
REQUIREMENTS Lean Product Development
LIST
BUSINESS
CTQ’S
Design for Six Sigma
Manufacturing Process
Control
Quality Improvement
Lean Fundamentals
“The continuous movement of products and information
through the value stream. The goal is to minimize ‘idle
time’ which equates to waste . . .”
INFORMATION FLOW
Customer
Value
Pre- Product Detailed Test & Product
Concept Production
Concept Definition Design Validation Support
Product Development Process
MATERIAL FLOW
Achieving
Achieving“Flow”“Flow”is isaaKey KeyObjective
Objectivein
in
Applying
Applying
Prof. Dr. Vincent Gaspersz, Lean
LeanPrinciples
CFPIM, SSMBB—IQF Principles
Six withinBelt an
within
Sigma Master Black anEnterprise
Enterprise
9
VALUE STREAM MAPPING
Focused on Customer Value
LSL USL
Historical Six Sigma
Defect Reduction
Customer
Value Stream
Value
Contemporary Six Sigma
The 5 Interdependent
Lean Principles
Toyota Production System
Best Quality - Lowest Cost - Shortest Lead Time
Through shortening the Production Flow by Eliminating Waste
Just in Time Jidoka

“The right part “Built in Quality”
at the right time
in the right amount” • Manual / Automatic
Line Stop
• Labor-Machine
• Continuous Flow Efficiency
• Pull System • Error Proofing
• Level Production • Visual Control
(Heijunka) Flexible, Capable,
Highly Motivated
People
Standardized Work
Operational Stability Robust Products & Processes
Total Productive Maintenance Supplier Involvement
Lean Manufacturing
is a manufacturing philosophy which shortens the time line between
the customer order and the product shipment by eliminating waste.
Business as Usual
Customer Waste Product
Order Shipment
Time
Lean Manufacturing
Customer Product
Order Waste Shipment
Time (Shorter)
Process Cycle Efficiency =
Total Value-Added Time/
Total Cycle Time =
4/116,5 = 0,0343 = 3,43%
Lean: Value vs Non-Value
Receive Order Ship Product
= Value-adding Operation Time (actual assembly or manufacturing operations)
= Non-value-adding Time (time customers will not pay for, such as rework, moving)
Value-added Ratio at typical manufacturing company

5%
95% Non-value-added
Value
Value-added Ratio at “Lean” company
50% Non-value-added 50% Value-added
Japan is 50%
Toyota is 43%
North America is
70 to 95%
The Process Improvement “Pitfall”
Typical Value Stream Ratio of
Value-Added to Non-Value-Added Activity
3%
97% NVA VA
Where’s
Most Process Improvement the Real
Teams Attack this . . . Opportunity?
97% NVA
. . . Achieve this . . .
. . . and Ignore this

Source: C. Fiore; Lean Strategies for Product Development, ASQ, 2003
JIT MANUFACTURING
Just in Time Manufacturing
Produce according to customer demands:
What is needed
When it is needed
In the quantity it is needed
Utilize - Continuous flow processing
- Pull system (Use Kanban)
- Level production (heijunka)
JIT Element - Continuous Flow Processing
Batch Processing
10 minutes
10 minutes
10 minutes
Total Batch A processing time : 30 minutes
Continuous Flow Processing
Total Batch A processing time : 12 minutes

Only 3 minutes for 1st part
•Product requires three processes that take one minute each
•Processing first batch in batches of 10 requires 30 minutes
•Processing first “batch” one-at-a-time requires only 12 minutes
Takt Time
Time (Available seconds per working day)
Takt Time =
Volume (Daily production requirement)
Sets pace of production to

match pace of sales.
Cycle Time = Actual time required for a worker to complete one cycle of
his/her process. For a machine or cell, time from completion
Of one item to completion of the next item
Continuous Improvement
Takt Time (1 min.)
1 min.
Cycle Time
Operators A B C D E
Takt Time (1 min.)

1 min.
Operators A B C D E
BENEFITS OF CREATING FLOW
SIX SIGMA METHODOLOGY
Quality Processes Yield Quality Results
Inconsistent Inconsistent
Process Results
Traditional = People doing whatever they can to get results
Consistent Desired
Process Results
Lean = People using standard process to get results
Focus on the Reduction of Variation that
Generates Defects for Customers
Market
Process Critical Customer

Suppliers Inputs Business Outputs Requirements
Processes
Defects
Variation in the Process Output

causes Defects that are seen by
the customer
Output Variation is caused by

Variation in Process Inputs and
by Variation in the Process itself
SIX SIGMA APPROACH
Voice of the Customer
Measure Analyze Improve
Define Control
Institutionalization
The DMAIC Model

Define Define the problem
and customer
requirements.
Control Measure Measure error rates and document
the process in its current incarnation.
Analyze process data and determine

the capability of the process.
Improve the process and remove

error causes.
Control process performance and

Improve Analyze ensure that errors do not recur.
AAB Innovation & the AAB Way Algorithm

DMAIC: Improvement
Process Focuses on “real problems”
directly related to the
bottom-line
Define Opportunities
Realizes results in 4-6
Measure Performance
months
Analyze Opportunity Utilizes multiple tools and

techniques including
Improve Performance
rigorous statistical methods
when needed
Control Performance
Sustains improvement over
the long-term
Disseminates improvement
throughout the organization
Acts as an agent of change
Six Sigma CEO
Organizational
Architecture
Quality Leader/ Manager
(QL/QM)
Master Black Belt (MBB)

Process Owner (PO)
Black Belt (BB)

Green Belt (GB)
Mentor, trainer, and coach of Black Belts and others
Master in the organization.
Six Sigma Black

Belt
Taining Leader of teams implementing the six sigma
Champions
methodology on projects.
Black Belts
Delivers successful focused projects using

the six sigma methodology and tools.
Green Belts
Participates on and supports the project

Team Members teams, typically in the context of his or
Quality Fundamentals/ Kaizen Now her existing responsibilities.
Deployment Responsible for supporting the Deployment Strategy

within Line of Corporate Business/Customer Segment
Champions
LEAN SIX-SIGMA
MANAGEMENT SYSTEM
Lean Six Sigma
Impact on Process!!
First Time Yield People
• Skilled, multi-function
(FTY) Quality workers
• Standardized Work – Training
• Error Proofing – Employee development
• Root Cause Analysis • Black Belt/Green Belt
– Problem Solving Projects Team: Lean Principle
• Predictable Processes – Quality
– Safety • Value Definition
– Machine Reliability
– Total Productive
– Productivity • Value Stream Analysis
Maintenance
– Cost
– ROI Project • Continuous Flow
– Improved up-time
• Structured feedback meetings • Pull production
• Reduced scrap & repairs
• Empowerment • Continuous Improvement
– Involvement
– Accountability
– Responsibility
– Authority
Service quality strategy
Customer requirements
External
Mortgage services Reporting
Operational Procedures, Training + Development

Mortgage process Executive
Reporting
Service Information pack / procedures
Policies Process Resources KPI’s Training Measure and Review
Defined service quality

© Crawford & Company 2002

Hyperlink Defects Termninology in Service Quality
(Hyperlink)
Kinerja = 99,9% Æ Defect = 0,01% = 0,01/100 = 1/1000
Contribute
little to the Lean-SS
bottom line
Focus on achieving
SMART improvements
within
a few months
SMART = Specific, Measurable, Attainable, Result-oriented, Time-bound
Reward System
Activity-based Programs
Result-oriented Programs
BENEFIT OF LEAN SIX SIGMA
MANAGEMENT SYSTEM
Total Cycle Time =
4/116,5 = 0,0343 = 3,43%
Total Cycle Time =
3,5/9,1 = 0,385 = 3,85%
Before After
11 steps 8 steps
(Before:
112.5h)
Before = 116.5 hours)

Cascade
Visual Order
Cleanliness
VISUAL FACTORY
“Ability to understand the status of a
production area in 5 minutes or less
by simple observation without use of
computers or speaking to anyone.”
GARIBALDI INDUSTRIES APPROACH
ROI (MINIMUM): ??%/year

High Quality Glass Product
Competitive On-time
Material
Advantage Delivery
Machine
Labor Process Max.
100% Customer Min. Output
Satisfaction Input Dual Kanban Zero Defects
ISO 9001:2000
Minimum Lead Time Lean-Sigma
Standardized Product & Processes (Procedures)

Garibaldi Approach:
• Increase capacity--without adding more people & resources
• Reduce cost of goods sold
• Maintain or reduce price to be competitive price
• Increase sales
• Increase reward & recognition to all Garibaldi Employees
SMARTER
Contact:
Vincent Gaspersz, CFPIM, SSMBB
The End Specific Goals
Measurable
Phone: 0251-332933 or Achievable
0813-1940-6433 Result-oriented
E-mail: vincentgaspersz@yahoo.com Timely
Empowerment
Reward & Recognition
Smarter:
• Shorter Cycle Time
• Smoother processes
• Simpler rules or procedures

Lean Six Sigma Management System: Prof. Dr. Vincent Gaspersz, CFPIM, SSMBB

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Lean Six Sigma Management System

ADMIN. Lean- Marketing

As long as there is a process that produces an output, whether it is

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6

Design for Six Sigma

Product Development Process

Historical Six Sigma

Contemporary Six Sigma

Just in Time Jidoka

= Value-adding Operation Time (actual assembly or manufacturing operations)

Value-added Ratio at typical manufacturing company

50% Non-value-added 50% Value-added

. . . and Ignore this

Continuous Flow Processing

Total Batch A processing time : 12 minutes

Sets pace of production to

Takt Time (1 min.)

Traditional = People doing whatever they can to get results

Lean = People using standard process to get results

Process Critical Customer

Variation in the Process Output

Output Variation is caused by

Voice of the Customer

Measure Analyze Improve

The DMAIC Model

Analyze process data and determine

Improve the process and remove

Control process performance and

AAB Innovation & the AAB Way Algorithm

Analyze Opportunity  Utilizes multiple tools and

 Acts as an agent of change

Master Black Belt (MBB)

Black Belt (BB)

Six Sigma Black

Delivers successful focused projects using

Participates on and supports the project

Deployment Responsible for supporting the Deployment Strategy

Operational Procedures, Training + Development

Service Information pack / procedures

Policies Process Resources KPI’s Training Measure and Review

Defined service quality

© Crawford & Company 2002

Kinerja = 99,9% Æ Defect = 0,01% = 0,01/100 = 1/1000

SMART = Specific, Measurable, Attainable, Result-oriented, Time-bound

Before = 116.5 hours)

ROI (MINIMUM): ??%/year

Standardized Product & Processes (Procedures)

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Analyze Opportunity Utilizes multiple tools and

Acts as an agent of change