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Improve performance through Lean - Six Sigma management

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First steps for improving the performance of companies using Lean Six Sigma methodology, starting with manufacturing and supply chain departments (partial presentation).

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Improve performance through Lean - Six Sigma management

  1. 1. Improving the organization's performance by using Lean Six Sigma methodology Rodica Ghinea July 2013
  2. 2. when talking about Performance = evaluating the financial performance July 2013 Performance = a comprehensive approach including both financial and non-financial aspects In the late 1950’s currentlycurrently
  3. 3. LEAN Lean Manufacturing = Toyota Production System(TPS) improving the processes by eliminating waste Six Sigma Six Sigma- Motorola set of tools and strategies for improving the quality LEAN- Six Sigma a combination of the two methodologies for improving the performance of a process / company through systematic application of tools, strategies and politics for continuous improvement + + July 2013
  4. 4. To build a company's Development Plan started with the company processes To determine the structure of the business (product distribution) July 2013 In order
  5. 5. For that: Know the business July 2013 Analyze current processes in Supply Chain Analyze current processes in manufacturing Build the actual VSM Build the future VSM Improve services
  6. 6. And that means: I. Build VSM II. Establish the activities that bring add value Kanban building map value Remove waste III. Through the stock management Usework standard SupplyChain July 2013
  7. 7. Made an analysis of business structure A = high runner = 73 products bring 80 % turnover B = repeater = 130 products bring 19% of turnover C= stranger = 66 products bring 2 % of turnover Tool used: Paretto Diagram July 2013 0 20 40 60 80 100 120 140 A B C 73 130 66 number products 1761066 RON 7511953 RON 76581 RON
  8. 8. Which helped to make the decisions: July 2013 Automatizations Lean Cells Customized products For A products (high runners) For B products (repeaters) For C products ( strangers)
  9. 9. I. Build VSM July 2013 Performance before implementation: 7 activities; OFR = 90%; MTPT = 140 days; OEE = 65% LT = 25 days Efficiency = 65% Tact time = 5.7 sec
  10. 10. Based on data collected has been built the future status for VSM July 2013 FUTURE STATUS
  11. 11. After implementation of the new VSM expect to: July 2013 reduce the number of the activities to 4; with an OFR = 95%; and rotate the material stock at each 100 days (MTPT = 100 days); with a rate of using the equipments of 85 % ( OEE) and delivering the A products in 5 days (LT = 5 days)
  12. 12. To obtain this performance needs to implement the VSM- action plan July 2013 Action Product type responsible data Implement the cells layout B HS mar.13 Kanban implementation inter- operational A, B VA dec.13 Implementation Kanban finish product A, B DC ian.14 Implementation Kanban- secondary operations A, B SN sep.13 Implement work standard for each product family A, B BB nov.13 Design and implement Kanban for primary parts A, B CB mar.14 Standardise the box for parts A, B GH aug.13 Implement a conveyor between packaging and verification B GI may.14
  13. 13. “U” CELL July 2013 price New layout 300 euro/pcs
  14. 14. II. Status of waste (MUDA) July 2013 Work time: 8 h Production time : 2.75 h Defects or purchasing activities : 4.25 hmanufacturing defects purchasing waste distribution (hour) waste waste adding value 2,75 1,25 3 About 70% of work time is lost.
  15. 15. To increase the value added need to be implemented the following activities: July 2013 Activity Price Responsible status Design and implement a new assemble table 600 eur BU Manager  Implement standard work 0 Engineer  Kanban implementation 0 Engineer 
  16. 16. July 2013 75 150 131 Productivity after implementation manufacturing through Kanban implementation through work standard After implementation the productivy will increase as:
  17. 17. July 2013 1. Increase productivity 2. OFR = 92% 3. OEE = 85% 4. Decrease stock by 20% 5. Increase workplace ergonomics 6. Released a surface of 300 square meters 152 240 300 0 50 100 150 200 250 300 350 before implementation work standard after 1 month after 6 monts Evolution productivity Series1 Linear (Series1) After implementation :
  18. 18. Red- crises situation- not enough time to bring in time ! Yellow - warning signal- a good moment for ordering Green – enough parts for production Code of colour: July 2013 Kanban: Card that contains all identifiers landmark for an article/ sub- assembly / finished product, such as: code, quantity, position, destination provider. III. Kanban delay in deliveries
  19. 19. Model: Design Kanban July 2013 III. Kanban monthly consumption min max box type A box type B box type C anti-drill plate 13206 4052 10129 10 2.5" SH cap 3VL 1935 484 1209 2 2.5" SH cap5VL 7163 1791 4477 4 2.5" SH cap 5BA 659 165 412 1 2.5" SH cap 5E 863 216 539 1 2.5" SH cap 5OV 3046 762 1904 4 3" SH cap 3VL 1935 484 1209 2 3" SH cap 5VL 3112 778 1945 4 3" SH cap 5BA 659 165 412 1 3" SH cap 5E 863 216 539 1 3" SH cap 5OV 762 762 1904 4 4
  20. 20. III. Supply Chain To understand the situation, it has used another tool- the Ishikawa Diagram: Iulie 2013
  21. 21. July 2013 III. Supply Chain 22.7 55.3 17.3 44.7 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% hours % Supply Chain structure MUDA value added The activities developed into the Supply Chain Department have been analysed. Around 44.7% of weekly work time it is lost.
  22. 22. July 2013 III. Supply Chain To improve the performance of department has been established an action plan to improve purchasing services Action A P C D A P C D A P C D A P C D A P C D A P C D A P C D A P C D implemen tthe matrix communication with clients and / or suppliers establish responsible for purchasing on group materials make decision buy/not buy in max 48 h build a new and simplified map of processes for supply chain Status group documents by category standard implementation for organizing shelves processing orders based on FIFO principle implementing standardized document for purchasing indirect materials and for services
  23. 23. July 2013 3114 1118 3135 1113 998 12117 2118 5086 1126 88 4543 1737 3024 30 8 635 985 0 0 0 5000 10000 15000 20000 < 3 months (3:6]months (6:12]months (12:24]months > 24 months (*1000)RON Stock Distribution merch. selling raw mat. indirect materials components packaging Has developed an analysis to understand the distribution of stock:
  24. 24. July 2013 1. Implement an working standard for procurement process 2. Introduce the order into the ERP operating system-max 48h 3. appointment responsible for articles category purchasing 4. Construction ERP interface easily accessible without risk Strategic actions: 1. Reduce the variant of type packaging 2. Implementing Kanban to the supplier for components and raw materials 3. identifying new suppliers in Romania / Europe Based on the analysis has been established the action plan
  25. 25. Results after implementation July 2013 5048.8 882.6 2119 0 0 1892.8 723.8 1260 0 30.0 2500.0 5000.0 7500.0 (x1000)RON stock trend after implementation merch. selling raw mat. indirect materials components packaging 0 5000 10000 15000 20000 25000 Stock trend after implementation before after
  26. 26. Conclusions July 2013 KPI before trend after OFR (%) 90 95 MTPT (days) 140 100 OEE (%) 65 95 Stoc (%) 45 15 LT (days) 25 5 Performance Company Make a plan and schedule Implement Check the results Take new actions
  27. 27. For: - questions - helping to save your company - helping to develop your company/department - guidance for developing performance project write to me on : ghinearodica@yahoo.com July 2013 Some slides were removed from the initial presentation.
  28. 28. Thank You! July 2013

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