Lean Six

Sigma

Lean Six Sigma

DMAIC Approach

Copyright 2005, AIT Group Inc. All rights reserved. 1

 Lean Six
High Level DMAIC Approach Sigma

Define Measure Analyze Improve Control

• How will we address
• When did it happen? • What does the DOE Org. issues?
• How often does this happen? • What is the sub-
• Where did it happen? process plan look like? • How will we address
• What trends have we grouping strategy?
• What is the success criteria? •What responses are we Behavioral issues?
observed relative to the target?
interested in (Average,
Range)?
NEM • Is the • What variables do we
Preliminary Advanced Classification
Baseline measurement want to optimize? Why?
Data Analysis NEM Of Control
(IMR) process capable?
(XbarR) Issues
• Is the test a
• Is the process destructive test? • What variables do
• What variables are DOE Planning
• Where in the process do capable? we need to control?
contributing to mean Template
we need to scope efforts? • Do we want to Measurement shifts?
• What is the target value? reduce variation? System • What control
• What variables are
• What are the specs? • Do we want to Analysis • What observations methods will be used
contributing to
shift the mean? did we have during the to ensure gains are
variation?
experiment? sustained?
Process Components • What roles need to
SIPOC Capability Of Variation be established to run Control
/ ANOVA the DOE? Methods
• What changes have been
made to the process? • What is causing failure? DOE •Who is responsible
• What possible variables • What is the impact of Execution for implementing the
• How much waste is in relate to the change ? failure? control?
this process? • How do we mitigate the risk • What variables are
• What is our value Process of failure? critical to the process? •Who is accountable
added percentage? Mapping • How should the for the process
critical variables be results?
FMEA set?
Value Stream • What does the process
Mapping look like? Operator & Control
• What does the process Product DOE Analysis Plan
look like from the Activity Analysis & Results
product’s view?

Copyright 2005, AIT Group Inc. All rights reserved. 2

Funnel-Down Many Variables to the Critical Few! VELOCITY
OPPORTUNITY
Lean Six
VARIATION
OPPORTUNITY
(Reduce Waste) Sigma
(Reduce Variation)
Thought Map

Define x x x xxx x xx x x x x Value Stream

TMAP
Define x x x x
x x x x x x xx x x x x x
Mapping
SIPOC
Product Families

x’s
Detailed Process Map
x x x x x PMAP
x x Product Flow

ny
x
x xx x x x x x
Analysis

Ma
Failure Modes Analysis
Measure
Measure x FMEA
Employee Activity
Analysis
Measurement System
Set-up MSE
Reduction
x x x x x Numerical Evaluation
of Metrics (NEM)
Analyze
Analyze x xx x x

s
T-Test, Chi Square,

X’
Material ANOVA, COV
x xx

w
Replenishment
Design of Experiments
xx
Fe
Improvement DOE
Improve Considerations
Improve Regression Analysis
Workplace Design

5S Implementation
xx Control Strategies
Control
Control x x Standard Work
Mistake Proofing
Performance
Metrics
Y=f(x)

Copyright 2005, AIT Group Inc. All rights reserved. 3

 Lean Six
Define Measure Analyze Sigma
Project Charter
Numerical Evaluation Measurement System Hypothesis
of Metrics How is the Evaluation Testing
What
process Gage name:
Date of study:
Gage R&R (ANOVA) for Labor Cost/T Reported by:
Tolerance:
Misc: variables
performing Components of Variation By Sample
100
%Contribution
%Study Var
500

are causing
today? 400

Chi-

Percent
50

0
300

200
Gender
variation?
50
Gage R&R Repeat

R Chart by Administrato
1
Reprod

2
Part-to-Part

3
Sample

500
1 2 3

By Administrato
4 5

Square
UCL=43.76

Sample Range
40

30 400

20
R=17 300
10

Thought Map 0
0

Xbar Chart by Administrato

LCL=0

Administrato
200

1 2

Administrato*Sample Interaction
3

T-Test ANOVA
Project Justification
1 2 3 500 Administrato
500 1 One-way ANOVA:
Total No Errors versus Hiring Location (Site)

Sample Mean
2
Weekly vs. Quarterly Grant Date

Av erage
400 400 3 Source DF SS MS F P
Hiring Loc 3 2.12 0.71 0.31 0.821
UCL=365.8 1/1/02 – 12/31/03 Error 117 269.95 2.31
Mean=348.4
LCL=331.1 Total 120 272.07
300 300 Two-Sample T-Test and CI: Weekly, Quarterly

Problem Resolution 6σ Project Phases 200 Weekly

N
105
Mean
55.41
StDev
8.63
SE Mean
0.84
S = 1.519 R-Sq = 0.78% R-Sq(adj) = 0.00%

Production Market Methodology

200 Quarterly 8 55.50 8.21 2.9 Boxplot of Total No Errors by Hiring Location (Site)

Product Line Sales $ (YTD) Gross Margins 0 Sample 1 2 3 4 5 Estimate for difference: -0.089083
10

Volumes Comments 95% CI for difference: (-7.056468, 6.878301)

T-Test of difference = 0 (vs not =): T-Value = -0.03 P-Value = 0.977 DF = 8
8
Hiring location is
not a significant
contributing factor
Establish Project Scope

Data

Total No Errors
High vol -Growing 6 to errors!
Brackets $ 70.3 Million $ 2.8 M / 39% 80 Million XW = 55.41 XQ = 55.50

Cylindrical Define 4

$
Conclusions:
2
There is no significant difference
High vol. Growing Baseline Process σˆ
W = 5.63 σˆ
= 8.21
between weekly and quarterly
0

Wheels $ 60 Million $ 2.3 M / 38% 94 Million

Q

grant dates.

Integrity?
Field Sales TO TO - RML

Autom. Hiring Location (Site)

Large Diameter
Closures $ 31.1 Million $ 1 M / 33% 15 Million Characterize Processes
Old Equip. Measure
Hydraulic
Shafts $ 21.5 Million $ 1 M / 40% 5.4 Million
What is
ID Process
Small batches Failure Modes
High Labour
Separated Operations $ 1.7 Million $ 0.3 M / 19% 1.3 Million
Old equip. Evaluate
Analyze Measurement Systems
my project

$
Seals $ 5 Million $ 0.7 M / 7% 4.5 Million Automotive
ID Critical Variables
Other Products $ 4 Million $ 0.3 M / 17% 9.3 Million

Improve Implement
strategy?
Process Improvements

Control Control/Maintain

Failure Modes &

Process Improvements

SIPOC Process Map

Process Name: Copper Tolling
Business
Effects Analysis
Failure Modes and Effects Analysis:
Process Owner: Eric Sandford Product Portfolio
Plan Plan
Suppliers Inputs Process Outputs Customers Quote
(Providers of the (Resources required by (Top level des cription of the activity) (Deliverables from the (Stakeholders who place the requirements Part/process Failure Failure Effects S Causes O Controls D R Actions
Identify Determine Customer Business Proceed
required resources) the process) process ) on the outputs ) Yes Yes (What is the Mode (How does the failure E (What is the root C (What controls E P (What actions are
Requirements
Product Business With
Requirements
Portfolio Plans Opportunities Directed? Pursued? Sourcing function of each (Describe what affect the function of V cause reason for C are currently in T N being done to
No Quote
Copper Manager Orders quantity Quantity per merchant. Requirements Copper delivered Cathode delivered N Vehicle Volume N! Customer Directed Business C Profit Margin Letter to step?) could go the step?) the failure?) place to catch eliminate the cause?)
received from
from Delphi plants Delivered/Timing
Delphi Plants
to suppliers for on time, quantity, Fabrication Suppliers N Vehicle Timing S CI0 (Budget, Resources)
No No C Costs to Do Ford
wrong.) or prevent this
to merchant transformation N Content S PI (Budget, Resources)
right brand, and quality
N Ford Goals & Objectives N! ‘In Your Head’ failure?)
N Personalities/Relationships S Opportunity Screener (Budget, Resources) No Quote
C Customer Strategy/Portfolio Price, Quantity or Need to study dispute
C Divisional Strategies C Doesn’t Fit Divisional

Critical X’s
S Divisional Processes
Product Strategy Customer disputes Work-scope does issues for reduction in
Delphi accounting Index used, timing & Accuracy C Doesn’t Fit Pursuit
purchasing quantity's delivered &
N Divisional Intelligence Execute Plan Invoice is invoice delaying not agree with Pricing 8 disputes, Focus on
S Divisional Quoting Philosophy Apply Business
reported. Copper Tolling
No Yes Divisional C Poor Business Case Issue Invoice incorrect payment (40 days) 5 quote 4 database 4 0 Price
Lessons
Pursued? Strategic
Delphi Plants Forecast from D Plants Level & Stable
Learned Mis- Strengthen ATL
Analysis
PC&L (Customer) C Budget Disconnects
C Resource Disconnects N! Relationships Customer has Delay in payment communication communication with
Shared Information

VOC
C Poor Documentation N! Strategic Importance
Forecast Level Knowledge Base Review and dispute with due to invoice between ATL and 7 Billing by incentivised
N ROLR (Right of Last Refusal)
C Red Flags Strategy Leveraged Synergies confirm invoices invoice dispute (40 days) 5 Billing 3 None 5 5 roles
C Strengths Note: Not part of
Continuous strategic analysis
Improvement
C Divisional Product Strategy Heavy workload
Merchants Global sourcing Selection of merchants C Pursuit Plan for selling process
supply quotes quotes based on Dispute Slow response Delay in payment creating
resolution & re- by business due to dispute (40 conflicting 7 Reduce disputes to
Delphi legal risk Bailment contract Risk protection Info Identify
management (t.o), Shared Yes Relationship issue unit days) 5 priorities 3 None 5 5 alleviate workload
When
purchasing
fabricated
Between Broker -or-Share
product is Divisions? Knowledge Lack of funds Limited budget Work with Customer to
Buyer and receipt Dacor invoices, plant Accurate paid Payment to fabrication Approve budgeted for Delay in payment allocation for Accounts 6 increase budget

How do we
Unified Front to Customer C Tech Shows
clerk receipts, fabrication supplier Per terms correct
buyer P.O. 's +
Strategic Analysis for Selling (comparison & synergies applied) C Customer Contact Calls payment payment process (30 days) 4 weekly payments 3 payable policy 5 0 allocation for payments
amount Divisional Intelligence & Lessons Learned (comparison & synergies applied)
No C Influence Peddling
Philosophy of Quoting Techniques (comparison & synergies applied) C! Divisional Strategic Analysis
Delphi cost Delphi inventory records Inventory Reconciliation Inventory accounting Key:
accounting and costs Accurate quantity's Delphi Complete Actions for improvement and next focus area identified
Supplier cost ! - Critical

mitigate
and value Fabrication Suppliers Delphi Selling
accounting +
N - Noise Strategy • ATL’s compensation will be dependent on customer satisfaction scores to provide incentive for improved communication

What is
P.O. price entry P.O. price and market Accurate Payment to merchant C Linked Divisional Strategic Analysis
Platts index, quantity S - Standard Operating Procedure C! Unlinked Divisional Strategic Analysis • Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold
Per terms correct Merchants

What does
=
C - Controllable

process
amount
All-In Costs • Need to further study source of disputes to resolve disputes

the the process risk?

project look like?
scope?
Process Flow & Employee
Value Stream Map Activity Analysis
Product Families
A REA NAME: B EFORE - Car rier Asse mbly - B all B earings PRE PA RE D BY:
SUP ERV IS OR: DATE:

Where
NOTE: Depict rough scale o f equip ment layout; a nd, dra w a point to poi nt diagr am of t he com plete pr oduct flow

PC & L
4 week rolling foreca st 40 The Seven Wastes
should
Custome r/r
Weekly Orde r
6 week rolling foreca st Distributo r
Weekly Orde r 35
Supplier
Daily Ship Schedule
Demand/wee k:
OVEN 33

we Weekly Build Schedule

Part A = 500
50
Part B = 1200
120 31 D - Defective Production
Part C = 700
70
Bench
Tool O - Over Production
focus? Press
21
19
23 Box 26
14
22 8
2 4 9
24
6
Trash
10
2x/
week
2x/
day
39
13 3018 12 16 20
44 34 38
T - Transportation
42 32

Anneal Pickle Straightening Point/Chamfe r Shipping Vice

28
41
Part 15 W - Waiting
Draw
36 Box17
I
60 coils

Takt = 240 min Takt = 240 min

6 coils

Takt = 19 min
20 coils

Takt = 20 sec Takt = 20 sec

I
3000 pcs Where is 37 27
29 25 3 1
11
5
43
7 I - Inventory
C.T. = 10 sec
M - Motion
the waste
C.T. = 200 mi n C.T. = 200 mi n C.T. = 15 min C.T. = 20.4 sec
D.T. = 0.5% D.T. = 1% D.T. = 3.1% D.T. = 1%
D.T. = 4%
FTQ = 100% FTQ = 100% FTQ = 99% FTQ = 99% FTQ = 100%
C/O Ti me = 3 0 m C/O Ti me = 1 0 min C/O Ti me = 3 0 min C/O Ti me = 1 hr C/O Ti me = 1 5 min Parts Rack
Lot Size = Lot Size = Lot Size = Lot Size = Lot Size =
P - Processing
# of Shifts = 2
WIP = 3 coils
# of Shifts = 2
WIP = 4 coils
# of Shifts = 2
WIP = 18 coils
# of Shifts = 2
WIP = 1500 pcs
# of Shifts = 2
WIP = 100 pc
occurring
?
Copyright 2005, AIT Group Inc. All rights reserved. Copyright 2005, AIT Group Inc. All rights reserved.4
 Improve
Lean Six
Control Sigma
Control Strategies
Design of Experiments Type of Control
(Fix, Minimize, Standardize,
Measure & Monitor,
Communicate, Audit) Detailed Description of Control
Facility Affected (Gas,
Electric, Water)
Setting or Tolerance
Prior to Controls
Control Set Point or
Range
Management Requirements or
Organizational Changes
Date Implemented or
Projected to be
Implemented
Responsible
Individual

All computers with screen Communicated at DRL meeting, part of Jacovides, Director
Fix, Communicate, Audit Install or enable screen savers on all computers Electric Random implementation savers security audit April, 2002 Steve, Security

Design of Experiments: ANOVA: Standardize, Audit

Establish a Facilities Coordinator to be responsible for DRL
facilities needs Gas, Electric, Water No individual responsible
Personal Business Plan and
Six Month Reviews Change in job description, PBP's May, 2002 John Biafora

Price Variance = f(OTD, Sp Price, LT, Profile)

Pareto Chart of the Standardized Effects

Factor Type Levels Values
Reduce water flow through SEM by replumbing and John Biafora, Chris
(response is Var, Alpha = .10) Customer Profile fixed 2 Tier 1 Tier 2 Fix, Measure installing chiller Water 5 gal/ min, continuous 0 gal /min Authorize chiller repair June, 2002 Thrush

Special Price fixed 2 N Y John Biafora, Chris

OTD Lead Time fixed 2 Post LT Prior LT Fix, Measure Reduce water flow through vacuum chamber Water 2 gal/min, continuous 1 gal/min, as needed Authorize replumb June, 2002 Thrush

Temperature control, now

On-Time Delivery fixed 2 N Y flow only when using Authorize purchase of temperature John Biafora, Tom
Fix, Measure, Communicate Thermostat control of outgoing water on MTS unit Water 2.4 gal/min, continuous instrument sensor June, 2002 Ellis
Sp Price
2.5 gal/min, unit on only Authorize replumb, communicate need John Biafora,
Fix, Measure Reduce flow through Hall Effect system Water 4 gal/min, continuous when doing measurements to have flow only during usage June, 2002 Joseph Heremans

LT
Source DF SS MS F P
Customer Profile 1 473 473 0.04 0.845 John Biafora,
Fix, Measure Reduce flow through e-beam evaporator Water 8 gal/min, continuous 6 gal/min Authorize replumb June, 2002 Chris Thrush
Special Price 1 40905 40905 3.45 0.090

Regression
Profile
Lead Time 1 13053 13053 1.10 0.316 Fix, Measure Reduce flow through environmental test chamber Water 4 gal/min, continuous
3 gal/min, flow only during
testing Authorize replumb June, 2002
John Biafora,
Tom Ellis

0.0 0.5 1.0 1.5 2.0 2.5

On-Time Delivery 1 75488 75488 6.37 0.028 94 k ft^3/min 36% of total John Biafora, all lab

Error 11 130267 11842 Fix, Measure, Communicate Manual operation of exhaust hoods Gas, Electric 94 k ft^3/min continuous time Placard June-July, 2002 users

Random excursions in John Biafora, Fred

Tie
r1
Tie
r2
N Y Pri
or
LT
Po
st
LT
N Y Total 15 260186 Fix, Measure, Communicate Adjust pre temperature air box per season Gas, Electric temperature 65 - 72 F Authorize facilities study June-July, 2002 Scott

Turn off specific exhaust John Biafora and

170
and return air systems that Jones Lange and
do not jeopardize safety Lab Director authorize and LaSalle
Fix, Standardize, Communicate Turn off unused equipment at 7:00 PM Gas, Electric, Water None requirements communicate at group meeting May, 2002 representative
140
Special Pricing and On-Time
Var

John Biafora and

Shutdown specific exhaust Jones Lange and
110
Delivery are Significant Sources of Standardize, Monitor, Measure
Program controls of specific exhaust and return air units that
can be shutdown from 6:00 p.m. to 6:00 a.m. Mon. - Fri. Gas, Electric None
and return air units from
6:00 p.m. to 6:00 a.m. Lab Director authorize June-July, 2002
LaSalle
representative

80
Price Variation in the Co-Op System Fix, Standardize, Audit, Measure &
Monitor
Curtail all non-essential power usage during peak electrical
draw from the grid. Credit from electric supplier. Electric None
Call from Detroit Edison to
implement power curtailment
Lab Director authorize and
communicate at group meeting July-August, 2002 John Biafora
50
Profile Sp Price LT OTD

How do we
sustain the
How do we gains?
optimize
critical
inputs? Standard Work
Standard Job Sheet
Part N umber Part D escri pti on Part F amil y Date: Revisi on:

Cell or Process 2400172-1 Impell ar Casti ngs B

Design/To-Be Work Flow 15s 200s 350s 62s 401s

245s
Oper ator 1 Oper ator
Oper ator 2 3

190s 25s 33s 161s 191s

Quality Safety Standard Wor k Takt T ime Lead Ti me Number of

Chec k in Proc ess Operators
600s 3

Measure & Monitor

Liner Web Break Downtime (min) by Month
98 99
1000
What does
Individual Value

the future 500

work flow Material Replenishment 0

1 3.0SL=253.4
X=167.4
-3.0SL=81.44
Subgroup 0 10 20

look like? Month

600
10/98
99

500
Moving Range

400
300
200 3.0SL=105.6
100 R=32.33
0 -3.0SL=0.00E+0

Have we
met our
goals?

Copyright 2005, AIT Group Inc. All rights reserved.

Copyright 2005, AIT Group Inc. All rights reserved. 5
 Author Lean Six
Sigma

Steven Bonacorsi is a Senior Master Black Belt instructor and

coach. He has trained hundreds of Master Black Belts, Black Belts,
Green Belts, and Project Sponsors and Executive Leaders in Lean
Six Sigma DMAIC and Design for Lean Six Sigma process
improvement methodologies. Steven is a board member for the
Boston Chapter of the Industry of Industrial Engineers.
Full Bio: http://www.linkedin.com/in/stevenbonacorsi

Lean Six Sigma White Belt Certification:

• Add Lean Six Sigma White Belt (Basic Awareness) Training and Certification to
your Resume or Job Skills.
• Learn topics from one of the original Master Black Belts and world experts on
Value Stream Mapping, 5s, Process Capability, Deployment Planning, Roles and
Responsibilities, FMEA Risk Analysis, Control Plans and more.
• Certificates will be signed for all who complete the 2 hour training session.

Copyright 2005, AIT Group Inc. All rights reserved. 6

Learn More about The AIT Group Lean Six
http://www.theaitgroup.com Sigma

Copyright 2005, AIT Group Inc. All rights reserved. 7

 Lean Six
Who is AIT? Sigma
• AIT is a premier provider of Lean, Six Sigma and The AIT Group is an international
Supply Chain solutions. consulting firm that has been
specifically designed to help
• Solutions are customized to the customer – not
companies increase profitability by
one size fits all.
improving overall business
• The company was started in 1998 by three performance and customer
individual that recognized extremely early in the satisfaction through the integrated
industry how well Lean, Six Sigma and Supply application of:
Chain disciplines integrate.
• Our goal is the complete transfer of knowledge
via client specific solutions – not training.
Lean Supply
• Your instructors from AIT are Certified Master
Chain
Black Belts and Lean Experts.
Mgmt.
• We have worked with many different clients and Value
some of the largest companies in the world.
$
• We have Offices in the US, Europe, Mexico and
China.
Six Sigma

www.theAITgroup.com

The
TheAIT
AITGroup
Groupexcels
excelsin
inimplementation
implementation…
… not
notrecommendation!
recommendation!
Copyright 2005, AIT Group Inc. All rights reserved. 8