Fat to Lean: Best practices for converging disparate shop floor systems

Deirdre Jablonski
 Abstract

A common question which often arises is whether or not Lean is only about the shop floor.

While the manufacturing and production floor aspect of a business offers the most tangible and

significant opportunity to leverage lean methodologies, organization can apply the same

principles and philosophies across every aspect of the business. An important feature of a Lean

initiative, as with any business process oriented initiative, is the effective application of

technology. The speed, volume and complexity of business transactions today, now dictates the

use of technology to efficiently support communication and information exchange across

departmental boundaries (Infor Global Solutions, 2009).

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 3

Table of Contents

Table of Contents ............................................................................................ 4

Table of Figures .............................................................................................. 5

Introduction ..................................................................................................... 6

Discussion ....................................................................................................... 7

Manufacturing Systems Convergence ............................................... 7

Normalized Data, Normalized Processes ........................................ 12

Lean Manufacturing through Lean Systems.................................... 15

Conclusion..................................................................................................... 17

References ..................................................................................................... 19
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 4

Table of Figures

Figure 1 - Define, Measure, Analyze ........................................................... 12

Figure 2 - Determine Waste Areas ............................................................... 15

Figure 3 - Improve, Control.......................................................................... 17

 Introduction

At its most basic, Lean is a focus on greater operational efficiency, the elimination of

waste and continuous improvement. The basic concept surrounding the Lean philosophy is to be

able to do more with less. This means processing fewer transactions and with fewer resources,

and only those which are essential to satisfying a customer order (Infor Global Solutions, 2009).

Though the concept of Lean has been around for many years, it is only recently, with the advent

of modern information technologies, that an enterprise can realize the true vision of Lean. With

leading edge manufacturing execution systems (MES) which combine technologies such as web

services and XML, radio-frequency identification (RFID), and other real-time shop floor

technologies manufacturers can now gain visibility into their entire supply chain, from source

through consumption. Manufacturers leveraging these technologies while driving towards a

fully Lean system will see themselves rise to the top of their business sectors (AMANDAA,

2006). This paper examines the use of the lean DMAIC methodology in a manufacturing setting

to assess current shop floor processes and systems for convergence into a single MES. At the

core of Six Sigma is its quality improvement model, called DMAIC, for Define, Measure,

Analyze, Improve and Control. Each of the DMAIC phases has clear objectives, tasks and

proven techniques. This continual loop provides a quality improvement cycle for products and

services, starting with key measurable objectives definition through to implementing

recommended solutions and sustaining improvement until further enhancement is required (Ho,

2008). The Six Sigma DMAIC methodology is a proven way for solving a problem where the

solution is unknown (Aruleswaran, 2008).

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 6

Discussion

The plant is the most logical starting place for a Lean initiative. Many Lean practitioners

promote the use of manual Lean techniques and while plants suffering from poor quality, excess

work in process, and long cycle times often see dramatic improvements based on these manual

techniques, over time these plants find that manual methods are labor intensive and do not scale

across the factory (AMANDAA, 2006). DMAIC is the central unifying methodology which

provides a framework for problem solving and continuous improvement determined by critical

business needs. Organizations using the DMAIC methodology can apply the components from

an information technology perspective to facilitate convergence projects.

Three key practices that remain central to any convergence effort are to modularized

disparate systems to determine fit in the new landscape (define), examine current shop floor

applications and the functions they perform (measure) and finally assign systems to a function

within the overall business process such as inventory management, serialization, etc. (analyze).

The next step in the process is to determine waste areas. When an organization begins to

normalize their processes, the process of normalizing the data follows as a natural part of this

exercise. The final steps include the process of converging disparate applications into one

system with one set of processes (improve) and implementing a continuous improvement plan

(control) which includes a plan to institutionalize the improvements to control future

performance (Brecken, 2007).

Manufacturing Systems Convergence

Modularize disparate systems to determine fit

With processes and technology in unison, manufacturers can achieve higher levels of

business performance, turn resources into assets and discover unique opportunities for
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 7

competitiveness. Bailey (2009) indicated organizations have already begun the work to reinvent

their information technology (IT) infrastructure and are quickly moving to more efficient

platforms. Over the past fifteen years, organizations have traditionally sourced multiple products

from a variety of suppliers as they construct their IT solutions, often acting as their own systems

integrator in mixing and matching systems and application software to optimize the performance

of their applications. Today, IT organizations can select technologies across a broad spectrum of

solutions, from best-of-breed to low-cost alternatives. Until now organizations have expected

their suppliers to provide multiple options across their technology portfolio. As a result, the IT

market has evolved to a point where technology has become almost completely modular (Bailey,

2009).

Experts at IDC now believe companies are entering a new business cycle in IT in which

they are prepared to trade multiple best-in-class applications and platforms for both ease of

installation and simplicity of management. Bailey (2009) advised convergence not only lowers

complexity for customers but also is an “enabling vehicle for a shared-service model of

computing, one that maximizes hardware utilization, improves availability, contains management

costs, and reduces time to deployment” (Bailey, 2009, p. 6). As previously mentioned, this first

means to achieving convergence is the Define stage. During the Define phase of a Six Sigma

DMAIC project, leadership is responsible for clarifying the purpose and scope of the project, for

getting a basic understanding of the process to be improved, and for determining the customers’

perceptions and expectations for quality (Wiesenfelder, 2009). The team identifies and scopes

an improvement initiative, essentially a problem requiring resolution, in this phase. This

includes describing the nature of the problem or improvement together with any supportive data

or information that may lead to what is still an unknown solution. In essence, teams do not arrive
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 8

at the solution at in a single step, but rather only after an incremental series of steps has occurred

(Romero, 2010).

Expanding on this explanation, the Define stage typically starts with a problem statement.

Where the problem statement describes the pain, the next statement should describe the relief

that is to be expected. Following that exercise, the process moves into a phase typically defined

as Voice of the Customer. There are typically two major categories that are required; output

requirements and service requirements. In a convergence project the output shall include the

final product of the convergence activity. The service requirements as they relate to this type of

project shall include the definition of ongoing support and customer service of the output. The

final step in the Define stage is to document the process. Most professionals use a high level

process map to depict the final solution (Dager, 2009).

From an IT perspective the organization must focus on consolidating data and

applications. During the process of documenting the problem statement, experts identify

disparate applications and determine where the functions may fit in the future environment. The

end goal is to eventually unite multiple technologies into a single, tightly integrated system that

is application aware, automated, and governed by protocols. The first steps to achieving this

goal are to modularize these applications and systems to determine best fit in the unified

platform. This activity includes a definition of each application and the supporting system. The

last step in this phase is to document these definitions for analysis and comparison in the next

stage of the process.

Analyze current applications and the functions they perform

This phase is analogous to the Measure phase of the DMAIC methodology. Wiesenfelder

(2010) explained key components of this phase include creating a process map, collecting
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 9

baseline data and conducting data analysis. The goal of the Measure phase of a DMAIC project

is to get as much information as possible on the current process so as to fully understand both

how it works and how well it works (Wiesenfelder, 2010). Process maps and flowcharts are

useful tool when carrying out this exercise. From these maps the organization and project team

can both get a sense of the types of applications they are using and for what purposes. This

enables the convergence team to fully scope the functionality into the new system landscape and

also the application components that are part of the new package.

Once the team compiles the process maps, they should review them with management to

ascertain information about potential contributors to problems and inefficiencies. The team

should watch for evidence of missing steps or extra steps that cause delays and bottlenecks.

Evidence of variations in how users perform certain steps and anything else that could lead to

defects, inefficiency and problems should also become apparent as a result of this measurement

analysis (Wiesenfelder, 2010). Teams will use this data in particular to determine waste areas.

With special regard to convergence projects, the outcome is a vital, not to mention useful, by-

product of the Measurement phase.

Analysts at IDC believed a convergence project is an evolution, not a revolution.

Evidence shows how over the past twenty-five years, modular technologies became more

integrated during each technology cycle (Bailey, 2009). As the convergence team measures the

performance and functionality of each process and application, the overlap becomes clear. The

results of this effort feed into the next phase where the team assigns each application to a

function within the new process and software package. This next phase in the convergence

project is comparable to the Analyze stage of DMAIC methodology.

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 10

Assign applications to a function within the overall future business process

Now that the team is familiar with the functions within each application of the current

disparate landscape, and the purpose of each system, it is time to assign these applications to

functions within the future-state software package. Bailey (2009) stated the greatest challenge

for adoption of converged systems is not technology but a change in thinking. To realize the full

benefit from converged systems, organizations and their IT departments will have to think

differently (Bailey, 2009). In the traditional definition of the Analyze phase, teams pinpoint the

location or source of problems by building a factual understanding of existing process conditions

and problems. This helps to focus the problem statement. In a convergence project, teams will

use this phase of the project to confirm theories developed in the previous phase to verify the

identity of the root cause(s) of the problem. The verified cause(s) will then form the basis for

solutions in the Improve phase (Bonacorsi, 2010).

Through analysis, the team can determine the causes of the problem that needs

improvement and how to eliminate the gap between existing performance and the desired level

of performance. This process involves discovering where the process breakdowns occur and

why they happen. In order to accomplish this, the team must identify the key variables that are

most likely to create process variation. To take this one step further into the realm of a

convergence project, the analysis must include a detailed examination of the current state to

determine the opportunities for improvement by using the new packaged software (Bersbach,

2009). Bersbach (2009) suggested two other areas to examine during this stage before moving to

Improve. He proposed teams should determine value to the customer (in this case the user) when

selecting the fit of each function in the new landscape, and secondly, teams should ensure they
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 11

have validated the as-is cause of the process breakdowns or system failures in the current

applications (Bersbach, 2009).

To answer the question above it may take several tools and techniques to collect the facts

and data related to each process. In the Analyze stage, one constructive tool teams can use is the

Value Flow Analysis, as identified by Bersbach (2009). This analysis takes the process

observation log that one usually creates in the Measure stage, and reviews each step listed and

the time it takes to do that step, to determine if it is of value or not. The next exercise is to sum

up all the times of the value added and non value added steps. In this way, Bersbach (2009)

believed project team members can see how much time users and shop floor operators spend

creating value for their customers and which steps to reduce or eliminate from the process

altogether because they do not create any value for the user or the customer. As supported by

Bersach (2009) this is an elemental approach to highlight areas for improvement as a result of

implementing the new software package.

Systems Convergence: Define, Measure, Analyze

Objectives Main activities

 Identify and validate the
improvement opportunity
 Develop business processes
 Define critical customer/user
requirements
 Ascertain information about
potential contributors to problems
and inefficiencies
 Confirm theories to verify the
identity of the root cause(s) of the
problem
 Create problem statements
 Identify current applications
 Determine if there is a functional
fit in the new landscape
 Create process maps
 Collect baseline data
 Locate source of problems by
building a factual understanding
of existing process conditions
and problems.

Figure 1 (“Using DMAIC to improve your business processes“, 2005)

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 12

Normalize data, services and business processes – discovering waste

This stage is a natural by-product of the overall convergence process. The processes

within the convergence and implementation project assume a review of data and applications

will emphasize areas of duplication. An essential part of the Six Sigma method is to determine

process wastes and weaknesses. Some experts consider this exercise part of the Improve stage of

a traditional DMAIC project; however it is important from a convergence perspective to discuss

this as part of the output from activities conducted in the Analyze phase. The purpose of the

Analyze phase is to make sense of all the information and data collected in Measure, and to use

that data to confirm the source of delays, waste and poor quality (George, Rowlands, & Kastle,

2004).

One of the top waste areas in an organization comes from redundancy. A process that

involves utilizing the same data in several systems requires extensive information and data

exchange to complete the task. This results in more waste from over-processing of the data and

waiting. Time spent waiting for results from disparate applications has a direct impact on

internal customers (users), resulting in longer processing times for each system to record and

process the data, and an indirect impact on external customers who must tolerate extended

product delivery times resulting from dysfunctional production processes (Aruleswaran, 2008).

Ugboma (2005) explained the process of planned data redundancy as a solution to the

duplication issues that face companies with disparate applications. Planned (controlled) data

redundancy is the required replication of data to achieve a positive end to the successful

implementation of databases that can adequately support any data- or information-generating

system. This type of redundancy does not usually require the replication of records and is only

required when reorganizing data files that any system needing data depends on (Ugboma, 2005).
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 13

Suppliers, Inputs, Processes, Outputs, and Customers (SIPOC) diagrams are a useful tool to

identify and eliminate waste during this stage.

Normalization is the course of action used by database developers to identify and remove

problems from databases, and restore integrity to data in the data files. Normalization uses

benchmarks called normal forms (NF). According to Ugboma (2005) normal forms are the

standard measurement tools used for reorganizing the structure of databases. In addition to

reducing unnecessary duplication of data, normalization assists in improving an entire database

structure (Ugboma, 2005). By eliminating data redundancy, data normalization also promotes

data reuse. Reusability is also a primary goal of service-orientation. As Erl and Wilhelmsen

(2009) explained it, service normalization is one of many patterns that support service

reusability, but its goals go beyond that. Like data normalization, the service normalization

pattern is intent on reducing redundancy and waste in order to avoid the governance burden

associated with having to maintain and synchronize similar or duplicate processes (Erl &

Wilhelmsen, 2009).

Applying Erl and Wilhelmsen’s (2009) normalization technique to business process

normalization, research indicates organizations can apply a number of business rules to the

definition and meaning of data, so enabling business experts and IT experts to identify data and

information necessary for the business processes based on current requirements, as well as

anticipated future requirements. Business normalization ensures the many uses of data

throughout an organization can be satisfied from a single non-redundant version. Thus the

maintenance of information derived from a single data version is consistent and up-to-date,

resulting in the definition of common reusable business processes that operate efficiently against

the data (Riihinen, 2008).

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 14

Determine Waste Areas

Objectives Main activities

 Recognize and eliminate waste
 Identify and remove problems from
databases
 Reduce redundancy in data,
services and business processes
 Utilize value stream maps to
identify waste areas
 Utilize Normal Forms to construct
new data files
 Apply new business rules to the
definition and meaning of data

Figure 2 (“Using DMAIC to improve your business processes“, 2005)

Lean Manufacturing – implement an integrated system with one set of processes

In this era of globalization the ability to quickly adapt and continuously improve is much

more than a technical challenge. The rate of change in the world is increasing. Strategic and

tactical issues will become more complex and those that change at the fastest, with accuracy, will

have the competitive advantage. Lean centers on creating more value with less work by

increasing efficiencies in business processes (Misiewicz, 2010). Improvements in existing

systems are necessary to bring the organization towards achievement of the organization goals.

Creative development of processes and tools brings about a new lease on life for organizational

processes and brings the organization nearer to its objectives (Jacowski, 2007).

Lean is a transformational change, one that moves the organization to a planned state. It

involves the business strategy, organizational design, structure, culture, and processes of the

entire value stream. It creates and reinforces the concept of continual change through the

elimination of waste, improving effectiveness of the entire value stream (Ferguson, 2007). The

later stage of improvement focuses on optimizing and controlling processes by improving value

added work steps, shifting the process average and reducing variation around it, improving

process flow and reducing cycle time. Once the team chooses and subsequently implements the

best solution, testing occurs with an analytical study to ensure the predicted improvements
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 15

actually materialize. At this point, the team is basically optimizing to find the operating “sweet

spot,” searching for the right combination of factors that would suggest a particularly suitable

solution (Snee, 2005).

Deploying the system with improved business processes is the culmination of all prior

efforts. It is also the point in the project that often requires the most coordination, due to the

breadth and variety of activities the team is required to perform. Mulholland (2003) conveyed in

The New York State Project Management Guidebook, as the team enables various system

functions, validation that the application is performing to expectations also occurs since there

may be times when certain system functions seem suspect. As the team rolls out a new system to

its target audience, they must remain attentive to how users perceive the new functionality. The

fact that functions once present in legacy systems no longer exist or work differently may cause

some user to view the new system negatively. By understanding some of the dynamics behind

how user perceive the new system, the team may be better able to identify or promote some of

the benefits the improved business processes combined with the new system provides

(Mulholland, 2003). This stage also involves the shut-down of legacy and redundant

applications, and enhancement of the selected application. From their experience as analysts

with Infosys Technologies, Sai Kumar, Rajan, and Dewnagan (2006) suggested a phased run-

down approach for legacy applications, and a clear transition strategy for migrating to the chosen

application would ensure a successful implementation. These researchers also suggested

completing enhancement of the chosen application in a phased manner as a guarantee of success

(Sai Kumar et al., 2006).

The final step of DMAIC is control and it focuses on making sure the gains from the

improvement project are permanent. The improvements ingrained into the fabric of the process
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 16

should make it easier to adhere to the new changes rather than revert to the old ways. The

control step integrates the new improvements into the process by including them in process

documentation and when necessary, auditing the process to ensure adherence to changes. The

control step also uses lean six sigma tools like the process control chart to describe and manage

critical process metrics. Statistical process control charts help to monitor the process and alert

process owners when performance changes (Bersbach, 2009).

A typical monitoring plan for system convergence control would include metrics for

continuous measurement in the form of Key Performance Indicators (KPIs). These indicators

represent characteristics of the process that are critical to quality or some other measure the

DMAIC project team finds critical to the process. Once in place, these KPIs enable the business

to measure how it is currently performing against customer expectations (the baseline) and then

to track this performance over a period of time. Reliable business measurement systems provide

the data that shows business leaders what is really happening in the business from shop floor to

top floor and are, therefore, a critical cornerstone of any Six Sigma and Lean initiative (Gibson,

2007).

Lean Manufacturing: Improve, Control

Objectives Main activities

 Identify, evaluate and select the
right solution
 Focus on optimizing and controlling
processes
 Identify what will happen if needed
improvements are not made
 Develop a monitoring plan
 Shut-down legacy systems
 Evaluate and select the solution
 Improve value added work steps
 Implement monitoring plan with
KPIs for performance
measurement
 Develop a clear transition
strategy

Figure 3 (“Using DMAIC to improve your business processes“, 2005)

ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 17

Conclusion

Bailey (2009) advised as the market moves into the next phase of IT, the ability to lower

complexity and improve flexibility will be crucial, especially as businesses recover from the

economic downturn and look toward innovation as a means to drive revenue and profits. For

most businesses today, IT is at the heart of bringing new products and services to market, and a

flexible infrastructure that can support a broad set of applications without a linear increase in

management overhead will be imperative. Organizations need to consider a set of solutions they

will be able to leverage for the next several years (Bailey, 2009).

As an analyst for IDC, Bailey (2009) maintained that as a new cycle for technologies

emerges, IT organizations will find they need to think differently about not just their systems but

also their operations, policies, processes, people, and strategy. This type of transformation

requires that IT groups be able to take a holistic view of technology as servers, applications and

management tools also converge (Bailey, 2009). The end goal for organizations is to seek to

improve the business performance of IT application portfolios systematically and proactively by

quantifying the value of each application and eliminating or retiring redundant end-of-life

applications if they want to remain agile in today’s business environment (Thakur & Dubey,

2009).
ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 18

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ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 19

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ASSIGNMENT 1 - FAT TO LEAN: BEST PRACTICES 20

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