Michelin GB draft rev3-2.pptx

Michelin Lean Six Sigma Green Belt Training 1 Introduction to Lean Six Sigma 2 What Are Your Challenges Today? 3 Why Even Think About It? “A competitive world has two possibilities. You can lose. Or, if you want to win, You can change.” Lester C. Thurow 4 Current Challenges • • • • • •...

Michelin Lean Six Sigma Green Belt Training 1 Introduction to Lean Six Sigma 2 What Are Your Challenges Today? 3 Why Even Think About It? “A competitive world has two possibilities. You can lose. Or, if you want to win, You can change.” Lester C. Thurow 4 Current Challenges • • • • • • Pressure Increasing – High Competition Higher Orders/Service Requirements High Costs & Profit Margin Pressures Poor Quality Fast & Flexible Delivery High Mix Low Volume Business Environment 5 What is Lean Six Sigma? • Lean Six Sigma is a methodical and scientific continuous improvement and business optimization strategy. • It is a combination of two main concepts: 1. 2. • Lean Six Sigma Lean Six Sigma gives businesses the benefits that eventually lead to increased profitability and cash flow. 6 Have you heard these terms before? 7 What is Six Sigma? • • Traditional Six Sigma focuses on reducing variation and increasing process capability in order to reduce defects. A process that reaches the Six Sigma level will have less than 3.4 defects for every million parts produced. -6σ -5σ -4σ -3σ -2σ -1σ +1σ +2σ +3σ +4σ +5σ +6σ 8 Six Sigma’s Objective 1. Center the process to match the target. 2. Reduce the variation in the process to the point that 6 standard deviations of your process are in between the upper and lower specification limits. LSL LSL Note: Drawing not to scale. USL USL Target Target -6σ -5σ -4σ -3σ -2σ -1σ +1σ +2σ +3σ +4σ +5σ +6σ 9 Modern Six Sigma • Six Sigma has evolved from a collection of tools to become a methodology for improvement. • The methodology is made up of 5 phases: o o o o o Define Measure Analyze Improve Control • A scientific and data-driven approach to find the optimal solution to a business problem. 10 History of Six Sigma • The concept of Six Sigma was first started by Motorola in the early 1980’s to ensure the highest level of quality. • GE implemented Six Sigma in 1994 under the leadership of Jack Welch. o In 1999, GE reported over $2 billion of savings over 5 years from their Six Sigma projects. 11 What Is Lean ? • Lean is a simple strategy that focuses on the elimination of waste, variation, and work imbalance. • Each step must create value for the Customer! It is a way of life. 12 Lean is Fundamentally Different • Insight #1 o See from Customer perspective. • Insight #2 o See from part / product or service perspective • Insight #3 o See from an end to end perspective. 13 Lean looks at Value VALUE-ADDING ACTIVITY Changes the information or product Done right the first time Customer is willing to pay for it (Customer cares) NON-VALUE-ADDING ACTIVITY Process/Operation that take time, resources or space, but do not add value to the product or service 14 The Roots of Lean • History o o o o o Toyoda Weaving: 1902 Ford: Highland Park: 1913 Toyota: post WW2 Deming Influence: 1950’s Ohno: American Supermarkets: 1950’s • Lean Thinking o James Womack and Daniel Jones are from Lean Enterprise Institute, who coined “Lean” term, wrote Lean Thinking 15 Taiichi Ohno, founder of TPS, said “All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added wastes.” (Ohno, 1988) 16 Key Characteristics • Traditional Six Sigma focuses on: o Quality. o Capability. • Lean’s focus is on: o Capacity / Efficiency. o Lead Time / Cycle Time. 17 History of Lean Six Sigma • Initially Lean Six Sigma started as a manufacturing initiative, but today, companies from all sectors have used Lean Six Sigma successfully. Motorola Bank of America 3M Texas Instruments Starwood Hotels Eastman Kodak Toyota FedEx Tyco 18 Origins of Lean • The Springfield Armory, circa 1862 • Ford Motor Co., The Rouge, circa 1920 • Shewhart Cycle, Dr. Walter A. Shewhart (1891–1967) • Kaiser Liberty Ships, WWII • Deming, Juran, Drucker, et al., post­ WWII • The American Supermarket • The Indy 500 • The Toyota Production System • New United Motor Manufacturing, Inc. (NUMMI) • The Machine That Changed the World and Lean Thinking, Womack & Jones 19 Lean Cost Model PRICE  COST = PROFIT Traditional Model Cost + Profit = Sales Price • Price set by adding profit margin on top of cost • Few choices for customer • Customer may not perceive value Lean Model Price – Cost = Profit • Ongoing cost reduction activities • More choices for customers • Increase profits • Possibly lower sales price 20 Lean Method Model Traditional Model In order to increase output: Lean Model In order to increase output: • Increase the workforce • Increase working hours • Eliminate all forms of waste as a default strategy • Focus on efficient use of machines, equipment, and personnel • Minimize problems with standardized work 21 Benefits of Lean •• Reduce lead/cycle time Improve quality •• Provide the right product/service in the right Reduce errors/defects at the • amount Reduce costs right time • Eliminate waste • Provide the highest value to the customer at the • Improve flow lowest possible cost •• Simplify complex Increase profitability processes • Improve safety 22 Examples of Benefits Implementation Example Benefit A loan processing group was reorganized into work cells, so that people sat near the people who did the step before them and the step after them Improved communications and reduced errors; able to process loans one at a time as they came in, significantly reducing overall cycle time A distribution warehouse reduced batch size and replenished inventory based on actual usage Dramatically reduced inventory and obsolete part costs Nurses in the ED attend to prescreened, noncritical patients to reduce the load on doctors Leveled the workload across resources increasing capacity of ED to care for more patients at a faster rate 23 Examples of Benefits, cont. Implementation Example Benefit Level volume of loan applications by processing simple and complex applications in accordance with demand mix Significantly reduced cycle time to process applications and increased customer satisfaction Manufacturing division determined required staffing levels and hourly production targets based on monthly order forecast, spreading the work evenly throughout the month Coordinated activities to better match demand, smoothed out workflow, reduced overtime costs Order entry process error-proofed forms and redesigned website to refuse to accept an order with incompatible information Dramatically reduced errors in order entry process and reduced number of returns downstream 24 Types of Work Much of the work done in organizations adds no value to the products or services provided to customers  Shouldn’t be done  Not necessary to advance the process  Adds cost  Customers don’t want to pay for it ValueAdded Work Non Value Added Other Necessary Work  Customers are willing to pay for it  It physically alters the product or service  It’s done right the first time  Needs to be done  Necessary to advance the process  Customers don’t want to pay for it  Customers would say “so what?” 25 Major Categories of Waste Defects Overproduction Waiting Motion Waste Inventory Processing (NVA) Transportation 26 Discussion: Your Work Think about your own work • How much of your daily efforts are value-added activities? • How much of your daily efforts would you consider other necessary work or waste? • What would it mean to you to reduce or eliminate the wasted activities? 27 Discussion: Examples Bracket Manufacturing Line • Value-added: Cutting a part, bending a part, assembling components, polishing, etc. • Other necessary work: Delivering components to final assembly by hand, entering data into computer system for regulatory reports, etc. • Waste: Inspection, reworking parts, excess inventory, cluttered worksite, high number of hand injuries, etc. Financial Services Call Center • Value-added: Assisting customers in finding right financial product, processing loan application, distributing funds, etc. • Other necessary work: Collecting payments, tracking customer data for management reports, determining customer’s credit score, etc. • Waste: Collecting customer data more than once, difficulty using leasing tables, passing on incorrect customer information from loan application to loan processing, etc. 28 Lean Objective Goal • Produce and deliver the highest quality products and services (in the right amounts, at the right time) at the lowest possible cost This requires: • Building quality into all steps of the process with an objective of 100% defect-free production • Providing products and services at competitive prices by eliminating all waste (inefficiencies or ineffective work) in the system • Supporting the team members through effective management deployment and support • Instituting a never-ending cycle of improvement • Making value flow faster A rigorous methodology for identifying and eliminating waste and its drivers in our processes, and increasing value to our customers. 29 Overburden and Unevenness: Drivers of Waste Two key drivers of waste in organizations • Work that is difficult to do (overburden) • Running or operating at an uneven pace (unevenness) 30 Drivers of Waste: Overburden The overextension of the capacities of people, equipment, and machines • A process step runs at a pace harder than can be maintained and still achieve safe, consistent results • One piece of equipment works beyond its design capacity—higher volumes, faster rate, etc. • One expert is always overbooked beyond his/her capacity 31 Drivers of Waste: Unevenness Occurs when either production, work, schedule, or volume of work varies • End of period sales or limited time specials • Batching of shipments (all bills going out at the end of the month) • Poor planning or lack of planning • Fluctuations in schedule; hurry up and wait • Material/resource shortages or overstocking 32 The Relationship Between Unevenness, Overburden, and Waste Each component can affect the others Waste Unevenness Overburden 33 Example: Relationship Between Unevenness, Overburden, and Waste 3. Creates errors, rework, downtime, delays Waste Unevenness Overburden 2. Causes employees and computer system to be overburdened with work 1. Sending out bills once at the end of the month 34 Summary • The goal of Lean is to build and deliver the highest quality products and services (in the right amounts, at the right time) at the lowest possible cost • In other words, “Doing more and more with less and less—while coming closer and closer to providing customers with exactly what they want” • Following the Lean Pathway helps you decide what to do when • Selecting Lean approaches within the pathway helps you determine specific solutions to implement 35 LEAN BASICS: STANDARDS, BIB STANDARD, VISUAL MANAGEMENT 36 LEAN PHILOSOPHY: SECURE THE BASICS Identify customer value Improve continuously BASICS OF LEAN Analyze value stream Standard Bib Standard Visual Management / MQP Pull the flow Master the flow 37 DEFINITION OF A STANDARD It is the best way to do (QCDSE), known and shared by everyone, at a given time Continuous improvement wheel Quality Standard (Landmark, (Landmark, reference) reference) Best quality Time 38 PRODUCTION STANDARDS Product view 1. Process Graph Process view 2. Operation view Standardized work Production Production standards standards The box shall be fully filled in. The box shall be fully filled in. This document shall be dated This document shall be dated and signed by the management and signed by the management - Draw the Lay out. Locate the - Draw the Lay out. Locate the WIP(with qantities). Locate the WIP(with qantities). Locate the operations. draw the movements operations. draw the movements (dotted line for motion without (dotted line for motion without component) component) - Write the workstation - Write the workstation parameters (TT, CT, Vol, WIP) parameters (TT, CT, Vol, WIP) EHS Ind ustr ial excellen ce Management & Leadershi p I nd ustr ial excellen ce (Operations Standardisation table and standard operations diagram) Q uali ty Author N.Martin Author Zone N.Martin / Line Montage Zone / Line Montage Management & Leadershi p 1 Da te (OperationsTime N+2operations diagram) Director Standardisation N+1 table and standard 28/10/2008 Date 15:30 Time N+1 N+2 Director Product 28/10/2008 Reference 15:30 / / / / / / BG196W Product 986742148 Reference / / / / / / BG196W 986742148 B asic P rincipl es Ta kt Time Ta kt Time 45 45 Cycle time Cycle time 40 40 Volume per pe Volume riod per pe riod 630 630 WIP WIP 4 4 N° - Choose a scale, - Choose a scale, - locate the Takt Time and - locate the Takt Time and the Cycle Time. the Cycle Time. - List the sequence of - List the sequence of operations with their timing/ operations with their timing/ Man, Auto, Dep (motion) Man, Auto, Dep (motion) - Draw the diagram - Draw the diagram STANDARDIZED WORK STANDARDIZED WORK Q uali ty B asic P rincipl es EHS Station 5 Station 5 (Inspection) (Inspection) 7 6 5 7 6 5 N° Pick tube 1 Pick tube Time Ma n Auto Dep 5 Time Ma n Auto Dep 2 2 2 2 3 Position tube on the support 2 Position tube on the support Weld 3 Weld 5 4 Functional inspection 4 Functional inspection 3 5 Welding inspec tion 5 Welding inspec tion 2 6 Surface inspection 6 Surface inspection 3 7 Pick inspected part 7 Pick inspected part 2 Place part on cart 8 Place part on cart 4 8 9 4 3 2 4 3 2 1 1 Write in the symbol the control Writefrequency in the symbol the Ex :control f requency 1/1 Ex : every : part 9 Opérations Opérations Control Control 1/1 8 1 8 1 3 11 1/1 1/1 9 Wa iting parts Wa iting parts Machine 4 (Welding) Machine 4 (Welding) 1/1 FP cart FP cart 2 10 3. Work Instructions 9Pick the cap Pick the cap 10Assemble the c ap on the tube Assemble the c ap on the tube 10 15 5 10 Safety Safety 1/5 1/1 : one everypart 5 parts : every 1/5 : one every 5 parts Operating times 20 25 30 35 Operating 40 45 50 60 times 15 20 25 30 35 4 0 45 50 60 3 15 5 3 15 3 3 2 3 2 2 2 4 1 1 5 5 3 3 11 12 12 13 13 Takt time Takt time Cycle time Cycle time 14 14 15 15 16 16 Defines the components And the operations with the method time Explains the succession of operating steps, with the times, the moves, the Work-in-Progress (WIP) and the production pace Explain how each operation is undertaken, with key crucial steps 39 STANDARD: SOME HEALTHY RULES Structure Acceptance Simple (limited information) Built by users Maximized (Visual) Dated (up to date) Standard Approved by Managers Checked by team leader/function leaders 40 5S / BIB STANDARD, FOR CREATING AND MAINTAINING A CLEAN, ORGANIZED AND HIGH-PERFORMANCE WORKPLACE Key elements of 5S / Bib Standard 1-S = “Seiri” Eliminating unnecessary material (Sort) 2-S = “Seiton” A place for everything and everything in its place (Set in Order) 3-S = “Seiso” Obtain a permanent cleanliness (Shine) 4-S = “Seketsu” Define standards to maintain step 1, 2 and 3 (Standardize) 5-S = “Shitsuke” Making continued compliance automatic (Sustain) Key benefits Safety Plant & company Image Efficiency Improvement mindset basis 41 5S / BIB STANDARD: DON’T STOP AFTER PROGRESS ACTIONS! Standardize / Lock Sustain « Defining standards allows you to identify deviations and correct them with visual management» Use internal audits to seek continuous improvement, because : « What gets measured gets managed » 42 THE 2 COMPONENTS OF VISUAL MANAGEMENT Visual Management is a set of technics used on the workspace to detect abnormalities and immediately engage corrective actions Management Visual Organization Organization Birdhouse Birdhouse // flat flat board board Make Make aa daily daily meeting meeting with with the the team team about defined subjects (SMQDCP) about defined subjects (SMQDCP) Stimulate Stimulate problems problems escalation escalation with with WIN Cards / RR on problems (or WIN Cards / RR on problems (or suggestions). suggestions). Develop Develop teamwork teamwork Visual Management 5-minute meeting / TOP 3 (WIN Cards) 43 WHY SHOULD YOU USE VISUAL MANAGEMENT? A human collects information through: 83% By sight 11% hearing 3.5% Sense of smell 1.5% 1% Sense of touch taste 44 WHY SHOULD YOU USE VISUAL MANAGEMENT? Visual Management helps you to: Identify and mark: Drive: Dangers Parameters Points of Reference Trend Standards Strategic data Show and control the process (Operational mode) Cible atteinte étape 3 etc. MAX Audit MIN Début étape 2 Déterminer continuation étape 1 Développer le planning Contrôle de performance Audit Arrêter le travail Déterminer Les indic. clefs Début du plannning Activités 45 Perspective 46 LEAN INDUCES A CHANGE IN MINDSET Improvement according to the occidental model, or imposed change Improvement according to the Japanese model, or continuous improvement Implementing Lean, is setting up a new way of working and team animation, in which the whole hierarchy is involved. The individual is the basis of this new organization: he is given responsibilities and is valued. 47 10 Steps for a Continuous Improvement Culture 48 THE DMAIC METHOD FOR CONDUCTING PROJECTS AND STUDIES D efine • Define and delimit the subject • Identify the project stakes Tools: • Voice of the Customer • SIPOC • Project charter Etc. Page 49 M esure • Observe • Measure • Identify the problems Tools: Value chain analysis Root out waste…. A nalyse • Identify the root causes • Rank the causes by order of priority Tools: • Problem solving • Root cause analysis... • Kaizen event I mprove • Identify solutions to the root causes • Test the solutions • Carry out the action plan Tools: • Kanban • Pull system • 5S • Versatility C ontrol • Inspect • Standardize • Formalize the next steps Tools: Visual management • Poka-yoke (mistake proofing) • Kaizen... • Management rituals 49 Belts in Michelin As a Michelin Green Belt, you will focus more on using Lean tools in your projects. Black Belts will use more statistical tools and tackle more complex problems. Training, coaching and certification of the people who will drive progress in your entity Who can benefit? Ø Ø Anyone belonging to the progress community Open to anyone leading or managing progress in the entities Who can benefit? Ø Ø Progress Adviser Open to anyone leading or managing progress in the entities What does it involve? Ø Ø Ø Ø 5 days of training in the Lean mindset, approach and tools A 6-week full-time project or study in the entity with a certified coach Participants write a dissertation and present it to a jury Recognized international certification What does it involve? Ø Ø Ø Ø 10 days of training in the Lean mindset, approach and tools A 9-month full-time project or study in the entity with a certified coach Participants write a dissertation and present it to a jury Recognized international certification Objectives: Reinforce: Ø Your performance by acquiring the Lean mindset and skills (gains worth €50-100K) Ø Your autonomy in progress by having people who are trained and certified in Lean Achieve: Ø Customer focuses, simplification and empowerment Reinforce: Ø Your performance by acquiring the Lean mindset and skills (gains worth over €500K) Ø Optimize complex processes through a study or project Achieve: Ø Customer focuses, simplification and empowerment 50 Basic Tools Typical Six Sigma Tools • • • • • • • • • • Capability Studies Gage Repeatability and Reproducibility Studies Statistical Process Control Pareto Analysis Histograms Design of Experiments C&E Matrix Control Plans Statistical Tolerance Analysis Hypothesis Testing Used mostly in Black Belt projects Typical Lean Tools • • • • • • • • • • • Pull System Kanban Error Proofing (Poka Yoke) Value Stream Mapping Takt Time Analysis Quick Changeover One piece flow Standard Operations Spaghetti Diagrams Rolled Throughput Yield Value-Added Analysis Used mostly in Green Belt projects 51 Project Selection 52 Selecting The Right Projects Discussion Topics • What criteria would you use when selecting Lean Six Sigma projects? • Identify some potential Lean Six Sigma projects. o Do these projects meet the criteria you have just defined? o What key Business issues / objectives are addressed by this Six Sigma Operational Excellence project? o Is there an identified “process owner”? o What authority is needed to implement changes to this process? o How will you measure success? 53 Selecting The Right Projects • Well-selected and defined improvement projects will translate into better, faster results • The “Right Projects”: o Are linked to a key business issue or objective o Are prioritized based on the value to the Business and the resources and time required o Have clearly defined deliverables o Have an identified “process owner” o Have defined boundaries o Have “SMART” objectives 54 Selecting The Right Projects pecific easureable chievable but aggressive elevant to the business strategy ime bound 55 Selecting The Right Projects Well selected + Well defined = Better, faster results 56 Measuring Projects • Reduction in defects (PPM) • Improvements in fixed or variable costs • Reduction in the Cost of Poor Quality • Improved capacity • Improved cycle time • Higher service level • Reduction in transaction lead time 57 Focus the Project Scope Possible Indicators Business Objective Improve Delivery To Request For Product XYZ Process Yield Cost of Poor Quality Cycle Time 58 Focus the Project Scope Possible Indicators Business Objective Improve Delivery To Request For Product XYZ Process Yield Cost of Poor Quality Cycle Time 59 Focus the Project Scope A B C Yield 85% 92% 98% Scrap .10 .30 .05 Capacity 1000 1200 500 60 Focus the Project Scope Baseline the current performance of the process steps A B C Yield 85% 92% 98% RTY = 76.7% Scrap .10 .30 .05 .45 per unit Capacity units/day 1000 1200 500 500 61 Focus the Project Scope 100 90 80 300 F r e q u e n c y 70 60 200 50 Cumulative Percent 40 30 100 20 10 0 1 2 3 DEFECTS 4 Other 0 6 62 Project Do’s And Don’ts •• Don’ts Do’s o Choose o Base the too many projects projects o improvement Create “world hunger” projects solid criteria o on Fail to explain the rationale for project o Balance efficiency selection and cost reduction projects with benefits to the customer o Prepare for an effective project hand off in the control phase 63 The DMAIC methodology Getting Started 64 Problem Solving Decision Making Process Type of Problem Gut feel, intuition Simple Follow obvious data Graph and chart data, Trends Analytical Tools to zoom in on root causes Advanced Statistical Tools to Evaluate Data Complex 65 Lean Six Sigma Methodology • Lean Six Sigma removes the “I think” or “I feel” terms from the solution. It provides a mathamatical relationship to give you a data driven solution. • In order to arrive at this solution the DMAIC methodology is used: D Define M A I C Measure Analyze Improve Control 66 DMAIC Funneling Define 20+ Inputs All Inputs (Xs) Measure 10 – 12 Inputs 8 – 10 Inputs Analyze 1st Hit List Improve Screened Inputs 6 – 8 Inputs Critical Inputs 3 – 6 Inputs Control Inputs Control 67 DMAIC Methodology 68 DMAIC Methodology 69 What To Do First ... •Define •Measure •Analyze •Improve •Control 70 Purpose Define • Define project purpose and scope • Obtain background information about the process and its customers • Attain the the Voice of the Customer • Select project objectives • • • • • • • • • Tools Voices SIPOC OEE / TRS RTY CTQ Tree Data collection Cycle Time Takt Time Project Charter 71 Voice of the Customer Our Performance Customers’ Need 72 DEFINE Voice of the Customer 73 Process Check Develop Develop Business Business Case Case and and Project Project Charter Charter Create Create High High Level Level Process Process Map Map Gain Gain the the Voice Voice of of the the Customer Customer 74 Supplier Perception vs. Customer Reality Supplier Customer Perception Reality Airport rental car company’s perspective: What a customer wants in a car: • Visible car - White Business Traveler’s perspective: What a customer wants in a car: • Cars that don’t break down • Pay for tank of gas • Option to drop cars • Full size sedans • Fast terminal pickup • Transportation from terminal • More SUV’s 75 Goals o Understand criticality in gaining the Voice of the Customer (VOC) o Create a plan for gathering the VOC o Be able to use a tree diagram (CTQ Tree) to identify customer requirements and set specifications o Use the Kano Analysis to understand gaps o Identify Project Y(s) 76 Converting customer needs into product requirements Customers aren’t clear about what they want or provide conflicting requirements. We need to utilize methods which help us to understand customer needs and translate them into internal requirements After we have translated customer needs to internal requirements we must be able to measure and determine product and process capability 77 What is the Voice of the Customer? • The term Voice of the Customer (VOC) is used to describe customers’ needs and their perceptions of your product or service. 78 Why VOC Is Critical • VOC data helps an organization o Decide what products and services to offer o Identify critical features and specification for those products and services o Decide where to focus improvement efforts o Get a baseline measure of customer satisfaction to measure improvement against o Identify key drivers of customer satisfaction 79 VOC Plan Features List the main customers who use your product and service and make notes about potential segments that might be relevant to your project. Make sure you include all relevant internal and external customers (for example intermediate customers such as logistics provider, warehousing etc.) Project Worksheet #6: VOC Plan PROJECT: ___________ Who What & Why Think about what you need to know from these customers Sources REACTIVE SOURCES PROACTIVE SOURCES Summary Look for diverse sources of information about customer needs. Summarize specifically which customers you will contact, when, and how. 80 The VOC Plan Step 1: Specify the Customer’s (Hint: Use your SIPOC) Step 2: Indicate specifically what you want to know from your customers about your product/process. 81 Sample Questions • For all customers, you should ask questions such as: 1. What is important to you about our product/service? (Ask them to rank each of these needs in order of importance.) 2. What do you think of as a defect? 3. How are we performing on the areas you consider important? 4. What do you like about our product/service? 5. What can we improve about our product/service? What can we do to make your job easier? 6. What specific recommendations would you make to us? 82 Basic VOC Systems Step 3: Determine what sources you will use to generate VOC data. Use Reactive systems first. 1. Reactive systems Information comes to you whether you take action or not 2. Proactive systems You need to put effort into gathering the information 83 Typical Reactive Systems o Customer complaints (phone or written) o Problem or service hot lines o Technical support calls o Customer service calls o Claims, credits, contested payments o Sales reporting o Product return information o Warranty claims o Web page activity • Reactive systems generally gather data on: o current and former customer issues or problems o current and former customers’ unmet needs o current and former customers’ interest in particular products or services 84 Proactive VOC Systems o o o o o o o o o Interviews Focus groups Surveys Comment cards Data gathering during sales visits or calls Direct customer observation Market research, market monitoring Benchmarking Quality scorecards 85 Surveying Guidelines • Include an introduction that is enticing and clearly states the purpose of your research. Also include instructions on how to complete the survey and an estimate of how much time it will take. • If your questions are biased, unclear, or ambiguous, you will get misleading responses. • Consider how specific the questions need to be and whether your audience is willing and able to answer them. • To maximize results, make sure you: • Ask questions that provide the information you need to solve your problem. • Avoid technical terms, jargon, and acronyms. • Organize your questions in logical groups. Web surveying makes this easy • Ask important questions first -- demographic questions last. • Be sensitive to the feelings of the respondent. • Keep your survey short, simple, and to the point. • Finish your survey with a place for participants to add comments and thank them for their assistance. 86 VOC Exercise o Using the template below, take 10 minutes and begin creating a VOC plan for your project . Be prepared to discuss with the class. Voice of the Customer Plan WHO Project: ______________________________________ WHAT & WHY SOURCES REACTIVE SOURCES PROACTIVE SOURCES SUMMARY 87 Voice of Business (VOB) • The Voice Of the Business are the needs, wants, expectations, and preferences, both spoken and unspoken, of the people who constitute (run) the business itself (e.g., shareholders, officers, or others involved in corporate governance). • Example metrics from VOB: o o o o Revenue Growth % Market share Margin • The sweet spot for a project objective is where VOC and VOB overlap. 88 Voice of Team (VOT) & Voice of Benchmark (VOX) • The “voices” are what guide you to your objective. • VOT and VOX are also important voices to consider. • Examples of VOT: o What problems are the team members consistently facing with the current process? o Which aspects of the process do the team members think can be improved? o Do the team members feel like they have the tools to aid in the process improvement? • Examples of VOB: o Which Michelin plant has the best lead time for this process globally? Can we also achieve this lead time? What similarity or differences between our plants affects these lead times? 89 DEFINE SIPOC 90 Create High Level Process Map o Understand the process view. o Apply the steps within a SIPOC (supplier, input, process, output, customer) to your process o Gain confidence in the concept of Rolled Throughput Yield for identifying opportunities for immediate focus o Best to start the SIPOC from the right side – using the voice of customer. 91 The Process • All activities take the form of a process. • The quality level of a product or service is directly related to the bounded process steps. • In general, people tend to look at failures in isolation, and ignore the variation within the process as a cause. • As business leaders, we must address the process as a whole in order to make real change. 92 The High Level Process View Suppliers Inputs • Mankind • Machines • Material • Methods • Measures • Mother Nature Process Step A Outputs • Products • Services • Documents • Decisions Customers • External • Internal Step B Step C o The high level view of a process helps • Clarify project boundaries (start and stop points) • Understand potential causal relationships to be explored later • Identify the Customers impacted by the process for gaining the Voice of the Customer (VOC) 93 Purpose of the SIPOC o To create a high-level view of the process o To prevent scope creep o To identify potential areas for improvement o To generate a list of customers for your process 94 SIPOC Process S Step A I Step B P Step C O Step D START C Step E STOP • Identify Process Beginning and End. • List 3-5 High Level Process Steps within that characterize the whole 95 SIPOC Inputs S I • Mankind • Machines • Material • Methods • Measures • Mother Nature P Input 1 Input 2 Step A Input 3 Input 4 Step B Input 5 Input 6 Step C O C • Individually use the 5-7 Process Steps to generate Inputs. Input 7 Input 8 Step D • List the only the major Inputs for each step. Input 9 Step E • Consolidate like Inputs (Example: Operator/Technician) Begin thinking of ways that you might measure these inputs 96 SIPOC Suppliers S I P Vendor 1 Vendor 2 Input 1 Input 2 Step A Dept 1 Input 3 Input 4 Step B • Who are the suppliers of the inputs? Vendor 3 Input 5 Input 6 Step C • Is there a particular supplier that provides a larger share of inputs, or seems to generate the most issues? Dept 2 Input 7 Input 8 Step D Vendor 4 Input 9 Step E O C Critical suppliers must be brought into the project to ensure success 97 SIPOC Outputs S I • Individually use the 5-7 Process Steps to generate Outputs. • List the only the major Outputs for each step. • Consolidate like Outputs P Step A O C Output 1 Step B Step C Output 2 Output 3 • Products • Services • Documents • Decisions Step D Step E Output 4 Outputs will be analyzed in more detail when determining the VOC 98 Customer Levels Consumers Distributors Downstream Process Distribution Center Contractors End Users Quality Control Employees Database Document Control 99 SIPOC Customers S I •Who are the customers of the outputs? • Are there any Customers who deserve special attention, and/or warrant extra consideration? P Step A O Output 1 C Customer 1 Customer 2 Step B Step C Customer 3 Output 2 Output 3 Step D Step E Output 4 Give this step special attention – the VOC depends on it 100 Suppliers SIPOC Example Inputs Manufacturer Copier Office Supply Company Paper Toner Yourself Original Power Company Electricity Process Outputs Customers Copies You File Making a photocopy Others Process Steps Put Putoriginal original on glass on glass Close CloseLid Lid Adjust Adjust Settings Settings Press Press START START Remove Remove originals originals and andcopies copies 101 SIPOC Analysis • Instructions: Select one process (preferably the one you will be studying) and fill in the table in the next frame. • Time: 10 minutes 102 SIPOC Example 103 Example: Coffee Shop What What isis the the entity entity that that moves moves through through aa coffee coffee shop? shop? • When the customer arrives at the shop, they have a need-- a need for a cup of coffee. • That need is translated into a customer order. It is this order that actually flows through the coffee process and carries the need. o This customer order may change from information to physical material and equipment as it moves through the process. • As the order moves through the process, each activity adds a degree of fulfillment to that order. • At the end of the process, the fulfilled order is delivered. o To the customer, the output of this process is a cup of coffee. o To the process manager, the output of the process is a successfully completed order. 104 Coffee Making Exercise You have been identified as a team for instructing future Six Sigma Leaders in the activity of making coffee. • There have been complaints about the coffee, and your mission is to improve the process of making coffee with our existing equipment (Mr. Coffee type maker). • Your first task is to document the process with a SIPOC. • Good luck! • 105 Process/Product Performance Indicators for Efficiency Process Yield / Rolled Throughput Yield Cycle Time Takt Time Overall Equipment Effectiveness 106 Process Yield 1000 pcs Step A Step B End of Process Yield Good X 100 Opportunities Step C 10 BAD = 990 / 1000 X 100 = 99% 990 Good 107 Process DPMO (Nonconform Rate) 1000 pcs Step A Are we seeing everything? Step B End of Process DPMO Step C Defects 10 BAD X 1,000,000 Opportunities = 10/ 1000 X 1MM = 10,000 990 Good 108 Process DPMO (Nonconform Rate) 1000 pcs Step A 48 Parts Reworked 76000 DPMO Step B 76 Parts Reworked Step C The Hidden Factory 48000 DPMO 10 BAD 990 Good 109 Rolled Throughput Yield 1000 pcs Step A 95.2 % Yield 48 Parts Reworked 952 Good Step B 92.4 % Yield 924 Good Step C RTY = .952x .924 x .99 = 0.8708 = 87.1% 76 Parts Reworked 10 BAD 99 % Yield 990 Good 110 Rolled Throughput Yield o Collect yield measures for each process step o Calculate rolled throughput yield to establish a baseline for the entire process o Revisit your project scope o Significant differences in yield suggest creating a new map or refocusing your project on the sub-process with the lowest yield Start Stop Y RT P lass lass Y ield 95% 44% Y ield Y ield 95% 60% Y ield Y ield 90% 90% 111 Cycle Time: Little’s Law Work in Process Cycle Time  Exit Rate  Exit rate is the count of how many units leave the system in a given time  Work in process is the count of how many units are in the process at a given time  Cycle time should match the “heartbeat” of the process: o o Called takt time This enables one-piece flow, just-in-time, and other benefits 112 Customer Order-to-Billing Process CYCLE TIME PROCESS IS THE “FLOW” OF INFORMATION & PRODUCT THROUGH THE COMPANY 1 Order Entry 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 2 > Production Control 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 3 > Factory Order Packet 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 4 > Stamping 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 5 > Plating 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 6 > Molding 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 7 > Assembly 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 8 > Shipping 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ 9 > Billing 1. ________ 2. ________ 3. ________ 4. ________ 5. ________ 6. ________ OPERATIONS ARE THE “WORK” THAT TAKES PLACE IN EACH STEP OF THE PROCESS 113 Worker Cycle Time The total time required for a worker to complete one cycle of operations. 114 Operator Cycle Time Seconds 50 40 TAKT Time 30 20 10 0 Op #1 Op #2 Op #3 Op #4 Op #5 Total 115 Standard Operations The objective of Standard Operations is to provide balanced production among all processes with minimum labor and WIP inventories through the best combination of people and machines. 116 Elements of Standard Operations     TAKT Time Work Sequence Standard WIP Worker Cycle Time 117 TAKT Time TAKT Time = Total Daily Operating Time Total Daily Requirement 60 sec x 60 min x 7.5 hrs x 2 shifts TAKT Time = 3,000 pieces TAKT Time = 54,000 sec. 3,000 = 18 sec TAKT Time is the rate at which the customer buys the product, one part every 18 seconds. 118 Elements of Work Sequence Sequence of activities that each worker performs to complete ONE cycle  Does not necessarily represent part routing  Requires multi-skilled workers  Includes quality activities as well as production activities (The inspection function is integrated into the value-adding work.) 119 Separation of Worker & Work Station One Worker/One Work Station One Worker/Several Work Stations 120 Overall Equipment Effectiveness (OEE or TRS) • OEE / TRS measures three main equipment production process components: o Availability of equipment: • Breakdown loss • Setup and adjustment loss o Performance efficiency: • Minor stoppage loss • Idling loss • Reduced speed loss o Rate of quality products: • Quality defect and rework loss 121 Calculating Availability Availability = Actual operating time Planned operating time 100  Planned operating time: – The daily or monthly time available for operation minus all forms of scheduled stops (e.g., breaks in the production schedule, lunch, rest breaks, stoppage for routine maintenance, team meetings, training, etc.)  Downtime: – The total time taken for unscheduled stoppages (e.g., breakdowns, retooling, changeover, adjustments, changes, etc.)  Actual operating time: – The amount of time the machine is not idle – Equals: Planned operating time – Downtime 122 Calculating Performance Efficiency Actual amount processed 100 Performance efficiency = Ideal amount processed • Ideal amount processed: o The ideal amount that can be processed per time unit (minute, hour, etc.) as determined by equipment design specifications o Times the operating time (in minutes, hours, etc.) • Processed amount: o The actual amount processed 123 Calculating Rate of Quality Products Rate of quality products = (Actual amount processed – Amount defective) 100 Actual amount processed • Amount processed: o The total amount of product, good or bad, produced in a given amount of time • Amount defective: o The total processed amount that contains defects • Notice that this is the first-time yield for that equipment 124 OEE / TRS : Establishing the Baseline OEE = Availability Performance efficiency Rate of quality products 125 Why Do We Need to Measure TRS? • • • • • • • Calculates actual effectiveness of equipment Accounts for loss factors Provides data for improvement Makes work easier Helps to understand actual plant capacity Helps to develop accurate capacity plans Helps to attain a world-class benchmark and beyond 126 Calculating OEE / TRS 1. Enter data as required 1a. Use the calculator to convert to minutes or units/min 2. Spreadsheet returns 1. Percentage availability 2. Performance efficiency 3. Rate of quality products 4. OEE 127 Exercise: Calculating OEE / TRS Objective: Practice calculating overall equipment effectiveness Instructions: o o Work in pairs or trios Using the data provided below, calculate the OEE Time: 10 minutes 128 Standard WIP Minimum number of on-hand parts for a worker to complete one work cycle  May be determined by standard quantities if one-piece flow does not exist 129 Project Charter 130 Project Charter • Each Lean Six Sigma Project must have a Project Charter • Initially developed during the Define phase • Updated during each phase • Utilized during each project phase review 131 Project Charter V... (Version Nb) dated ../../.. (date) : Project name Team (Team name) Trigger (Context : Problem / Opportunity) Constraints / Risks & Guide lines Stakeholders  Sponsor :  Central team : xxx (Team Manager) xxx (Expert) xxx, xxx, xxx.  Other participants : xxx ... Stakes & Expected impacts ... Activities perimeter & Coordination needs  MW Garant : xxx  MW Garant : xxx ... Objectives & KPI ... Deliverables (CCVx) Key steps Key dates ... ... Description Start. Date CCV0 Stage ... : ...... End. Date Kick Off CCVx Stage... Stage... Stage ... : ...... Stage Stage...... Stage ... : ...... Stage Stage...... Commitments (Signatures) Sponsor : Central team : Auteur: A. LEVECQUE Valideur: F. SOULIGNAC Confidentialité: D3 Conservation: WA+3 Date d’édition: OCTOBRE 2018 Référence: 060_TEP_MW 132 Deciding the What and Why o What is the purpose of your project? o How does your purpose relate to customer needs? - What do you need to know about the needs of the customers you’ve identified to make sure your project purpose is on track? 133 Revisiting Your Charter o Now that you know about the SIPOC aspects of your project, take a few minutes to review the work you did on your charter. Make any modifications you think appropriate. • Are the boundaries of your process better defined? • Do you know which steps in the process have the lowest yield? • Are your customers clearly identified, and are there any potential “new” customers where improvements will generate a higher business impact? 134 Definition CTQ Critical To Quality A CTQ is a Characteristic of a Product Or Service Which Fulfills a Critical Customer Requirement Or A Customer Process Requirement It should be a measureable number. 135 Translating VOC into CTQs VOC CTQ Tree CTQ CTQ CTQ I want need CTQ CTQ CTQ CTQ CTQ 136 Examples of CTQ’s • On time delivery • No defects • Safe workplace • Safe product • Ship complete orders • Clean hotel room • On time payments • Safe highways • Part within tolerance • Use of proper forms • Durable packaging • Accurate billing • Friendly service • Overnight delivery 137 Example: CTQ Tree Need Driver Thickness CTQ Uniform Within Tolerance Quality Plated Parts Contamination General Hard to measure thickness (inches) +/-.0005” thickness (inches) .0029”<>.00313” Blemishes #/shift 6σ Brown Spots #/shift 6σ Particles #/shift 6σ Order Fill Rate 100% Delivery Metrics Line Item Fill Rate Order Accuracy 100% (#parts/#ordered)x100 % lines complete 97% % lines correct Specific Easy to measure 138 Generating CTQs • Instructions: Use the blank tree diagram on the next slide to translate a customer need from your project into a CTQ requirement. Be prepared to discuss your work with the class. • TIME: 10 Minutes 139 Generating CTQs Need General Hard to measure Drivers CTQs Specific Easy to measure 140 Revisiting Your Charter o Do you still think customers would consider the project a high priority? • If not, can you modify your focus to make it more relevant to customer needs? • If you can’t answer the question, what additional information can you collect to determine how the customer might perceive your project? • What standards do you consider to answer the question? o Do you have enough data to justify working on this project? • If not, can you get timely information so you can keep your project moving forward? 141 Define Phase Outcome • The main deliverable of the Define Phase is the completed Project Charter. • Problem is fully defined. • Baseline is clearly stated. • Targets are clearly set and follow SMART principle. • All of the above are derived from gathering all Voices, the SIPOC, and Data Collection on the process. 142 MEASURE 143 The Value Stream 144 Work as a System Making improvements that last requires us to see work as a system—the result of a series of interactive functions, operations, methods, and processes Marketing Sales Order Research Product/Service Design Planning/ Scheduling Production/ Processing Delivery Products/Services Service Customer Raw Materials, Information, Supplies Market Research Visualize the workflow from end to end! 145 Quality, Systems, and Processes • Quality is judged by customers based on the output of a process or the system • Focusing only on the individual worker will not lead to greatly improved quality that lasts • To improve quality, the processes and system must be improved • Simply focusing on or defining a process or the system is not improvement—we have to make changes and use data to show the change is improvement 146 The Real Organization STRATEGY PROCESS FUNCTIONS • Products and services for customers are not produced by functions, but by processes that tend to cross functional lines • Some of these processes tend to be the way customers identify with the company • Functions are (or should be) the residence and building place for competencies • Process capabilities and competencies are the key leverage points to achieve strategy (desired state of the organization) 147 What Is the Value Stream? The value stream is the entire set of activities required to bring a product or service into the hands of the customer1 Suppliers 1 Processes Customers From Lean Thinking, Womack and Jones, 1996. 148 What Is the Value Stream?, cont. Value streams can be defined for any industry 149 Value Stream and Customer Requirements • The value stream exists to provide products and services that meet the customer requirements • Understanding customer requirements is critical to the value stream mapping process 150 Detailed Description of VSM 151 VSM 1. Overview of VSM 1.1. Objectives 1.2. Deliverables 1.3. When to use VSM? 2. How to implement VSM? 152 VSM Objectives VSM ensures full understanding of all flows (materials and information) and activities required to satisfy customers' requirements. 153 VSM 1. Overview of VSM 1.1. Objectives 1.2. Deliverables 1.3. When to use VSM? 2. How to implement VSM? 154 VSM Deliverables VSM - Value Stream Mapping (mapping of value chain) is a methodology used to analyze and formalize activities and flows in order to understand them, identify criticality and areas for improvement and eliminate waste. Based on SIPOC réalized into « DEFINE » stage of DMAIC methodology, 3 main tools allow to structure the global methodology of VSM • • • Activity and flow mapping VA/NVA analysis Waste hunting 155 VSM 1. Overview of VSM 1.1. Objectives 1.2. Deliverables 1.3. When to use VSM? 2. How to implement VSM? 156 VSM When to use VSM ? VSM can be used to map whole or parts of processes. The approach involves conducting VSM in participatory mode during the analysis phase of a "project", then updating it at least once a year or in real time to reflect changes in the process. In certain cases, "Event" mode could be made to concentrate the analysis over 4 or 4.5 days. 157 VSM 1. Overview of VSM 2. How to implement VSM? 2.0. Prerequisites 2.1. Activity and flow mapping 2.2. VA/NVA analysis 2. 3. Waste hunting 2.4. Using VSM in project mode 158 VSM Prerequisites • The team involved in VSM must understand the basic concepts of value for the customer, waste and implementation times. • Accurate basic data forms the basis of VSM. • The VSM methodology must be carried out by a certified facilitator and involve representatives of activities in and around the defined area. • VSM must be carried out with the operational team as it has better knowledge of operational tasks than the other people involved in the process. • The preparation phase made it possible to challenge the implementation of conditions for success and plan the required resources (particularly the experts and/or people who are not in the operational team). 159 VSM 1. Overview of VSM 2. How to implement VSM? 2.0. Prerequisites 2.1. Activity and flow mapping 2.2. VA/NVA analysis 2.3. Waste hunting 2.4. Using VSM in project mode 160 VSM Activity and flow mapping Activity mapping is used represent activities and information/material flows It is represented by a workflow diagram to illustrate and share a clear understanding of a process or series of simultaneous processes. The mapping of a process must reflect what is actually happening! Supplier •External supplier •Internal supplier •Outsourcing •Service provider •etc. Input •Services •Products •Materials •Documents •Information •Invoices •Contracts Output Process 1h 1h 2h 1h 1h 1h 1h 1h 2h •Services •Products •Materials •Documents •Information •Invoices •Contracts Customer •End customer •Outsourcing •Wholesaler •Internal department •Another workstation •Service provider 1h 1h 1h 161 VSM Activity and flow mapping  Key principles of process mapping • Objectives Understand the current process and what is expected of each activity Help to identify what must be done to be more focused on the customer and offer them a higher level of satisfaction Help to measure and compare to find out where/how/to what extent improvements can be made o o o • o o o o o Organization A leader/facilitator outside the process Work in a workshop session (max. 2 hours) Group of around 5 people: process users Contribution from external experts (potentially) Debriefing with the management • o o o Best practices A participatory and cross-functional method Focusing on the process The participation (or lack of participation) of the manager must be specified prior to the project  Success depends on resources being available 162 VSM Activity and flow mapping  The visual representation of the studied process, the “forms or cards” are proposed to facilitate the reading and understanding.  To help the teams to make the cartography of the process, of the “forms or cards” are recommended for description (next pages): • • • • •  Task of processes Task of control Wait or storage Process (machine) Flow (push-pull) These «cards » include some informations describing the VSM elements and allows VA/NVA analysis 163 VSM Activity and flow mapping  Task of process task duration Tittle of task Duration / Unit time + frequency occurrence description who Who does the task Short Description VA NNVA NVA VA/NVA analysis 164 VSM Activity and flow mapping  Task of Control task duration Tittle of task Duration / Unit time + frequency occurrence description who Who does the task Short Description VA NNVA NVA VA/NVA analysis 165 VSM Activity and flow mapping  Wait or storage waiting or storage duration Duration Tittle of storage or Wait quantity (who if waiting) NNVA NVA Number of units into the storage + additional informations + description if necessary NV Analysis 166 VSM Activity and flow mapping  Tittle fo process Process (machine) Process Caracteristic Data describing the process (ej.: unit time, TRS, capacity ,dim.chang e time, … VA NNVA R/G R/G R/G R/G NVA VA/NVA Analysis 167 VSM Activity and flow mapping  Tittle of Process or stage of process Lead time "Lead time" Calculation Product/Sequence Consolidation of VA data Added value (VA): Duration calculated based on VSM Non Added value (NVA): unit of time Lead time: Consolidation of NVA data unit of time Calcul ation of ratio VA vs total time VA%: unit of time % 168 VSM Activity and flow mapping  Description of material flow If “I produce” according to a planning or what arrives to me in FIFO, I am in Push flow : If “I produce” according to the need from my customer, I am in Pull flow : 169 VSM Activity and flow mapping  Description of Information flow 170 VSM Activity and flow mapping  Examples 171 VSM 1. Overview of VSM 2. How to implement VSM? 2.0. Prerequisites 2.1. Activity and flow mapping 2.2. VA/NVA analysis 2.3. Waste hunting 2.4. Using VSM in project mode 172 VSM VA/NVA analysis What is the value of a process ?  le Customer is ready to pay for what ?  only tasks or part of tasks giving him some value! 173 VSM VA/NVA analysis What is the value of a process? Example of value chain analysis Reception –tracability NNVA Waiting Orientation in departmt What is the customer willing to pay for? Added value! Waiting Go to Radiology dept room Waiting Radiology Waiting Go back room Waiting Care Waiting Everything else is waste. Exit 174 VSM 1. Overview of VSM 2. How to implement VSM? 2.0. Prerequisites 2.1. Activity and flow mapping 2.2. VA/NVA analysis 2.3. Waste hunting 2.4. Using VSM in project mode 175 VSM Waste hunting  What is the waste hunting ? What is waste?  In order to provide our customers with what they have asked for, when they want it, we carry out activities in our process that do not necessarily add value for the customer - this is called waste! What is the waste hunting ?   Waste The waste hunt is a tool used to identify, classify and eliminate waste. Waste refers to any activity that, from the customer's point of view, does not add value to the requested product or service. The waste hunt classifies waste into 7 types during the identification phase. Non-quality Overproduction Waiting Transportation Inventory Motion Excess processing 176 VSM Waste hunting • The construction of the VSM describes the “normal” situation of the process. Analysis VA/NVA made it possible at this stage to identify the in times of non added-value and this non added-value is to be regarded as waste. However the “normal” process is often penalized by additional waste or “irritating” situations. This is why it is necessary and important to identify some additional waste and to visualize them on the VSM, for better considering the actions of eradication thereafter. • A basic form, like a « post-it » can be used with following informations : Duration Frequency Type of waste and description • Following the identification and the consolidation of waste, the calculation of non added value (NVA) must to be updated 177 VSM Waste hunting A key question in the waste hunting  We need to make sure that what we do provides added value from the point of view of the customer. The key question to ask in order to assess the value is:  "Would a customer pay for this activity if they knew about it? "  The other way round: "If we do something special for the customer, will we be rewarded? " 178 Types of Activities Lean practitioners study all work throughout the company / enterprise to determine whether the work is: 179 Types of Activities • Value Added Work Any activity transforming the part, product or service that a Customer is willing to pay for. • Necessary Non Value Added Work Any activity that does not add value but it is currently necessary – required by legal or a central referential that can be shown. • Non Value Added (Pure Waste) Any activity that does not add value and is not necessary to meet the needs of the Customer. 180 Waste • Waste is: Any activity that consumes time, space or resources but does not add value to the product, service or other deliverable as viewed from the perspective of the external customer. Things to remember about waste:  Symptom – not Root Cause  At System and Process level  Eliminate Root Cause 181 Types of Waste: Shop Floor • Over Production • Inventory • Waiting • Transportation • Motion • Over Processing • Quality Defects • People’s Skills 182 Waste of Overproduction TEN PLEASE! CALL IT TWENT Y? …22 TO BE ON THE SAFE SIDE! 183 Waste: Overproduction • Causes o Producing faster than the next step o Batching work or moves for economic reasons o Unbalanced resources o Producing extra • Effects o Queues o Intermediate stocks o Finished inventory 184 Over-production Extra Inventory Extra Handling Extra Space Extra Interest Charge Waste of Overproduction Extra Machinery Extra Defects Extra Overhead Extra Paperwork Extra People Note: Machines & operators do not have to be fully utilized, as long as market demands are met. 185 Waste of Inventory $ $ $ $$ $ $ $ Keep Looking! I know it’s in here somewhere! $ $ $ $ 186 Waste: Inventory • Causes o Takes too long to make or get product o Economic order quantity • Effects o Cash tied up o Space to store o Obsolescence and time expiries o Handling cost (receiving, counting, issuing) 187 Waste: Invent