Lss pharma presentation2-2006

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Strategic Lean Six Sigma:

Receiving Results That Are Most Important To Your

Business

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Agenda

• Process not a Program

• Lean Principles

• Implementation process

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Why do Lean?

• Reduce manufacturing and overhead costs by 20%• Deliver products/services in 50% to 80% less time• Free up capital through a 75% to 90% reduction in

inventories• Reduce time to market by 50%• Achieve 40% to 50% improvement in labor

productivity

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Don’t Forget

•Motorola lost the opportunity to reduce $5 billion in cost by forgetting non-manufacturing activities

Bob Gavin

Former CEO of Motorola

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Process

Not A

Program

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Basis of Understanding

• Toyota’s 12 rules• D.I.K.A.R.(Data-Information-Knowledge-Action-

Results) Model• Lean Principles• ISO-9004• Moving to Green

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Toyota’s 12 Rules

1. Start with action

2. Learn by doing,training 2nd

3. Start with value stream projects

4. Use value stream mapping to develop future state

5. Kaizen

6. Organize around value streams

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Toyota’s 12 Rules

7. Make it mandatory

8. Identify opportunities with big $

impact

9. Re-align metrics with value stream

10. Develop your own way

11. Hire or develop Lean leaders

12. Use experts for teaching

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Continuity of Leadership

• Start from the top• Involve from the bottom up• Middle managers-”Change Agents”• It takes time• Extremely difficult

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D.I.K.A.R

DATA

INFORMATION

KNOWLEDGE

ACTION

RESULTS

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Typical Process

• Companies do a great job of gathering data• Make quick decisions with the data- thinking it

will solve the problem-”instant gratification”• Usually the decision ends up being a short term

solution or incorrect

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The Process- Current State

Data Information Knowledge Action Results

Instant Gratification

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The Process- Desired StateD.I.K.A.R.


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Data

• Linked to corporate objectives• Valid and complete• Significant• Real time• Organized and sorted • Communicated

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Information

• Easily accessible to all• Organized for easy problem solving• Actionable• Organized and sorted• Communicated to all

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Knowledge

• Expanded through brainstorming• Shared with all to identify improvement

opportunities• Documented,accessible and communicated to

all

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Action

• Planned and coordinated (Moving to Green)• Performed in a timely manner• Supported• Communicated (Moving to Green)

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Results

• Permanent• Maintained (Moving to Green)• Verified for effectiveness (ISO-9004)• Documented (Moving to Green)• Communicated

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Lean Principles

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What Lean Will Look Like

Traditional• Read reports• Controller drives cost• My view• First answer• Quantity of info• 4 M’s(Material,Machinery

Manpower,Methods)

Future• Walk floor• Waste drives cost• Common view• Dig past first answer• Quality of info• Activities,connections

and flows

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What is Lean?“A manufacturing philosophy that shortens the time line

between the customer order and the shipment by eliminating waste”

- John Shook

It is a people centered system that focuses on continuously improving all aspects of the business.

–It strives to constantly expose and eliminate problems and sources of waste.

–It seeks to simultaneously improve quality, reduce lead-time and reduce cost.

It is NOT a system to eliminate people!

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Flip the Triangle

Reactive

Preventive

Predictive Predictive

Preventive

Reactive

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Shrink the Triangle

PredictivePredictive

PreventivePreventive

Reactive

Reactive

$

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10.00%

30.00%

60.00%

Traditional-vs-Lean

Waste

Not needed at all in completing

work- adds no value

Examples

-Looking for tools

-Walking to get parts

Necessary non-value added work

No value added but must be completed

under present work conditions

Examples

-Reach for part

-Pre-assemble part

-Q.C. check

Value added work

Changes the form,fit or function of a

part or assembly

Examples

-Drilling hole

-Installing part

WasteWaste

Necessary non

Valued added work

Value added

work

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If I Have Six Sigma-why Lean?

• Additional tools for Six Sigma experts• Blending of Quality and Operations• Quality becomes part of the process• Kaizen projects linked to solving bottlenecks in

Lean process

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If I Have Lean-why Six Sigma?

• Additional problem solving techniques• Focus of Kaizen teams on bottlenecks• Black belts can be leaders of process• Maintain/Sustain the gain

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Six-Sigma•Define, Measure,Analyze,Improve and Control•Great Analytical tools to support Lean•Continuous Improvement to achieve high customer satisfaction•Usually project specific-Kaizen events

•Supports Lean by identifying and minimizing bottlenecks

Lean•Continuous flow•Collaboration of many•Value stream maps- create continuous flow•Customer requirements drive takt time

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Principle #1Structure every activity

• Can and are those doing the activity performing as indicated– Sequence

– Following work instructions

– Following control plans SS

• Is the activity capable of producing the desired results SS

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Principle #2Clearly connect every

customer/supplier• Every relationship is a customer- supplier link

– Think of what can be done in a step to reduce errors or make it easier person downstream to complete the task without errors (Errorproofing SS)

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Principle #3Specify and simplify every flow path

• Make every flow path as simple as possible – Should be easy to do the right thing and more

difficult to do it the other way (Errorproofing SS)

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Principle #4Improve through experimentation

• Observe results as they match up against the ideal state

• Determine if changes made are sustainable- Effectiveness (ISO-9004)

• Benchmark process and create a future state map

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5 Building Blocks

• Directly observe work as activities, interactions and flows

• Systematic waste elimination• Systematic problem solving• Establish one common approach of what and

how• Create a learning organization

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Directly observe work as activities, interactions and flow

Definition:

Deeply understand the current reality at the source

of the process, not the results of the process.

Observe how activities are performed, customers

and suppliers are connected and the information,

Material and people flow.

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What it means to me:• Where is waste

• Why is it what I’m doing/ What is being done that is not ideal

• Where are problems

• How will change improve things being done

• How does change compare to current state

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Tools to observe:

• Value stream map

• Activity maps

• Product process flow

• Video tape process

• “Go See” problem solving

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Value stream map• Current state• Takt time• Future state

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Systematic waste elimination

Definition:Waste is anything beyond the absolute

minimum amount of materials, manpower

and machinery needed to add value to a

product or service

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Value added activities:• Must be something the customer recognizes

as being important and is willing to pay for• Must alter the process output; the product

must change• Must be done right the first time

All ‘3’ criteria must be met

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7 Wastes:

T Transportation

I Inventory

M Motion

W Waiting

O Over processing

O Over production

D Defects

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Waste-Transportation

Manufacturing/Operations

-Double handling of parts between processes

-Unnecessary long routes to deliver parts

-Automated storage and retrieval systems

Administrative

-Double handling of data between processes

-Moving 15 people to another bldg. To meet with 1 person

-Sending mail via regular mail vs. e-mail

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Waste- Inventory


-Large quantities of parts/products to be shipped

-Just-in case buffers

-Excessively large stores/parts cribs

Administrative

-Storing office supplies both at desk and supply crib

-Keeping excessive books/files for obsolete activities

-Excessive amounts of office furniture in storage

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Waste- MotionManufacturing/Operations

-Excessive walking from one material container to another

-Excessive reaching for parts

-Unnecessary movements of automated equipment

Administrative

-Hand delivery of hard copy reports

-Office set-up requiring walking between phone,computer,etc

-Walking to get high use files in a remote location

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Waste- Waiting


-Waiting for machine to cycle

-Waiting for material to arrive

-One assembly team waiting for another team to finish

Administrative

-Delays in data handoffs

-Waiting for approvals

-Waiting for meeting to start

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Waste- Over processing


-Making a part to excessively tight tolerances

-Inspecting incoming material that was inspected at supplier

-Extra welds, fasteners, adhesives, etc.

Administrative

-Re-keying data

-Extra signatures for approval

-Training for a skill set that won’t be used

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Waste- Over productionManufacturing/Operations

-Over-speed in a production line

-Purchasing excess capacity on piece of equipment

-Transporting a 50 lb. box on a cargo truck

Administrative

-Generating unused reports

-Writing 15 page report when a verbal update would suffice

-Installing a phone for all employees when average use is 15 minutes

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Waste- Defects


-Reworking/repairing parts

-Scrapping parts

-Shipping wrong parts

Administrative

-Rewriting a project presentation

-Books/forms/brochures with typos

-Billing errors

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Systematic problem solving

ContainRoot Cause

CountermeasureVerify

Identify

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Define

Measure

Analyze

Improve

Control

Data

Information

Knowledge

Action

Result

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• Problem Solving Tools:– Value Steam Map– Pareto Chart– Fish bone diagram– Statistical analysis– Histograms

Six Sigma tools

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Establish one common approach of what and how

• Details of ‘What, How’

Standardize

Do

Check

Act

Where there is no standard…..

There can be no corrective action

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Establish one common approach of what and how

• High Agreement Tools:– Standard Work Instructions– 5S’s– Error Proof– Visual Control / Visual Display (Moving to Green)– Control Point Audits (Moving to Green)– Master Planning (Moving to Green)

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5S

Sort

Sustain Set in Order

Standardize Shine

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Sort

Definition: Involves sorting through the contents of your area and removing unnecessary items

Guiding principle: When in doubt, move it out

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Set in Order

Definition: Involves arranging necessary items for easy and efficient access and keeping them that way

Guiding principle: A place for everything, and everything in its place

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Shine

Definition: Involves cleaning everything, keeping it clean and using cleaning as a way that your area is maintained

Guiding principle: This area is your area, and you are responsible for it because you work there

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Standardize

Definition: Involves creating guidelines for keeping the area organized, orderly and clean, and making the standards visual and obvious

Guiding principle: State when Sort, Set in Order and Shine are fully maintained

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Sustain

Definition: Involves education and communication to ensure that everyone follows the 5S standards

Guiding principle: Everyone/ Every Day

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Create a learning organization

C C

B

C C

B

C C

B

A

Organization

P

D

C

A

P

D

C

A

P

D

C

A

TeamP

D

C

AIndividual

Individual

Traditional Lean

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Implementation Process

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Moving to Green

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CAR

Quality Plan

PEPPEP

PAR

Concerns Tracking

ISO9001Compliance

Audits

CARCARManagementManagement

SystemSystemIPPAPIPPAP

FMEAFMEA

ControlControlPlanPlan

WorkWorkInstructionsInstructions

QEQEProcessProcessAuditAudit

CI

HDHDCorporateCorporate

CSACSA

Best

PracticesBenchmarkin

g

Other H-D FacilitiesOther H-D FacilitiesKC

PDCTomahawk

Etc.

UpperUpperLeadershipLeadership

SPCSPC EffectivenessEffectivenessAuditsAudits

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Maturity Level

1

2

3

4

5

Continual improvement emphasized Improvement process in use; good results and sustained improvement trends.

Best-in-class performance Strongly integrated improvement process; best-in-class benchmarked results demonstrated.

Reactive approach Problem or corrective-based systemic approach; minimum data on improvement results available.

Stable formal system approachSystemic process-based approach, early stage of systemic improvements; data available on conformance to objectives and existence of improvement trends.

Performance Level Guidance

No formal approach No systemic approach evident, no results, poor results or unpredictable results.

Performance Criteria

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Scorecard

Moving to Green

Building BlocksArea 1 Area 2

Prepare the workforce

People trained in Lean techniques2 3

Clear vision of Lean developed3 4

Facilitator in place to help people2 2

Systematic waste elimination.

Rework eliminated3 3

Are inventories reduced to a minimum4 1

5S

Equipment, tooling and supplies in designated1 3

Focused factory

Value stream mapping used for current and future state2 4

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Checklist-Focused Factory

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Checklist- Prepare the Workforce

Level (Score) 1 Level(Score) 2 Level(Score) 3 Level(Score) 4

Limited knowledge of OE by organization3% or Less knowledgeable

Senior Management Knowledgeable10% knowledgeable

Middle Management and Union Leadership KnowledgeableTop Management developing a learning organizationUnion aware of OE25% knowledgeable

Supervision/Stewards knowledgeableImplementing Principals of a learning Organization65% Knowledgeable

# ofIssues

OERating

OE part of plant culturePlant is a Learning Organization95% knowledgeable

Level(Score) 5

OE Checklist

ActionsComments

Has the Organization prepared the workforce for Operational Excellence?

Preparethe

Workforce

What Do We Look For?What Are The

Key Requirements?

A

Operational Excellence is a business strategyHas management developed an assessment of awareness goals plans understanding and acceptance.Has the assessment defined the short term fixes of process disconnects that will be the basis for the entire improvement process?

Has a time phased action plan been developed, resources assigned, measurements established, and activities initiated?

The assessment has provided a thorough definition for senior management/ union leadership of the impact that Operational Excellence will have on cost of quality, cycle time, customer satisfaction, and competitive advantage.

Senior Management/Union Leadership is aggressively championing Operational ExcellenceManagement/Union Leadership has developed performance objectives to guide business process improvement.Cross functional teams assisted by expert facilitator to develop plan and implement Operational ExcellenceCross functional teams are active and achieving measurable results

Have personnel been thoroughly trained in all aspects of Operational Excellence?

Has Top Management developed a learning organization?A clear compelling vision of Operational Excellence exist.The attitude "were different" or "it can't be done" eliminated.

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Checklist-5S

What Do We Look For?# of

IssuesOE

Rating

2. Have all red tagged items been disposistioned within three weeks?1. Does the department have a defined location for cleaning supplies & equipment?

2. Are tools & equipment labels & floor markings clean & in good condition?

3. Are machines, equipment & floors clean, free of dirt & grease, and free of clutter?

4. Has the plant color coding scheme been followed when identifying storage locations?

5. Is there an identification scheme in place for linking tools to their storage location?

6. Is there a department layout with equipment locations located on the department 5S visual control board?

1. Does the department have a defined location for cleaning supplies & equipment?

2. Are tools & equipment labels & floor markings clean & in good condition?

3. Are machines, equipment & floors clean, free of dirt & grease, and free of clutter?

Lean Checklist

5SHousekeeping

ActionsComments

Sort

Has a sorting process been performed?

What Are The Key Requirements?

A

1. Has a red tag exercise been performed within the last six monthsIs a red tag form present on the department 5S board?

B

Set in OrderHas the Department placed

equipment/tooling/gauging in designated

locations?

C

ShineHas the department

performed & supplied a designated area for cleaning equipment?

Category Level (Score)

1

Level (Score)

2

Level (score) 3

Level (Score) 4

Level (Score) 5

5 S Housekeeping

No system in place that

improves and monitors the

5S rating

5S rating exists,

awareness training

complete and program

is in beginning

stages

Work areas contain only needed items. All needed items

are visually indicated and are in order. Cleaning is maintained daily and assignments

are posted

A standard practice for maintaining level 2 & 3

exists and is adhered to

daily.

The area has the ability to sustain a 5S program.

Rules and standards have been created,

people regularly trained and

management sticks to the

roles.

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5 Year Business Plan5 Year Business Plan

*Stakeholders*

Plant Manager Quality Manager

Operations Manager Controller

Area Manager #1 Human Resources

Area Manager #2 Production Control

Supervisor #1

Location Baseline 2006 2007 2008 2009 2010

Area #1

Prepare the Workforce 2.5 3 3.5 4 4.5 4.75S 1 2 4 4.2 4.4 4.8Focused Factory 2 3 3.5 4 5Waste Elimination 3.5 4 4.2 4.5 5

Area #2

Prepare the Workforce 35S 3Focused Factory 4Waste Elimination 2

*Corrective Action Plans*

Element Affected Corrective Action Responsibilty Year

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Action

• Answer the question: Is Lean the thing to do?• If Lean is right for you, “I recommend the following”:

– Define Lean criteria for your company (Future State) D– Develop baseline (Current State)– Identify gaps I– Develop assessment worksheets (Moving to Green)– Develop scorecard K– Develop 5 year business plan, which will drive corrective action A– Develop review process to measure results R

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Action

Everyone/ Every Day

Engagement of all

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Benefits of Lean

• Reduce manufacturing and overhead costs by 20%

• Deliver products/services in 50% to 80% less time

• Free up capital through a 75% to 90% reduction in inventories

• Reduce time to market by 50%• Achieve 40% to 50% improvement in labor

productivity

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Benefits of Process

– Benefit #1

• DIKAR model easy to understand and a tool to gain support. Answers the question why we want to do it.

– Benefit #2• Moving to Green allows:

– Setting baseline– Identify Lean criteria and the gaps in the system.– Setting corrective actions necessary to eliminate gaps.– Scorecard to measure progress– Actionable/measurable items for performance measurement.– Assessment process– Ability to create a real 5 year Business Plan.

– Benefit #3• Lean methodology that is part of the process not just a

program

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Close

Brain-vs- Braun

Collaboration-vs-Conflict

Many-vs-Few

Process-vs-Program

Sustainability-vs-Temporary

Lss pharma presentation2-2006

Documents

lean process

lean waste

lean leaders

strategic lean

lean continuous improvement

value examples

valued added work value

check value