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Background
• Currently, many companies have:
– Slow delivery of their products or services

– Constant rejections and/or c...
Lean Six Sigma Focus
Price

Price
Profit

Cost

Profit

Cost

Traditional Thinking

Profit

Cost

Lean Six Sigma Thinking
...
Evolution
TQC

TQM

Quality Circle

World
Class
Lean
Oper.

JIT
Supplier Dev.

Lean
Company

TPM
TOC
Lean

50% of
Fortune ...
Lean Six Sigma Focus
Non-value adding time
Value-adding time
Total Time

Total Time

Less: Time, Costs, Defects, Inventory...
Why Implement Lean Six Sigma?
• LEAN = Speed

• SIX SIGMA = Quality

– Flexible processes

– Problem solving

– Teamwork

...
Lean Six Sigma Applications
•
•
•
•
•
•
•
•
•
•
•
•

Manufacturing
Services
Offices
Hotels & Restaurants
Government
Health...
Impact Over Time

Benefits

With Lean Six Sigma

Traditional Improvement Methods

Baseline performance

Time

Lean Six Sig...
Not Everyone Has the Same Focus

Planning

Engineering

Sales

Production

Safety

Packaging

Legal

Marketing

Design

In...
Productivity Model

The 6 M’s
Manpower
Materials
Methods
Machines
Mother Nature
Measurements

Products/ Services
PROCESSES...
Limitations to Productivity

Mu!

 Muri = Overburden
 Mura = Variability

無
理
無
駄

 Muda = Waste
For more information, ...
OVERBURDEN = Muri
Overburden occurs when workers and/or machines are
required to produce beyond their natural limitations ...
VARIABILITY = Mura

Mura

MANPOWER

MATERIALS

Variability

EFFECT

TOTAL VARIABILITY

MACHINERY

METHODS

ム
ラ

DEFINITION...
WASTE = Muda
1 Overproduction

Muda

2 Excess Inventory

3 Defects
4 Movement
5 Over Processing

6 Wait Time
7 Transport

...
Excess Inventory = Waste

Variable
Demand

Inventory

Slow Production
Time

Long set-up times

Rework/Defects

Productivit...
Lean Six Sigma Tool Kit
Six Sigma

Lean











Strategy
◦ Hoshin Kanri
Structure
◦ TPM
◦ Value Stream Managemen...
Who Participates?
CEO, Director

Directors

Managers

Company-wide

20 to 50%

10 to 20%

1 to 3%

1 out of 10 BB

Executi...
Lean Company System
1. System/Process
Design

2. Definition of
Indicators

Improvement cycles

3.Implementation of
System/...
Design
• Design Methodology
• Prototypes
• Introduction to Manufacturing

• Validation

For more information, call 416.216...
Commercial
• Marketing



– Surveys

– Strategy Development
– Campaign
Development

Sales
◦ Customer Management
◦ Lean Sa...
Logistics
• Planning

•

Warehouse
–
–
–
–

– Resource Planning
– Scheduling

Warehouse Design
Receiving Materials
Materia...
Manufacturing/Service
• Layout Design

• Material Flow
• Work Sequence & Balancing
• Continuous Flow
• Quick Preparations
...
Accounting
•

Management accounting
– Strategy Management
– Budget
– Product Profit

•

Operational accounting
– Cost Acco...
Quality
• Lean quality system
– Lean Documentation
– Quality Deployment
– Quality Plan
– Quality at the Source
– Supplier ...
Implementation
3 to 6 weeks

4 to 6 months

Preparation

Pilot

• Diagnostic
• Hoshin Kanri
Strategies
Box score
• Impleme...
Insurance company
•

Initial situation in car insurance
– 14 – 17 days to pay total loss
– Delivery time 40 – 45 days
– Hi...
Painting Machines
•

Initial situation
– Delivery time 3 weeks + shipping
– Sales only cover expenses (no profit)
– High I...
Logistic (Pharmaceutical)
•

Initial situation
– Variable Demand
– High Inventory Levels
– Constant Back Orders

•

Main a...
Supply Chain Without LSS
Supplier

Average
Lead Time
Std. Dev.

Factory

1353
4.5
1091

Distributor

668
4.06
397

477
3.5...
Supply Chain With LSS
Supplier

Factory

Distributor

Customer

Retailer

Average

228

220

216

203

201

Lead Time
Std....
Why Some Can and Other’s Can’t
+

Skills

+

Incentives

+

Resources

+

Plans

=

Changes

+

Vision

Skills

+

Incenti...
QUESTIONS?

For more information, call 416.216.1067

33
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drake-webinars.com
March 19, 12pm EDT

How to Improve Your Safety Training
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We’re offering a free 30-minute Consultation about
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S...
Thank You for Attending
For Questions please contact Maysa Hawwash

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416-216-1067
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How to Improve Your Bottom-Line Using Lean Six Sigma

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How to Improve Your Bottom-Line Using Lean Six Sigma

  1. 1. For audio, it is recommended you dial in A copy of the slides + recording will be available post webinar AUDIO: 1-877-668-4493 Access Code: 666 050 929 Event Password: 1234 WebEx Support: 1-866-863-3910 How to Improve Your Bottom-Line Using Lean Six Sigma February 26th, 2014 Presented by: Luis Socconini, CEO of Lean Six Sigma, and Maysa Hawwash, National Manager of Talent Management Solutions Drake International
  2. 2. Free Offer We’re offering a free 30-minute Consultation about increasing your organization’s effectiveness through Lean Six Sigma. Contact Maysa to take advantage of this exclusive offer! mhawwash@na.drakeintl.com 416.216.1067 For more information, call 416.216.1067 2
  3. 3. Background • Currently, many companies have: – Slow delivery of their products or services – Constant rejections and/or customer complaints – Inconsistent quality – Poor customer service – High prices and costs – Poor internal communication THESE COMPANIES ARE DESTINED TO DISAPPEAR “It is not the big who eats the small… It is the fast who eats the slow” Jason Jennings For more information, call 416.216.1067 3
  4. 4. Lean Six Sigma Focus Price Price Profit Cost Profit Cost Traditional Thinking Profit Cost Lean Six Sigma Thinking Cost + Profit = Price Price Price (fixed) - Cost = Profit “With lean six sigma, our monthly expenses are 40% less than before implementing this great philosophy” John Darroch, CEO of Apollo Sprayers For more information, call 416.216.1067 4
  5. 5. Evolution TQC TQM Quality Circle World Class Lean Oper. JIT Supplier Dev. Lean Company TPM TOC Lean 50% of Fortune 500 companies Six Sigma 40s 50s 60s 70s 80s 90s For more information, call 416.216.1067 2000s 5
  6. 6. Lean Six Sigma Focus Non-value adding time Value-adding time Total Time Total Time Less: Time, Costs, Defects, Inventory, Space, Waste More: Productivity, Customer Satisfaction, Quality, Cash Flow For more information, call 416.216.1067 6
  7. 7. Why Implement Lean Six Sigma? • LEAN = Speed • SIX SIGMA = Quality – Flexible processes – Problem solving – Teamwork – Processes without variation – Stable processes – Redesign and innovation – Continuous flow • Cost reductions • Improvements in quality • Improvements in personal satisfaction For more information, call 416.216.1067 7
  8. 8. Lean Six Sigma Applications • • • • • • • • • • • • Manufacturing Services Offices Hotels & Restaurants Government Healthcare Accounting Logistics Construction Bank IT Sports For more information, call 416.216.1067 8
  9. 9. Impact Over Time Benefits With Lean Six Sigma Traditional Improvement Methods Baseline performance Time Lean Six Sigma offers a significant jump towards improvement. For more information, call 416.216.1067 9
  10. 10. Not Everyone Has the Same Focus Planning Engineering Sales Production Safety Packaging Legal Marketing Design Installation For more information, call 416.216.1067 Cost Reduction Customer 10
  11. 11. Productivity Model The 6 M’s Manpower Materials Methods Machines Mother Nature Measurements Products/ Services PROCESSES Parameters Quality Cost Response Time Safety Motivation Social Impact Environmental lmpact Input Output Productivity = Output Input For more information, call 416.216.1067 11
  12. 12. Limitations to Productivity Mu!  Muri = Overburden  Mura = Variability 無 理 無 駄  Muda = Waste For more information, call 416.216.1067 12
  13. 13. OVERBURDEN = Muri Overburden occurs when workers and/or machines are required to produce beyond their natural limitations or capacity. Muri Overburden Stressors TOO HEAVY! DIRTY! DANGEROUS! For more information, call 416.216.1067 13
  14. 14. VARIABILITY = Mura Mura MANPOWER MATERIALS Variability EFFECT TOTAL VARIABILITY MACHINERY METHODS ム ラ DEFINITION: Total Variability = Material + Machinery + Methods + Manpower For more information, call 416.216.1067 14
  15. 15. WASTE = Muda 1 Overproduction Muda 2 Excess Inventory 3 Defects 4 Movement 5 Over Processing 6 Wait Time 7 Transport Work that adds value Work that does not add value Others: Work that does not add any value, but is necessary under current conditions 8 Energy 9 Talent For more information, call 416.216.1067 15
  16. 16. Excess Inventory = Waste Variable Demand Inventory Slow Production Time Long set-up times Rework/Defects Productivity Problems Work for Inspections For more information, call 416.216.1067 16
  17. 17. Lean Six Sigma Tool Kit Six Sigma Lean        Strategy ◦ Hoshin Kanri Structure ◦ TPM ◦ Value Stream Management ◦ Talent Management ◦ Lean Accounting Basic Tools ◦ 5S ◦ Andon ◦ Value Stream Map Tools to Minimize Cycle Time ◦ Cellular work ◦ Quick set-ups Inventory Control and Planning ◦ Kanban Tools to Improve Quality ◦ Poka Yoke, Standardized Work Problem Solving ◦ 8 Disciplines/A3 • • • Define – Project management – Gantt chart • Measure – Data Collection – Histograms, sigma level – SIPOC – Gauge R&R • Analyze – Process Capability – Hypothesis Testing – Confidence Intervals – Ishikawa Diagram – FMEA For more information, call 416.216.1067 – Multivari, Box Plots – Analysis of Variance (ANOVA) Improve – Design of Experiments (DOE) – Regression Analysis Control – Statistical Process Control (SPC) – Control Plan 17
  18. 18. Who Participates? CEO, Director Directors Managers Company-wide 20 to 50% 10 to 20% 1 to 3% 1 out of 10 BB Executive Champion Owner White Belt Yellow Belt Green Belt Black Belt Master BB 8 hrs. 40 hrs. 40 hrs. 120 hrs. 240 hrs. ✔ ✔ Lean Management 8 hrs. Training Drives LSS as a strategy ✔ ✔ ✔ Ensures resources ✔ ✔ ✔ Approves projects ✔ ✔ ✔ Guides improvement teams Provides resources and eliminates barriers ✔ ✔ ✔ ✔ Identifies and selects projects Understands the philosophy and principles ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Proposes improvement ideas Proposes and participate in improvements ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Masters basic tools ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Masters lean tools Masters Six Sigma tools ✔ Masters LSS specialties LSS works because everybody participates! For more information, call 416.216.1067 18
  19. 19. Lean Company System 1. System/Process Design 2. Definition of Indicators Improvement cycles 3.Implementation of System/Process 4.Measurement of Performance 6. Corrective and Preventive Actions Lean Company (Improvement cycles + benchmarking + best in its class) Competent (Improvement cycles + benchmarking) Adaptation cycles Reliable 7. Improve and Innovate Opportunities 5. Analysis of Performance (In control, improvement cycles) Development (Adaptation cycles) PLAN DO CHECK ACT Comparison to Best Practices Start (Benchmarking) (Design and implementation) For more information, call 416.216.1067 19
  20. 20. Design • Design Methodology • Prototypes • Introduction to Manufacturing • Validation For more information, call 416.216.1067 20
  21. 21. Commercial • Marketing  – Surveys – Strategy Development – Campaign Development Sales ◦ Customer Management ◦ Lean Sales Process ◦ Demand Driven Sales – Price Definition For more information, call 416.216.1067 21
  22. 22. Logistics • Planning • Warehouse – – – – – Resource Planning – Scheduling Warehouse Design Receiving Materials Materials Management Inventory Counts • Shipping – Shipping Preparation – Transport Coordination • Purchasing – Negotiation – Cost Analysis – Pull System For more information, call 416.216.1067 22
  23. 23. Manufacturing/Service • Layout Design • Material Flow • Work Sequence & Balancing • Continuous Flow • Quick Preparations • Equipment Maintenance For more information, call 416.216.1067 23
  24. 24. Accounting • Management accounting – Strategy Management – Budget – Product Profit • Operational accounting – Cost Accounting – Payroll – Inventory – Value Stream Analysis • Financial accounting – Invoicing – Accounts Payable – Accounts Receivable – Credit – Financial Statements For more information, call 416.216.1067 24
  25. 25. Quality • Lean quality system – Lean Documentation – Quality Deployment – Quality Plan – Quality at the Source – Supplier Certification For more information, call 416.216.1067 25
  26. 26. Implementation 3 to 6 weeks 4 to 6 months Preparation Pilot • Diagnostic • Hoshin Kanri Strategies Box score • Implementation Plan • Promotion of LSS • Define Product/Service Families • Lean Management Training •Training • WB, YB, GB, BB • Lean Accounting • Talent Development • Value Stream Mapping • Analysis of Opportunities • Kaizen Events • Value Office • Work Cells • TPM • Andon & 5S • SMED • Kanban • Standardized Work • Poka Yoke • Sigma Kaizen Events 2 to 5 years Deployment • Organizational Structure Value Streams • Application to Every Process • Mature Lean Accounting • Lean Design • Lean Office • Lean Logistics • Lean Service • Lean Quality • Culture Change Knowledge Habits Attitude For more information, call 416.216.1067 26
  27. 27. Insurance company • Initial situation in car insurance – 14 – 17 days to pay total loss – Delivery time 40 – 45 days – High internal cost per transaction • Main actions – Lean Service training – Value stream map – Service cell (capture, valuation, legal, payment) • Results – 24 hours payment for total loss – Decrease of 75% cost per transaction For more information, call 416.216.1067
  28. 28. Painting Machines • Initial situation – Delivery time 3 weeks + shipping – Sales only cover expenses (no profit) – High Inventory – No Available Capacity • Main actions – Re-Layout – Manufacturing Cells – Complete Training System • Results – Delivery time 2 to 3 days + shipping – Cost reduction 40% (consistent) – Sales increase 20% average – Inventory reduction 55% For more information, call 416.216.1067 28
  29. 29. Logistic (Pharmaceutical) • Initial situation – Variable Demand – High Inventory Levels – Constant Back Orders • Main actions – Delivery Time Reduction (quick set up, cells, tpm) – Kanban System Implementation in the Value Stream • Results • Total Inventory Reduction from 120 days to 15 days • Cost Reduction for more than $50 million dollars • Zero Back Orders For more information, call 416.216.1067 29
  30. 30. Supply Chain Without LSS Supplier Average Lead Time Std. Dev. Factory 1353 4.5 1091 Distributor 668 4.06 397 477 3.5 158 4000 140 0 120 0 100 0 201 25 700 3000 395 3.2 69 800 3500 Customer Retailer 600 300 500 250 400 200 400 300 150 300 200 100 100 50 600 500 2500 800 2000 600 1500 1000 400 500 200 200 0 1 Variation Inventory (days) 3 5 7 9 11 81% 13 15 17 19 100 0 21 1 129234 95 3 5 7 9 11 59% 13 15 17 19 0 0 21 1 14567 22 3 5 7 9 11 33% 13 15 17 19 0 1 21 11092 23 3 5 7 9 11 13 15 17 19 21 17% For more information, call 416.216.1067 1 4874 12 3 5 7 9 11 13 15 17 19 21 12% 30
  31. 31. Supply Chain With LSS Supplier Factory Distributor Customer Retailer Average 228 220 216 203 201 Lead Time Std. Dev. 4.5 63 1.86 57 0.8 64 0.5 27 25 500 500 200 100 100 0 100 300 200 200 400 300 300 500 400 400 0 0 1 4 7 10 13 16 19 Variation Inventory days Kanban Days 28% 1 129234 567 4 1 7 10 13 16 19 26% 1310 6.0 14567 66 515 2.4 Upstream 300 300 250 200 150 100 50 0 4 7 10 13 16 19 29% 250 200 150 100 50 0 1 4 7 10 13 16 19 11092 51 13% 224 1.1 1 4 7 10 13 16 19 4874 24 12% 115 0.6 Downstream For more information, call 416.216.1067 31
  32. 32. Why Some Can and Other’s Can’t + Skills + Incentives + Resources + Plans = Changes + Vision Skills + Incentives + Resources + Plans = Confussion + Incentives + Resources + Plans = Anxiety + Resources + Plans = Slow Change + Plans = Frustration = False Starts Vision + Vision + Skills + Vision + Skills + Incentives + Vision + Skills + Incentives + Resources + For more information, call 416.216.1067 32
  33. 33. QUESTIONS? For more information, call 416.216.1067 33
  34. 34. Upcoming Webinar Register @ drake-webinars.com March 19, 12pm EDT How to Improve Your Safety Training Through Online Delivery Presented by: Dan Hannan, Corporate Health and Safety Director of Merjent, Inc. and Mitch Diamond, President of Exponential-Impact, a Drake International company For more information, call 416.216.1067 34
  35. 35. Free Offer We’re offering a free 30-minute Consultation about increasing your organization’s effectiveness through Lean Six Sigma. Contact Maysa to take advantage of this exclusive offer! mhawwash@na.drakeintl.com 416.216.1067 For more information, call 416.216.1067 35
  36. 36. Thank You for Attending For Questions please contact Maysa Hawwash mhawwash@na.drakeintl.com 416-216-1067
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