Intro

Introduction to the Tools of Lean and Six Sigma (LSS)

Yellow Belt Training
Building new skills to improve quality and management practices across HBD

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Yellow Belt Training

What You Should Learn Today

How We Will Teach What is Lean Six Sigma?

Intro

Key Aspects of Lean and Six Sigma Improvement Methodologies Overview of HBDs Lean Six Sigma Implementation Prior Projects Areas of Focus DMAIC Methodology Overview Tools to be Learned as a Yellow Belt
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How We Will Teach

Focus for Approx. 60 Minutes in Class Deliver Pre-Class Reading Materials (Pre-Work) Introduce Key Concepts for Recognition and Everyday Usage Provide Real-life Examples and Opportunities for Discussion Encourage Participation by All Quiz Students to Encourage Learning and Memory Recall

Intro

Ask for Immediate Feedback and Benefits & Concerns (Bs & Cs)
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Why Teach Me This Stuff?

Culture is common thinking. Thinking drives behavior. Behavior drives results. Results create opportunities and security.

Intro

The Lean Six Sigma curriculum combines the discipline and analytical tools of Six Sigma with the time-based focus of Lean. Our goal is to build and enhance skills among employees that can improve quality and strengthen management practices across HBD.

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Why Teach Me This Stuff? (cont)

Intro

The tools and methodologies in Lean Six Sigma are useful not only in LSS projects, but in everyday tasks. These include:
Understanding Customer and Stakeholder Needs Identifying, Analyzing and Presenting Key Business Information Brainstorming on, Deciding upon, and Solving Complex Issues Revising and Simplifying Production-Related Processes Streamlining Administrative Processes and Support Tasks Understanding Variation Managing Cross-Functional Projects

The more you understand what these tools are and the underlying philosophy behind them, the better you will be as an active team member in future projects.

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Yellow Belt Training

What is Lean Six Sigma? For HBD, Lean + Six Sigma = Profit Power!

Intro

Per-Unit Profit = Per-Unit Price Per-Unit Cost; Net Profit = Sales Product Costs Overhead Expenses

Lean Six Sigma offers you the power to transform operations into flexible, efficient plants needed to profitably survive and thrive in a competitive business landscape.
Capability Analysis: Roll Order Entry Time Efficiency - After Close-out
Process Data USL Target LSL Mean Sample N StDev (Within) StDev (Overall) 11 1 1.11 11 .111 11 .111 11 .111 11 1 1.11 1 11 1.11 1 11

Target LSL

USL
Within Overall

Potential (Within) Capability Cp CPU CPL Cpk Cpm Overall Capability Pp PPU PPL Ppk 11 .1 11 .1 11 .1 11 .1 11 .1 11 .1 11 .1 11 .1 11 .1

-11

-11

1 1

1 1

1 1

11 1

11 1

Observed Performance PPM < LSL 111.1 111 1 PPM > USL PPM Total 1 . 11 111.1 111 1

Exp. "Within" Performance PPM < LSL 111.1 111 1 PPM > USL PPM Total 1111 .11 111.1 111 1

Exp. "Overall" Performance PPM < LSL 111.1 111 1 PPM > USL PPM Total 11111 . 11 111.1 111 1

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The Money Map

The Money Map -- Where Do YOU Play a Role in this System?
Prices Paid By Customers Costs To Manufacture Products & Manage The Business = Profit Available To Reinvest In Jobs And Plants

Intro

Profit (or Loss) = (Unit Prices x Volume Sold) Costs Incurred

From "What Customers Want" Quality Products and Effective Solutions Competitive Prices and Low Cost of Interaction On-Time Deliveries and Reliable Promise Dates Accurate Pre-Sale Information and Post-Sale Services Supplier Chosen And Prices Paid To "How HBD Makes Products for Sale to Customers" Sales and Marketing Effort Product Designs and Technical Specifications Raw Materials and Inputs from Suppliers Production Labor and Conversion Energy General Management and Administration Post-Sale Billing, Collection, and Customer Support Products Manufactured And Business Costs Paid Equals "How HBD Makes Profits to Prosper in its Businesses"
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Productivity Efficiency Quality Speed Flexibility

Key Aspects of Lean

Lean is Not New
Popularized by Toyota more than 30 years ago. Many of its tools and concepts have been around for decades.

Intro

Lean is Both Methodology and Philosophy

Lean aims to eliminate waste (in Japanese, muda) in every area of a business, including production, customer relations, product design, supplier networks, and factory and business administration. Its goal is to incorporate less effort, less inventory, less time to develop products, and less space in order to become highly responsive to actual customer demand and to produce top-quality product in the most timely, efficient and economical manner possible.

Lean Focuses on Customer-Defined Value

A process step adds value if the activity adds form, fit or function to the product that is desired by the customer, and the customer is willing to pay you to conduct that activity.

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Key Aspects of Lean, cont

Toyota Defines Seven Key Types of Muda (Waste)

Intro

Overproduction: Producing more than demanded or before it is needed, e.g., stored materials or inventories. Inventory or Work-in-Process (WIP): Material between operations due to large lot sizes or long process cycle times. Transportation: Material movements, by definition, add no value to products, as they do not affect form, fit or function. Processing Waste: Unnecessary or inefficient process steps simply add cost and time. Motion: Effort to move workers and machinery or to transport materials adds cost and delay. Waiting: Long changeover times, slow processing times, and materials handling tasks limit opportunities to make on-time deliveries. Defective Products: Items that fail to meet customer specifications are pure waste, e.g., returns, rework, scrap, and warranty costs.

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Yellow Belt Training

Key Aspects of Six Sigma

Six Sigma is Not New

Intro

In existence for more than 20 years; at HBD since 2002. Many of its tools and concepts have been around for decades. Six Sigma packages the tools and concepts into a clear and systematic roadmap for process improvement.

Six Sigma is a Methodology

The DMAIC problem-solving methodology is a disciplined thought process and tool guide used to solve business issues. Define / Measure / Analyze / Improve / Control / (and Verify).

Variation is Bad (Evil)

For most processes, a repeatable and predictable result is crucial. Six Sigma is designed to identify the key sources of variation and drive them out of the process, by understanding the key inputs, processes and outputs of business activities. Fix the process to get good results.

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Key Aspects of Six Sigma, cont

Six Sigma has a Customer Focus
Processes and problems must be viewed from the customers perspective. Internal customers (i.e., downstream departments) can be just as important as external customers (i.e., those who pay the bills).

Intro

Six Sigma is Not Just for Manufacturing or Large Businesses

Success can be found in all types of companies and all kinds of processes including at HBD.

ANDSix Sigma and Lean are Not Mutually Exclusive

Without a basic understanding of both methodologies, you risk trying to use a screwdriver to drive a nail. Ask, What tool or technique is most useful to help solve my problem?

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Overview of HBDs LSS Implementation

LSS supports HBDs long-standing corporate strategies
Customer Satisfaction Marketing Excellence Working Capital Management Cost Reduction and Containment

Intro

LSS was introduced into HBD in 2002, first with the Executive Office and General Managers and then locally at the plants
88 individuals in all 17 business locations trained in LSS (at 7/30/07)

Projects have successfully touched both production and backoffice (paperwork) processes
112 LSS projects initiated (as of 7/31/07) plus 29 documented kaizens Over $6.65MM in hard-dollar and soft-dollar savings, cost avoidance, new-revenue opportunities, and working capital improvements

LSS represents one key tool for on-going improvement efforts

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LSS Projects Areas of Focus

Cost Reduction
Product and Unit Costs, Overhead and Period Expenses, Scrap and Rework

Intro

Cost Avoidance
Regulatory Expenses, Capital Equipment Needs

Capacity Increase
Production Availability, Quick Changeovers, Equipment Utilization

Customer Satisfaction
On-time Delivery, Quotation and Production Lead-time, Quality, Cost (Pricing)

Health & Safety

Ergonomics

Flow
Process Speed, Travel Distance, On-time Delivery, Lead-time

Working Capital Reduction

Finished Goods, Work-in-Process and Raw Materials Inventories

New Revenue
Revised or New Products

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Whos Who in HBDs LSS Project Teams

Corporate Champion (Nelson Law Dublin, OH) Team Facilitator (Black Belt or Green Belt)

Intro

Helps identify possible projects; Selects / approves projects for launch Formally-trained team leader who guides teams analyses and activities

Project Sponsor
Process owner with responsibility / authority over process under study Accountable for long-term sustainability of projects gains and results

Core Team Members (managers, supervisors, operators)

Cross-functional subject matter experts who live with the process; Mandated to meet regularly to make project progress

Ad Hoc Team Members (managers, supervisors, operators)

Additional subject matter experts who may be called upon occasionally for help

Supporting Supervisors, Managers & Coworkers of Team Members

Not direct part of project team activities; Must plan for / support ways to allow core team members to meet regularly

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Dynamics of Process Improvement: The Funnel Effect

Project Charter Define Phase Measure Phase Analyze Phase Improve Phase Control Phase 30 - 50 Inputs 10 - 15 KPIVs 8 - 10 KPIVs 3-6 Critical KPIVs

Intro

Ideas; Guesswork Data; Information Root Causes Experiments; Changes Documentation; Controls
KPIV = Key Process Input Variable

Optimized Process
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KPOV = Key Process Output Variable

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DMAIC Methodology Overview: The Five Phases of Every LSS Project

DEFINE MEASURE

Intro

Define opportunity, project scope, potential benefits and resource needs Determine process map and metrics; Get baseline performance levels; Define customer requirements for success; Display collected data

ANALYZE
Explore root causes of process variation, poor process flow and current underperformance

IMPROVE
Brainstorm and prioritize potential solutions; Pilot-test selected changes; Select and implement preferred solutions

CONTROL
Complete transition back to process owner; Confirm that new process is stable; Document control plans; Identify and transfer best practices

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Yellow Belt Curriculum Objectives

Intro

Through the Yellow Belt curriculum, every employee should:

Understand that Lean and Six Sigma are all about ensuring quality in terms of the Voice of the Customer Understand how data analysis drives business decisions Understand how root cause analysis drives solution implementation Understand the basics of metrics to describe overall business health Understand the use and presentation of data to develop insights and achieve goals Understand the importance of identifying and controlling process variation and thus costs Understand the application of control mechanisms to sustain changes

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Tools to be Learned

Cross-Functional Teams Characteristics of Effective Team Meetings Project Charters and Meeting Agendas

Intro

Team Problem Solving and Team Effectiveness (Working in Teams)

Voice of the Customer (Knowing What is Important)

Sources of the Voice of the Customer Critical-to-Quality Factors and Critical Customer Requirements

Idea Generation and Grouping (Working with Ideas)

Brainstorming; Force Field Analysis Cause-and-Effect Diagram / 6Ms; Root Cause Analysis / 5 Whys Affinity Diagram; Nominal Group Technique; Multi-voting

Data Collection, Analysis and Presentation (Working with Numbers)

Process and Business Metrics Data Collection Plan Check Sheet, Process Study Log and Other Data Collection Forms Data Stratification and Segmentation Histogram, Run Chart, Control Chart and Other Graphical Presentations of Data
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Tools to be Learned, cont

Decision-making Tools (Working with Facts)
Pareto Analysis; Pareto Chart Understanding and Explaining Process Variation Cause-and-Effect Matrix and Other Prioritization & Selection Tools

Intro

Speed and Flow Implementation (Ensuring Value)

Process Mapping and Flowcharts Value-Add vs. Non-Value-Added 5S / Workplace Organization Spaghetti Diagram (Workflow) and Work Cell Layout Quick Changeover: Setup and Changeover Reduction Pull-based Flow and Replenishment Standardized Work and Best Practices Visual Workplace: Visual Aids and Learning Tools Poka-Yoke (Mistake-Proofing) Devices Preventative Maintenance (Total Productive Maintenance) Design Simplification and Parts Rationalization
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Defect Prevention and Mistake-Proofing (Quality at the Source)

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Continuous Improvement through Lean Six Sigma (summary)

Observe processes Identify problems and gather data Determine root causes of the problems Identify countermeasures / solutions, and Regularly participate in activities to simplify processes and eliminate waste, unevenness, and unreasonableness.

Intro

AndPractice non-blaming and non-judgmental behaviors, as these are required for realizing genuine continuous improvement.
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Takeaways

Intro

Every person has a hand in generating profit and, in turn, job security. Lean Six Sigma is not solely about statistics or SPC (statistical process control) but is a very successful method to enable continuous improvement. Lean Six Sigma provides a powerful set of problem-solving tools and team effectiveness techniques to address complex issues. These proven tools and techniques can be used anywhere and we do mean, anywhere! Lean Six Sigma emphasizes team-based creativity, analytical thinking, and data-driven decision-making.
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