LEAN CONCEPTS: The original seven muda, 'deadly wastes', identified in Toyota are: <ul><li>Overproduction (production ahead of demand) </li></ul><ul><li>Transportation (moving products that is not actually required to perform the processing) </li></ul><ul><li>Waiting (waiting for the next production step) </li></ul><ul><li>Inventory (all components, work-in-progress and finished product not being processed) </li></ul><ul><li>Motion (people or equipment moving or walking more than is required to perform the processing) </li></ul><ul><li>Over Processing (due to poor tool or product design creating activity) </li></ul><ul><li>Defects (the effort involved in inspecting for and fixing defects) </li></ul>
The Seven Wastes Defects Quality defects prevent the customers from accepting the product produced. The effort to create these defects is wasted. New waste management processes must be added in an effort to reclaim some value for the otherwise scrap product. Overproduction Overproduction is the production or acquisition of items before they are actually required. It is the most dangerous waste of the company, because it hides the production problems . Overproduction must be stored, managed and protected.
Transportation Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. as well as being a cost for no added value. Transportation does not make any transformation to the product that the consumer is disposed to pay for. Waiting Refers to both the time spent by the workers waiting for resources to arrive, the queue for their products to empty as well as the capital sunk in goods and services that are not yet delivered to the customer. It is often the case that there are processes to manage this waiting.
Inventory Inventory; be it in the form of Raw Materials, Work-In-Progress (WIP), or Finished Goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Any of these three items not being actively processed to add value is waste. Motion As compared to Transportation, Motion refers to the producer or worker or equipment. This has significance to damage, wear, safety. It also includes the fixed assets, and expenses incurred in the production process.
Over processing Using a more expensive or otherwise valuable resource than is needed for the task or adding features that are designed in but unneeded by the customer. There is a particular problem with this item as regarding people. People may need to perform tasks that they are over qualified for so as to maintain their competency. This training cost can be used to offset the waste associated with over processing.
Other candidate wastes Skill Organizations employ their staff for specific skills that they may have. These employees have other skills, it is wasteful to not take advantage of these skills as well. "It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance. Safety Unsafe work areas creates lost work hours and expenses.
Information Age of electronic information and enterprise resource planning systems (ERP) requires current / correct master data details. Material In branches where the material cost is relatively high, loss of raw materials, intermediates and finished products can be a very important area of focus. This has been proven in the Printing Inks industry, and the same surely applies elsewhere. x x x x x x x x x x x x x x x x x x x x
Lean Six Sigma The fusion of Lean and Six Sigma improvement methods is required because: <ul><li>Lean cannot bring a process under statistical control </li></ul><ul><li>Six Sigma alone cannot dramatically improve process speed or reduce invested capital </li></ul><ul><li>Both enable the reduction of the cost of complexity </li></ul>
Ironically, Six Sigma and Lean have often been regarded as rival initiatives. Lean enthusiasts note that Six Sigma pays little attention to anything related to speed and flow, while Six Sigma supporters point out that Lean fails to address key concepts like customer needs and variation. Both sides are right. Yet these arguments are more often used to advocate choosing one over the other, rather than to support the more logical conclusion that we blend Lean and Six Sigma.
How is it that Six Sigma and Lean are complementary? Here’s a quick overview. Six Sigma: <ul><li>Emphasizes the need to recognize opportunities and eliminate defects as defined by customers </li></ul><ul><li>Recognizes that variation hinders our ability to reliably deliver high quality services </li></ul><ul><li>Requires data driven decisions and incorporates a comprehensive set of quality tools under a powerful framework for effective problem solving </li></ul><ul><li>Provides a highly prescriptive cultural infrastructure effective in obtaining sustainable results </li></ul><ul><li>When implemented correctly, promises and delivers $500,000+ of improved operating profit per Black Belt per year (a hard dollar figure many companies consistently achieve) </li></ul>
Lean: <ul><li>Focuses on maximizing process velocity </li></ul><ul><li>Provides tools for analyzing process flow and delay times at each activity in a process </li></ul><ul><li>Centers on the separation of "value-added" from "non-value-added" work with tools to eliminate the root causes of non-valued activities and their cost </li></ul>
<ul><li>The 8 types of waste / non-value added work </li></ul><ul><li>Wasted human talent – Damage to people </li></ul><ul><li>Defects – "Stuff" that’s not right & needs fixing </li></ul><ul><li>Inventory - "Stuff" waiting to be worked </li></ul><ul><li>Overproduction – "Stuff" too much/too early </li></ul><ul><li>Waiting Time – People waiting for "Stuff" to arrive </li></ul><ul><li>Motion – Unnecessary human movement </li></ul><ul><li>Transportation – Moving people & "Stuff“ </li></ul><ul><li>Processing Waste – "Stuff" we have to do that doesn’t add value to the product or service we are supposed to be producing. </li></ul><ul><li>Provides a means for quantifying and eliminating the cost of complexity </li></ul>
The two methodologies interact and reinforce one another, such that percentage gains in Return on Investment Capital (ROIC %) are much faster if Lean and Six Sigma are implemented together. In short, what sets Lean Six Sigma apart from its individual components is the recognition that you cannot do "just quality" or "just speed," you need a balanced process that can help an organization focus on improving service quality, as defined by the customer within a set time limit.