LEAN SIX SIGMA & KAIZEN
LEAN THINKING CONCEPTS
Lean Thinking applied in Thinking demonstrates a positive impact on productivity, cost, quality, and timely delivery of products and services.
Driving out waste is how Lean Thinking begins so that all work adds value and serves the customer’s needs. Identifying value-added and non-value-added steps in every process is the beginning of the lean thinking journey.
In order for lean principles to take root, an organizational culture that is receptive to Lean Thinking must be created first by the leaders. The commitment to Lean Thinking must start at the very top of the organization. Staff should participate by helping to redesign processes to improve flow and reduce waste.
Lean management principles have been used effectively in manufacturing companies for decades, particularly in Japan. There are also many similarities to other types of businesses. Workers must rely on multiple, complex processes to accomplish their tasks and provide value to the customer. Waste – of money, time, supplies, or good will – decreases value.
Instead of constantly reinventing business models, lean thinkers go back to basics by asking what the customer really perceives as value. It is often not at all what existing organizations and assets would suggest.
The next step is to line up value-creating activities for a specific product or service along a value stream while eliminating activities (usually the majority) that don’t add value. The lean thinker then creates a flow condition in which the design and the product or service advance smoothly and rapidly at the pull of the customer (rather than the push of the producer).
Finally, as flow and pull are implemented, the lean thinker speeds up the cycle of improvement in pursuit of perfection. The first part of this program describes each of these concepts and makes them come alive with striking examples.
Lean Thinking clearly demonstrates that these simple ideas can breathe new life into any organization in any country.
Most managers need guidance on how to make the lean leap in their organization. A step-by-step plan of action is provided.
Muda is the Japanese word for “waste,” specifically any human activity which absorbs resources but creates no value: mistakes which require rectification, processing steps which aren’t actually needed, movement of employees and transport of goods from one place to another without any purpose, and goods and services which don’t meet the needs of the customer.
Each organization tends to define value in a different way to suit its own needs. When these differing definitions are added up, they often don’t add up. In the process of value definition, to make it more concrete, simply ask what is most important to you in your current job and to your firm and compare it with what is most important to your ultimate or final customer.
Value Stream is a term applied to the entire set of activities running from raw material to finished product or service for a specific product or service, as we seek to optimize the whole from the standpoint of the ultimate customer of the goods or service.
The flow is the progressive achievement of tasks along the value stream so that a product or service proceeds from design to launch, order to delivery, and raw materials into the hands of the customer with no stoppages, scrap, or backflows.
The pull is a system of cascading production and delivery instructions from downstream to upstream activities in which nothing is produced by the upstream supplier until the downstream customer signals a need. It is the opposite of push.
Perfection is the complete elimination of muda so that all activities along a value stream create value.
Lean Thinking offers a new method of thinking, of being, and above all, of doing for the serious long-term manager – a method that is changing the world.
SIX SIGMA CONCEPTS
Six Sigma Methodology of Process Improvement is a business strategy that is customer focused. It is a project- oriented process improvement approach to solve recurring problems, to reduce cycle time, to reduce cost, to comply with regulatory requirements, and to improve quality, etc. The projects are identified at the top levels of the organization which, when completed, identify and modify process related issues that hinder optimum performance.
The project work is carried out by a cross-functional team that involves employees from all levels of the organization. The team is led by a process improvement master (PIM) who is trained in the techniques and tools of Six Sigma.
Six Sigma strategy was first adopted by Motorola in late 1980’s as a way of improving performance; that is, to improve the quality of their products. Before implementing this strategy, it was acceptable at Motorola for a process to perform at +/- 3 sigma level, i.e., a percent performance of 99.73. The managers of Motorola decided to be stricter about their quality and changed the acceptance of the quality criteria from 3 sigma to six sigma and from a percent defect to parts per million defects.
A typical 3 sigma level of performance translates into 66,807 parts per million defects whereas the Six Sigma strategy translates to a quality of 3.4 parts per million defects.
The tools and techniques of Six Sigma can by utilized not only to reduce defects but also in other aspects of the organization such as improving safety and reducing down time. The methodology involves five major steps. These are: Define, Measure, Analyze, Improve, and Control.
Step 1. Define project
This involves identifying a project. Projects should be selected on the basis of their importance to their business strategy. Customer opinions in selecting the projects lead to better selection of projects.
Step 2. Measure the process for current performance
This step involves creation of a process map for every step in the process with process inputs and process outputs. The information from a process input and process output is utilized to create a cause and effect matrix which ranks the process outputs in relation to their importance to customer requirements. The process outputs that have the highest ranking go to the analysis phase.
Step 3. Analysis phase
The analysis phase involves a) doing a failure modes and effects analysis to identify failure modes of key input variables, b) doing a multi-vari study to identify potential key inputs, and c) analyzing data to prioritize key input variables.
Step 4. Improvement phase
Verify critical inputs using design of experiments, determining the optimum operating window and updating the control plan.
Step 5. Control Phase: Process control
Finalize the process control plan and continue ongoing verification of the process stability and capability. If the process is out of control, go back to the measurement phase and follow through the rest of the steps until process is in control and capable.
Implementation of Six Sigma should be a project-based approach that is tied to the process and, when implemented, can have significant impact to the bottom line. Projects should be selected on the basis of customer requirements and feasibility of implementation. It involves breakdown of barriers of different functional groups and levels.
It is important to select important metrics that can be measured and establish goals. Some typical of metrics are:
- Sigma quality level
- Cp, cpk, Pp, Ppk
- Defects per million opportunities (DPMO)
- Cost of poor quality (COPQ)
- Number of typos in a document
- Medication errors
- Post sales repairs
Typically a Six Sigma expert leads a cross-functional team from the organization through a project to improve performance of the operation. This project leader is usually trained as Black Belt in Six Sigma methodologies and is known as a process improvement master or (PIM). The project should have a supporting sponsor known as the Champion of the project or the process owner.
Generally, the champion is a senior manager. The decision of undertaking Six Sigma projects usually are undertaken at the uppermost level of the organization and are communicated through proper channels to plant managers or on-site managers who act as the project champion and take ownership of the project.
When it comes to making your business more profitable and successful, don’t look to re-engineering for answers. A better way is to apply the concept of Kaizen, which mean making simple, common-sense improvements and refinements to critical business processes.
The result: greater productivity, quality, and profits achieved with minimal cost, time, and effort invested. You learn how to maximize the results of Kaizen by applying it to business processes involved in the manufacture of products and the rendering of services – the areas of your business where the “real action” takes place.
Rooted in the two thousand-year-old wisdom of the Tao Te Ching – “The journey of a thousand miles begins with a single step” – Kaizen is the art of making great and lasting change through small, steady increments. Kaizen is the tortoise versus the hare. Kaizen is the eleven Fortune 500 companies that significantly outperformed the market through moderate, step-by-step actions.
Kaizen is losing weight not by a crash diet (which more often than not crashes) but by eating one bite less at each meal – then, a month later, eating two bites less. Kaizen is starting a life-changing exercise program by standing–just standing – on a treadmill for one minute a day.
Kaizen is the gentle but potent way to effect change. Beginning by outlining the all-important role that fear plays in all types of change – and Kaizen’s ability to circumvent it – the Small Steps explain:
- How to Think Small Thoughts
- How to Take Small Actions
- How to Solve Small Problems
- How to Perform Mind Sculpture – visualizing virtual change so that real change comes more naturally.
- Why small rewards motivate better than big rewards.
- How great discoveries are made by paying attention to the little details most of us overlook.
- Kaizen Events are the ideal tool to achieve breakthrough results. Learn how to:
- Grow your own internal Kaizen Event leaders with your outside consultant.
- Review a checklist of preparatory steps you must take to lead your Kaizen team to success.
- Understand the results Kaizen Events should deliver, and how to set achievable breakthrough goals.
- Chose team members for your Kaizen Events, and why asking for volunteers is not the best answer.
- Teach your team to identify and eliminate non-value-added steps, and how doing so will improve your quality, productivity, and delivery.
Learn what to do each day of the Kaizen Event, and how to stay on track as well as how to avoid a long list of lingering action items after your Kaizen Events. Discover how to sustain the results attained during Kaizen Events over the long-term.
Learn to understand the limits of Kaizen Events and how to accelerate improvement after the first two years. Discover how to use Kaizen Events to improve non-manufacturing areas like sales, customer service, product development, receiving, MIS, and accounting. And more!
Sample Two-Day Program
Day 1 – Part I – Quick and Easy Kaizen
- Introduction – What is Kaizen?
- Turning Ideas into Success
- Improving by Changing Methods
- Small Changes, Not Big Changes
- Changes with Realistic Constraint
- Continuous Change
- Application Exercise: Breakout Teams
Day 2 – Part II – Quick and Easy Kaizen
- Kaizen Improvement Activities
- Surfacing Ideas
- Visualization and Inspection
- The Power of Accumulating Small Changes
- Creating is Difficult – Utilizing Existing Functions
- Application Exercise: Breakout Teams