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Lean Sigma Management System

(Streamlining The Business Process)

Presented By:
Vincent Gaspersz, CFPIM, SSMBB
©Vincent Gaspersz, CFPIM, SSMBB 1
Agenda
 Focus on Lean (Lean Definition, Lean
House, Lean Principles)
 Focus on Six Sigma (Contemporary Six
Sigma Approach)
 Lean Sigma Integrated Management
System (Approach and Benefits)
 Lean Sigma Roadmap
 Questions

©Vincent Gaspersz, CFPIM, SSMBB 2


QUESTION?
? 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?

©Vincent Gaspersz, CFPIM, SSMBB 3


Quality Initiatives ??????
Lean Sigma
Six Sigma Quality
Lean Manufacturing
ISO9000:2000
9000:2000
ISO
Supply Chain Management
Total Productive Maintenance
Malcolm Baldrige National Quality Award
Theory of Constraints
Reengineering
Continuous Improvement/Kaizen
ISO 9000 Standards
©Vincent Gaspersz, CFPIM, SSMBB Quality Circles 4

Statistical Quality Control


Focus on Lean
(Lean Principles)

©Vincent Gaspersz, CFPIM, SSMBB 5


©Vincent Gaspersz, CFPIM, SSMBB 6
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

Lean Product Development Process

MATERIAL FLOW

Achieving
Achieving“Flow”“Flow”isisaaKey
KeyObjective
Objectivein
in
Applying
©Vincent Gaspersz,
Applying CFPIM,Lean
SSMBB Principles
Lean Principleswithin
withinan
anEnterprise
Enterprise
7
Lean Manufacturing House
Best Quality - Lowest Cost - Shortest Lead Time
Through shortening the Manufacturing 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

©Vincent Gaspersz, CFPIM, SSMBB 8


The 5 Interdependent Lean Principles
Lean is a
systematic 1 2
approach to
identifying and
eliminating waste
(non-value-added
activities) through
value stream
5
continuous
improvement by
flowing the product
at the pull of the
customer in pursuit 4 3
of perfection
©Vincent Gaspersz, CFPIM, SSMBB 9
Step 1. Customer Value Definition
 Value= Value-Added (VA) + Non-Value-
Added (NVA)
 Non Value Added = WASTE

“Anything
“Anything that
that adds
adds Cost
Cost
to
to the
the product
product
without
without adding
adding Value”
Value” == WASTE
WASTE
©Vincent Gaspersz, CFPIM, SSMBB 10
Value-Added vs. Non-Value-Added
• Value-Added (VA) Activities must meet the following
three criteria:
1. The customer must be willing to pay for the activity
2. The part or object must change
3. It must be done right the first time

Remember: All Three Criteria Must be Satisfied


All other activities are Non-Value-Added (NVA)
and considered sources of waste !!!
The
TheKey
KeyPrinciples
Principlesofof“Lean”
“Lean”are
areto
toIdentify
IdentifyNon-Value-
Non-Value-
Added
AddedActivities
Activitiesand
andFind
FindWays
Waysto toEliminate
EliminateWaste
Waste

©Vincent Gaspersz, CFPIM, SSMBB 11


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)
©Vincent Gaspersz, CFPIM, SSMBB 12
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©Vincent Gaspersz, CFPIM, SSMBB 15
Step 2. Value Stream Analysis
Follow a “product” or “service” from beginning to end, and
draw a visual representation of every process in the material &
information flow. Then, draw (using icons) a “future state” map
of how value should flow.
VALUE STREAM MAPPING

©Vincent Gaspersz, CFPIM, SSMBB 16


Value Stream Map

©Vincent Gaspersz, CFPIM, SSMBB 17


Process Cycle Efficiency =
Total Value-Added Time/
Total Cycle Time =
4/116,5 = 0,0343 = 3,43%

©Vincent Gaspersz, CFPIM, SSMBB 18


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
©Vincent Gaspersz, CFPIM, SSMBB 70 to 95%
19
The Process Improvement “Pitfall”
Typical Value Stream Ratio of
Value-Added to Non-Value-Added Activity
3%
97% NVA VA

Most “Traditional” Process Improvement Where’s


Teams Attack this . . . the Real
Opportunity?

97% NVA

. . . Achieve this . . .
Lean Teams
. . . and Ignore this
Source: C. Fiore; Lean Strategies for Product Development, ASQ, 2003

©Vincent Gaspersz, CFPIM, SSMBB 20


Current State Value Stream Map

©Vincent Gaspersz, CFPIM, SSMBB 21


Step 3. Continuous Flow
 Continuous Flow Through Value Stream
 Creates less inventory
 Lower throughput time
 Increases production
Can be achieved by:
 Improving shop floor layout (not restrict or add movement,
clean and organized, cell layout, meet the customer
demand)
 Reducing in active (obsolete) inventory

©Vincent Gaspersz, CFPIM, SSMBB 22


©Vincent Gaspersz, CFPIM, SSMBB 23
Continuous Flow Production
Traditional Flow Production Process
(stream of water)

Suppliers
Customers
Inventory (stagnant
Flow with JIT ponds) Material
(water in
stream)
Suppliers

Customers
©Vincent Gaspersz, CFPIM, SSMBB 24
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

©Vincent Gaspersz, CFPIM, SSMBB 25


Continuous Flow Improvement

©Vincent Gaspersz, CFPIM, SSMBB 26


Continuous Flow 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
©Vincent Gaspersz, CFPIM, SSMBB 27
Future State Value Stream Map

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BENEFITS OF CREATING FLOW

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Step 4. Pull System
 Pull the product through the value stream
 Authorize production
 Capture Work-In-Process (WIP)

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5. PERFECTION
 Create a clear vision of perfection
 Maximize customer value through NVA reduction
and Bottom Line improvement through Value Stream

 Make waste visible and evident.


“The continuous movement of products and information
through the value stream. The goal is to minimize ‘idle
time’ which equates to waste . . .”

 Problem solving. Achieving “Flow” is a Key Objective


in Applying Lean Principles within an Enterprise

©Vincent Gaspersz, CFPIM, SSMBB 37


FOCUS ON SIX SIGMA
(Contemporary Approach)

©Vincent Gaspersz, CFPIM, SSMBB 38


Focused on Customer Value
LSL USL

Historical Six Sigma

Defect Reduction

Customer
Value Stream
Value
Contemporary Six Sigma
(Lean Six Sigma)

©Vincent Gaspersz, CFPIM, SSMBB 39


Quality Processes Yield Quality Results

Inconsistent Inconsistent
Process Results

Traditional = People doing whatever they can to get results

Consistent Desired
Process Results

Six Sigma = People using standard process to get results

©Vincent Gaspersz, CFPIM, SSMBB 40


Contemporary Six Sigma 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

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©Vincent Gaspersz, CFPIM, SSMBB 43
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
©Vincent Gaspersz, CFPIM, SSMBB 44
LEAN SIGMA
(Streamlining The Business Process)

©Vincent Gaspersz, CFPIM, SSMBB 45


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©Vincent Gaspersz, CFPIM, SSMBB 47
Lean Six Sigma
Lean Six Sigma
 Flow Focused  Quality Focused
 Reduced Flow Time  Uniform Process Output
 Remove Waste  Reduce Variation
 Faster Throughput  Improve Process Capability
 Less Inventory  Improved Quality

Lean and Six Sigma are Complimentary  Lean Six Sigma

©Vincent Gaspersz, CFPIM, SSMBB 48


Lean Six Sigma Tools
Lean Tools Six Sigma Tools
 Value Stream Analysis  DMAIC/DMADV Approach
 5-S  Statistical Process Control
 Kaizen Blitz  FMEA
 One Piece Flow  Capability Analysis
 Pull Systems/Kanban  ANOVA/ANCOVA
 Work Cells  DOE/Taguchi Experiments
 Visual Control  Process Optimization
 TPM  etc
 Vendor Managed Inventory
 etc
©Vincent Gaspersz, CFPIM, SSMBB 49
(Good
(GoodLuck)
Luck) (Random (Systematic
(Continuous
Continuous
Flow
Improvement) FlowImprovement)
Improvement)

Value Stream

2 MBB,
225MBBs,
BBs,
100 GBs,
25 BBs,
500 GBs,
100 YBs
500 YBs Flexible, Capable,
Highly Motivated

©Vincent Gaspersz, CFPIM, SSMBB 50


©Vincent Gaspersz, CFPIM, SSMBB 51
Which Business Function Needs Lean Six Sigma?
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!!!!

©Vincent Gaspersz, CFPIM, SSMBB 52


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©Vincent Gaspersz, CFPIM, SSMBB 54
Lean Six Sigma Product Development 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
Cycle Time and Cost Performance Improvement
CTQ’S

TECHNICAL
TECHNICAL Supplier Rationalization
CTQ’S
REQUIREMENTS Lean Product Development
LIST

BUSINESS
CTQ’S

Lean Six Sigma

Manufacturing Process
Control
Quality Improvement
©Vincent Gaspersz, CFPIM, SSMBB 55
Lean Six Sigma
Impact on Process!!
First Time Yield People
• Skilled, multi-function
(FTY) Quality workers
• Standardized Work – Training Lean Six Sigma
• Error Proofing – Employee development
• Root Cause Analysis • Black Belt/Green Belt Approach
– Problem Solving Projects Team:
• Customer Value Definition
• Predictable Processes – Quality
– Machine Reliability – Safety • Value Stream Analysis
– Total Productive
– Productivity • Continuous Flow
Maintenance
– Cost
– ROI Project • Pull production
– Improved up-time
• Structured feedback meetings • Continuous Flow
• Reduced scrap & repairs
• Empowerment Improvement (NVA/Waste
– Involvement
– Accountability Elimination and Variation
– Responsibility Reduction/Process
– Authority Capability Improvement)

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©Vincent Gaspersz, CFPIM, SSMBB 57
BENEFIT OF LEAN SIGMA
MANAGEMENT SYSTEM

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LEAN SIGMA ROADMAP

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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 Lean-Sigma


Minimum Lead Time

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
©Vincent Gaspersz, CFPIM, SSMBB 74
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

©Vincent Gaspersz, CFPIM, SSMBB 75

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