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Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009 © 2008 All rights reserved. No part of this document may be redistributed or reproduced in any form or by any means, without the prior written permission from Tunnell Consulting, Inc.
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Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Page 1: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

Using Lean Six Sigma to Reduce Costs and Improve Process Performance

Ronald D. Snee

ASQ Philadelphia Section Six Sigma Panel Discussion

January 21, 2009

© 2008 All rights reserved. No part of this document may be redistributed or reproduced in any form or by any means, without the prior written permission from Tunnell Consulting, Inc.

Page 2: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Business Strategy and Methodology that increases

process performance resulting in:

Enhanced customer satisfaction and

Improved bottom line results ($$)

Leadership Development Tool:

"Perhaps the biggest but most unheralded benefit of Six

Sigma is its capacity to develop a cadre of great leaders”

– Jack Welch

What is Six Sigma?

Page 3: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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DeploymentImprovementBreakthroughSystematic,

Focused ApproachRight People:

Selected &TrainedResults:

Process & Financial ($$)

CommunicationRecognition and

RewardSix Sigma Initiative

Reviews

ProjectsRight Projects:

Linked to Business Goals

Project Portfolio Management

Projects: Execution Reviews Closure

Sustain the Gains: New Projects

Project Tracking and Reporting

Methods and ToolsProcess ThinkingProcess VariationFacts, Figures, DataDefine, Measure, Analyze,

Improve, Control 8 Key Tools:

Sequenced and LinkedStatistical ToolsStatistical SoftwareCritical Few Variables

Key Aspects of Improvement

Page 4: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Management Team

ProjectChampion

ImprovementMaster(MBB)

Team Leader(BB/GB)

And Team

Functional GroupsHR, Finance, ITEng, QA, etc.

Improvement Project Leaders

Page 5: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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THE PROCESSPROCESSOUTPUTS

CONTROLLEDVARIABLES

CUSTOMER

PROCESSINPUTS

UNCONTROLLEDNOISE

VARIABLES

Schematic of a Process and Its Variables

Page 6: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Blend Compress Coat Package

Process Variables

Environmental Variables

API

Excipients

Ambient Temperature and HumidityBlending and Compression RoomsRaw Material LotOperatorsEquipment

Blending Time and TemperatureCompression Speed and ForceCoating Air Temperature and MoistureWater Addition

DissolutionContent UniformityYieldWaste

Tableting Process and Its Variables

Page 7: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Process Inputs

Controlled Variables

Uncontrolled Variables

Critical Few Variables

Process Control and Optimization Are Enhanced

MeasureMeasure

AnalyzeAnalyze

ImproveImprove

ControlControl

Finding the Critical Few Variables

Page 8: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Blend Compress Coat Package

Process Variables (Xs)

Environmental Variables (Xs)

API

Excipients

Ambient Temperature and HumidityBlending and Compression RoomsRaw Material LotOperatorsEquipment

Blending Time and TemperatureCompression Speed and ForceCoating Air Temperature and MoistureWater Addition

DissolutionContent UniformityYieldWaste

Process Inputs (Xs) Process Outputs (Ys)

Y = f (X)Y = f (X)Y = f (X)Y = f (X)

Tableting Process and Its Variables

Page 9: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Sense Sense of of

UrgencyUrgency

Sense Sense of of

UrgencyUrgency

DefineDefine

ImproveImprove

ControlControl

Results ($$)Results ($$)

MeasureMeasure

AnalyzeAnalyze

DataData

LeadershipTeamworkStakeholder BuildingProject Management

Six SigmaSix SigmaToolsTools

DMAIC Process Improvement Framework

Page 10: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Tool Define Measure Analyze Improve Control

Project Charter

Maps

Cause and Effect Matrix

Capability Analysis

Gage R&R

Failure Modes & Effects Analysis

Multi-Vari Studies

Design of Experiments

Control Plans and SPC

Key Improvement Tools

Page 11: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Lean Manufacturing

Page 12: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Lean is a documentation of the key attributes

of the Toyota Production System

Set of principles for efficient operations

Set of tools

Focus is on:

Process improvement by

reducing waste and cycle time

Improving process flow

Lean Manufacturing

Page 13: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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IWEIGHING

468Kg

BLENDING COMPRESSION COATINGI I I

3 days

MBR REVIEW

I

4 hours65 hours

11.5 hrs4 hrs 40 mins44 hours

13 hours 6 hours 15 hours10 hours

email

2-3 day lead time 18 month

rolling forecast

Average # of Lots per month= 200

ManufacturingDaily Schedules

4-5 days

Daily ShipSchedule

BPX300mg

Building 5 PHILI

Yield = 99%

Setup = 150 mins

VA = 9 hrs

1 Shift

2 operators

Yield = 98%

Setup = 290 mins

VA = 8 hrs 10 mins

1 Shift

2 operators

Yield = 99%

Setup = 195 mins

VA = 705 mins

2 Shifts

2 operators

464.7Kg 454.4Kg457.74 Kg

Building 2 PlanningProvide 3 week projections to Mfg

WAREHOUSE

Time spent in Bldg 2 warehouse = 4hrs 40 mins

Yield = 100%

Setup = 60 mins

Wghing = 180 min

1 Shift

2 operators

Number of reviews = 5

Average Days = 5-1168 hours

I I I468Kg

PlanningSetup Batch

RecordReview

Cycle TimeTotal = 289 hrsVA = 29 hours

Value Stream Map Can Help Identify Key Areas to Target for Improvement

Page 14: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Specify value by specific product

Identify the value stream for each product

Make value flow without interruptions

Let the customer pull value from the product

Pursue perfection

Lean Principles

Page 15: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Overproduction: More than is needed and higher quality than is needed

Waiting (hang time) for machines, operators, raw materials, etc.

Transportation of materials: Wasted time due to unneeded product and material

movement Process inefficiencies and waste:

Inspection, NVA Work, duplication of effort Stock on hand (Inventory):

Work in progress and finished product used to cover for process problems

Motion: Unnecessary movement, multiple handoffs, continually

searching for materials, tools, supplies, etc. Defects:

Rework, missing information, not meeting specs

Types of Waste

Page 16: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Process MappingValue Stream

Spaghetti

Kaizen Event

5S (Sort, Store, Shine, Standardize, Sustain)

Mistake Proofing

Standard Work

Work Cell Design

Line Balancing

Videotaping

Rapid Changeover:Single Minute

Exchange of Dies (SMED)

Kanban (just in time)

Key Lean Tools

Page 17: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Shift Process AverageReduce Process

VariationRobust Products and

Processes

Six Sigma Objectives Lean Objectives

Improve Process Flow

Reduce Process Complexity

Reduce:WasteNon-Value

Added WorkCycle Time

Lean Six Sigma Improves Quality, Cost, and Delivery

Improvement Objectives

Page 18: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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There are Opportunities Both Within and Between Process Steps

Step A

Step B

Step C

Customer

Lean Six Sigma

A Three Step Process

Value-Adding Transformations Occur WITHINProcess Steps

Material and Information Flow BETWEENProcess Steps

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Page 19: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Some Improvement Projects

Process Project Impact Value

BioPharm

BatchRecordReview

Reduce CycleTime 35-55%

Inventory reduced $5MM Costs reduced $200k/yr

BioPharm Improve Yield Yield Improved25% Market Demand Met

SolidDose Manuf

Improve Quality

Process Validated

Product Launched After Many Year Delay

Tablet Manuf

ReduceDefectiveBatch Rate

Batch DefectRate Reduced Savings $750k/yr

Tablet Manuf

ImproveCoaterReliability

ProcessInterruptionsReduced 67% Savings $1.7MM/yr

Page 20: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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Snee, R. D. (2001) “Focus on Improvement, Not Training”, Quality Management Forum, Spring 2001, 7,8,16.

Snee, R. D. and R. W. Hoerl (2007) “Integrating Lean and Six Sigma – A Holistic Approach”, Six Sigma Forum Magazine, May 2007, 15-21.

Snee, R. D. and R. W. Hoerl (2003) Leading Six Sigma – A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies, Financial Times Prentice Hall, New York, NY. Chapters 3-4.

Snee, R. D. and R. W. Hoerl (2005) Six Sigma Beyond the Factory Floor – Deployment Strategies for Financial Services, Health Care, and the Rest of the Real Economy, Financial Times Prentice Hall, New York, NY. Chapters 3-4.

References

Page 21: Using Lean Six Sigma to Reduce Costs and Improve Process Performance Ronald D. Snee ASQ Philadelphia Section Six Sigma Panel Discussion January 21, 2009.

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For Further Information, Please Contact:

Ronald D. Snee, PhD

(610) 213-5595

[email protected]