Cutting costs, improving quality, & speeding delivery through continous improvement

1. LEAN THINKING with Six Sigma Cutting Costs, Improving Quality, & Speeding Delivery By Continuous Process Improvement Prepared By: Kurt E. Robertson Organization Consulting Department Saudi Aramco 874-6204

2. The Robertson Guarantee IF YOU KEEP ON DOING WHAT YOU HAVE ALWAYS DONE YOU WILL KEEP ON GETTING WHAT YOU'VE ALWAYS GOT. I PROMISE LEAN THINKING with SIX SIGMA

3. PRESENTATION OBJECTIVE To Provide a brief overview of Lean & Six Sigma. Things you should know about Lean: Lean and Six Sigma can be successfully applied in both operations and service environments Automation shouldn't be the first answer Both Lean and Six Sigma are data driven Lean is Team-based Lean takes a Systems Approach Lean is a: physical transformation to your processes LEAN THINKING with SIX SIGMA transformation of your organization cultural

4. LEAN IS ABOUT PEOPLE EMPOWERMENT Empowerment does not mean total freedom; it is the ability to make choices within boundaries. It is focused freedom. A shared vision of what we want to create provides the focus and direction that ensures that empowerment does not lead to chaos. Center for Study of Work Teams Harley Davidson Company LEAN THINKING with SIX SIGMA

5. Lean compared to Six Sigma Lean and 6 å are like the Democrats and the Republicans in the U.S. Congress - they both think they are right, and that you are wrong if you don't agree with them - very few from one side ever change sides - some of their methods and decisions are sub-optimal - but each adds balance to the process when applied reasonably and knowledgeably Lean focuses on: - reducing the 8 Wastes - Improving process flow - Increasing process speed Lean cannot always bring a process under statistical control Six Sigma helps: - reduce process variation (one of the 8 wastes) - reduce defects Six Sigma alone cannot dramatically optimize process flow and reduce wastes Because of their complementary natures , each brings to the improvement process something the other does not, and the fusion of Lean and 6 å is rapidly gaining popularity. LEAN THINKING with SIX SIGMA DO LEAN FIRST before SIX SIGMA 99% of the time

6. Complementary Tools 6 Sigma OVERALL YIELD vs SIGMA (Distribution Shifted ñ1.5 å ) # of Steps 1 93.32% 99.379% 99.9767% 99.99966% 7 61.63 95.733 99.839 99.9976 ion 10 50.08 93.96 99.768 99.9966 20 25.08 88.29 99.536 99.9932 40 60 6.29 1.58 77.94 68.81 riat 99.074 98.614 99.9864 99.9796 80 0.40 60.75 sv a 98.156 99.9728 L les 100 0.10 53.64 97.70 99.966 150 --- 39.38 96.61 99.949 ps - 200 --- 28.77 95.45 99.932 E 300 --- 15.43 93.26 99.898 rs te 400 --- 8.28 91.11 99.864 500 --- 4.44 89.02 99.830 A 600 700 --- --- we 2.38 1.28 86.97 84.97 99.796 99.762 N 800 --- fe 0.69 83.02 99.729 s te- 900 --- 0.37 81.11 99.695 1000 --- 0.20 79.24 99.661 wa 1200 --- 0.06 75.88 99.593 3000 --- --- 50.15 98.985 17000 s --- --- 1.91 94.384 Les 38000 70000 --- --- 0.01 87.880 78.820 150000 60.000 Source: SIX SIGMA RESEARCH INSTITUTE Motorola University Motorola, Inc. LEAN THINKING with SIX SIGMA

7. Combining Lean and Six Sigma Lean reduces cost, improves quality, and speeds delivery by eliminating non-value added activity in a process by identifying and eliminating waste . Six Sigma is a more data-driven approach which aims to reduce cost, improve quality, and speed delivery by process variability and defects using the five-step DMAIC reducing model. 6 å depends heavily on data mining and data integrity. Lean Six Sigma: Any combination should maintain the integrity of each discipline while combining the benefits of each. Attempting to make one look like a part of the other Sub-optimizes both . Problem complexity often determines which to use. Don't use a hammer to crack a peanut shell . LEAN THINKING with SIX SIGMA

8. When to use Lean or Six Sigma Lean is an AXE . Use Lean if: This is the first and or second pass at identifying and eliminating waste Process problems include: flow operator cycle time product lead time delivery time quality costs You need rapid improvement You need a mile-wide, inch-deep approach Six Sigma is a SCALPEL . Use Six Sigma if: Lean has made a first pass with improvement Defects and variation still persist and you need refined data analysis with an inch-wide, mile-deep approach Lean is not about tinkering withSIX SIGMA existing processes. LEAN THINKING with your

9. Harvesting the Fruit of Lean Six Sigma Difficult-to-Reach Fruit Production Preparation Process (PPP) Design for Six Sigma (DFSS ) Middle Fruit Six Sigma tools ---------------------------------- Low-Hanging Fruit Degree Lean tools of ---------------------------------- Complexity Ground Fruit Logic and Intuition LEAN THINKING with SIX SIGMA

10. Let's Talk Lean First Do Lean First in most cases And you should LEAN THINKING with SIX SIGMA

11. AGENDA History Definition Goal Process Value Stream Mapping Kaizen Becoming Lean Lean and Quality Metrics Why Lean Fails Six Sigma Resistance Six Sigma Your Responsibility How it ends LEAN THINKING with SIX SIGMA Resources

12. Lean History 15 th Century 1905 1945-1973 1973 1974-2005 1973-2005 The Republic "Today and The Toyota Oil Embargo Books about : Boeing of Venice Tomorrow" Production JIT Danaher by System Cellular Manufacturing U.S. Navy Henry Ford Visual Factory U.S. Air Force Agile Manufacturing Airbus W. Edwards Flexible Manufacturing Dell Computer Deming Synchronous Mfg Maytag Pull Production Whirlpool Rapid Continuous McDonald's Improvement Microsoft Kaizen Group Technology And most companies that have tried MIT Theory of Constraints "The Machine That and Six Sigma Changed the World" "Lean Thinking" LEAN SIX SIGMA by James Womack Time LEAN THINKING with SIX SIGMA

13. AGENDA History Definition Goal Process Value Stream Mapping Kaizen Becoming Lean Lean and Quality Metrics Why Lean Fails Resistance Your Responsibility How it ends Resources LEAN THINKING with SIX SIGMA

14. LEAN Is based on the Toyota Production System Is the Identification and Elimination of WASTE in the Process Got its name from MIT and James Womack's research team Is process simplification , and the relentless removal of waste from all processes Improves Quality, Cost, Delivery, Safety, Morale ( QCDSM ) Increases process capacity Reduces defects Results in a stable,THINKING with SIXrepeatable, predictable LEAN reliable, SIGMA process

15. General Rules 1. Lean is about fixing the SYSTEM and transforming the CULTURE (CM). 2. Lean is about FLOW. 3. Lean is about people , not just about improvement tools. 4. Lean is about YOUR expectations and about what YOU are willing to tolerate in terms of Q uality, C ost, D elivery, S afety, and M orale (QCDSM) . 5. Processes rarely get better on their own. 6. Successful processes have rules , standards , & absolutes . 7. To solve a problem you have to admit you have one. 8. Problems need to be quantitatively defined and their corrective action quantitatively tracked. System) . (Measurement 9. Every project needs a Value Stream Champion. LEAN THINKING with SIX SIGMA

16. The System Planning Material Supply Operations Sales and Marketing Value Stream Value Stream LEAN THINKING with SIX SIGMA

17. WASTE Waste is any activity that: 1. The customer isn't willing to pay for. 2. Doesn't positively change the form, fit, or function of the product or service (Value Added)

18. If it prevents the FLOW of product or information.. LEAN THINKING with SIX SIGMA

19. Lean Focus - The 8 Wastes Lean focuses on identifying and eliminating the 8 hidden wastes common to both manufacturing and service industries: 1. OVER-PROCESSING: Adding more value to a service or product than customers want or will pay for. A 15 page report when 1 page would do. Design Engineer enhancing or modifying customer specifications. PROCESS COMPLEXITY 2. MOTION: Needless movement of people (hunting, searching, gathering things). 3. TRANSPORTATION: Unnecessary movement of materials. 4. EXCESS INVENTORY: Work-In-Process (WIP) or raw material (RM) that is in excess of what is required to produce Just-In-Time (JIT) for the customer. 5. WAITING: Any delay between when one process step/activity ends and the next step/activity begins. 6. DEFECTS: Any aspect of the product or service that does not conform to customer needs. (SIX SIGMA) Variation = defects 7. OVER-PRODUCTION: Production of service outputs or products beyond what is needed for immediate use. 8. UNUSED EMPLOYEE CREATIVITY: Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees. -- The Toyota Production System LEAN THINKING with SIX SIGMA

20. The 9 th Waste - HASTE - American (or Western adage): "Haste makes waste." "If you don't have time to do it right, when will you have time to do it over?" -- J. Raymond Robertson LEAN THINKING with SIX SIGMA

21. Understanding FLOW LEAN THINKING with SIX SIGMA

22. Why Lean? Business as Usual CUSTOMER Waste PRODUCT ORDER BUILT & SHIPPED Lead-time Lean Process CUSTOMER PRODUCT ORDER BUILT & SHIPPED Waste Lead-time (Shorter) LEAN THINKING with SIX SIGMA

23. Why Lean? Typical Value Stream Ratio of Value-Added to Non-Value-Added Activity 3% 97% NVA VA Where's Most Process Improvement the Real Teams Attack this . . . Opportunity? 97% NVA . . . Achieve this . . . . . . and Ignore this Source: C. Fiore; Lean Strategies for Product Development , ASQ, 2003 LEAN THINKING with SIX SIGMA

24. Excess Inventory Our corporate body guard against bad processes A $ea of RM & WIP Reduce the inventory and see the wa$te ! LEAN THINKING with SIX SIGMA You can `t be Lean unless your suppliers are Lean.

25. Who Is Lean?? Fire Fighters Hospital Emergency Rooms Lifeguards Boeing (Leaner) Where lives are at risk, you will probably find Lean processes. What about the rest of us?? LEAN THINKING with SIX SIGMA

26. Typical Causes of Waste 1. Layout (distance) 2. Long set-up time 3. Poor work methods 4. Lack of training 5. Functional organizations 6. Technology Gaps 7. Little understanding of the entire process 8. Historic supervisory roles 9. Irrelevant performance measures 10. Lack of workplace organization 11. Supplier quality/reliability 12. Poor communication 13. Avoidable interruptions 14. Complexity LEAN THINKING with SIX SIGMA 15. More.

27. Non-Value-Adding Activities (Operations) "Non-value-adding" activity (NVA) consumes time and money...but does not change the value of an item. 1. SORTING 2. COUNTING 3. STACKING 4. EXPEDITING 5. TRANSFERRING 6. CHECKING 7. TRANSPORTING 8. HUNTING, SEARCHING, GATHERING LEAN THINKING with SIX SIGMA

28. Non-value-adding (NVA) (office) Examples 1. CHECKING 2. SIGNATURES 3. ASKING 4. APPROVING 5. REVIEWING 6. MONITORING 7. REWORK 8. TRANSPORTING 9. DOUBLE HANDLING 10.HUNTING, SEARCHING, GATHERING LEAN THINKING with SIX SIGMA

29. The Goal of Lean Improved product Q uality, C ost, D elivery; Improved employee S afety and M orale ( Q C D S M) in any operational or service process. 1. By establishing (one-piece) Flow Based in Takt Time In a Pull environment (JIT) 2. But first I need processes that are: Stable Reliable Predictable Repeatable 3. I get those processes by establishing: Awareness - at all levels of the organization 5S - Workplace organization Value Stream Mapping - information and material flow Flow - improve plant or office layout Leveled Production - reduce lot sizes, setup time, lead times, LEAN THINKING with SIX SIGMA inventory

30. Lean Kaizen Sequence Processes can be transformed Distribution in days, weeks or months, System Kaizen One-piece flow but plan 1- 6 years Pull/Kanban Takt time for the corporate Equipment Kaizen (TPM) transformation 3P, Autonomation Leveled Production Line Balancing Reduce: lot sizes, setup times, lead times, operator cycle times, inventory AWA FLOW: AIWs (Gemba Kaizen) REN Factory Layout Kaizen Standard Work: Operator Methods ESS process simplification, quality and maintenance - 5S - Organize the workplace LEAN THINKING with SIX SIGMA

31. The Lean Toolbox 1. Value Stream Maps 17. SIX SIGMA 2. Rapid Improvement (Kaizen) 18. Chaku-Chaku / Load-Load Events 19. Heijunka / Load Leveling 3. Education 20. Bottlenecks 4. Employee Involvement 21. Point-of-Use Delivery 5. Metrics and Alignment 22. DFMA 6. Flow Cells 23. Control Charting 7. Standard Work 24. Pareto Analysis - Capacity Analysis 25. Histograms - Takt Time / Cycle Time 26. Root Cause Analysis Standard Ops Worksheet 27. 5 Why's - Production Control Board 28. Hypothesis Testing 8. 5S / Visual Controls 29. Supply Chain Management 9. Pull/Kanban Systems 30. Critical Chain Project 10. Brainstorming Management 11. Prioritization 31. 7 Quality Control Tools 12. Spaghetti Chart 32. 7 Management & Planning 13. Poka-Yoke / Mistake Proofing Tools 14. Set-up Reduction 33. Nominal Group Technique 15. Total Productive Maintenance with SIX 34. Production Process LEAN THINKING SIGMA 16. Change Management Preparation (3P)

32. How Do I Know Which Tool To Use? How do you know whether to use Microsoft: - Excel - PowerPoint - Word - Access - Project - Visio Excel is probably not the best choice for word processing. Word is probably not the best choice for calculations. **The KNOWLEDGEABLE, EXPERIENCED use of a tool is the key to the SUCCESSFUL use of a tool** LEAN THINKING with SIX SIGMA

33. AGENDA History Definition Goal Process Value Stream Mapping Kaizen Becoming Lean Lean and Quality Metrics Why Lean Fails Resistance Six Sigma Your Responsibility How it ends Resources LEAN THINKING with SIX SIGMA

34. Team Charter Dates: VSM Impact RIE Senior Management Sponsor: Project Value Stream Champion: Just Do It Difficulty Project Description: Team Leaders and Members: Potential Implementation Costs: Business Reason for the Project: Project Constraints (Financial, Personnel, Equipment): Expected ROI: LEAN THINKING with SIX SIGMA

35. Definition of a Value Stream The VALUE STREAM is the entire set of processes or activities designed to transform the products and services into what is required by the customer. The VALUE STREAM Suppliers Design Procure Make Sell Customers A Primary Focus is TIME, Product and / or Service Flow Information Flow: Quickly SIGMA Directions In All

36. Define the Boundaries start stop What keeps you awake at night? suppliers inputs Value stream outputs customers Where are the stakes in the ground that define your Value Stream boundaries? - We'll focus our efforts between them! LEAN THINKING with SIX SIGMA

37. Value $tream Map - Finding the WA$TE Production Control 90/60/30 day 6 week forecasts SUPPLIER forecast CUSTOMER MRP Daily Weekly Order 500 ft coils Fax 18400 pieces/month Daily Ship -12000- L Weekly Schedule Schedule - 6400- R Tues. & Tray = 20 pieces Thurs. 2 shifts Ass'y Ass'y Stampin S. Weld S. Weld #1 #2 Shipping g #1 #2 I I I I I I 1 1 1 1 1 Staging Coils 4600 L 1100 L 1600 L 1200 L 2700 L 5 days 2400 R 600R 850R 640R 1440R C/T=1 sec C/T=39 sec C/T=46 sec C/T=62 sec C/T=40 sec C/O=1 hour C/O=10 m C/O=10 m C/O = 0 C/O = 0 .0014% VA Uptime = Uptime = Uptime = Uptime = Uptime = 85% 100% 80% 100% 100% 27,600 *2 27,600 *2 27,600 *2 27,600 *2 27,600 *2 sec. avail. sec. avail. sec. avail. sec. avail. sec. avail. 5 days 7.6d 1.8d 2.7d 2d 4.5d PLT = 23.6 days 1 sec 39 sec 46 sec 62 sec 40 sec Process Time (VAT) = 188 sec. LEAN THINKING with SIX SIGMA

38. Current State Value Stream Map Current State - March '02 AREA: Harrier Maintenance Flight (500 Hour Minor) BUSINESS CASE: VALUE STATEMENT: KEY REQUIREMENTS: MEASUREMENTS: IDEAL STATE: Improve Harrier Maintenance Flight Identify, remove and repair failed, broken, or Core Manpower Requirements Productivity (hours per unit) ON DEMAND Operating Performance obsolete parts for Harrier W eapon Platform, Operational Risk Throughput Time DEFECT FREE functional test, and reapply finish Quality and Flight Safety On Time Delivery 1 BY 1 Cost of other Platforms Floor Space LOW EST COST LEAN THINKING with SIX SIGMA Future State Implementation Pan

39. Current State Map Total time: 156 hrs waiting time: 148 hrs Value added time: 8 hrs (5%) No. of steps: 63 Defect rate: 10% Backlog: 2 weeks LEAN THINKING with SIX SIGMA Distance traveled: 1.2 km

40. Spaghetti Charts Communication and Motion LEAN THINKING with SIX SIGMA

41. IN CHARGE OF FOLLOWUP: Project Name Status of overall completion = % 28 Plan Dates ACTION Who Comments %Status Start Finish PROJECT SUMMARY: In charge C COMPL of Action Department this BEGIN ET E Comments 40 item ASD / 7/3/200 7/10/200 AAD to AJD:Follow-up this action item and 1 100 MZU 7 7 report completion AJD / AAD to AJD: Make sure this is done ASD 7/3/200 8/10/200 2 MAS: You can decide where the 5 / 7 7 location of the hotline be. MZU ASD / 7/3/200 8/10/200 3 100 MZU 7 7 LEAN THINKING with SIX SIGMA

42. LEAN AGENDA History Definition Goal Process Value Stream Mapping Kaizen Becoming Lean Lean and Quality Metrics Why Lean Fails Resistance Six Sigma Your Responsibility How it ends Resources LEAN THINKING with SIX SIGMA

43. Kaizen = continuous improvement RAPID IMPROVEMENT At the end of the week, a new process should be in place. Anything else is not rapid improvement. It's a "STUDY". LEAN THINKING with SIX SIGMA

44. Team Charter Dates: VSM Impact RIE Senior Management Sponsor: Project Value Stream Champion: Just Do It Difficulty Project Description: Team Leaders and Members: Potential Implementation Costs: Business Reason for the Project: Project Constraints (Financial, Personnel, Equipment): Expected ROI: LEAN THINKING with SIX SIGMA

45. Rapid Improvement Events (RIE) Action oriented - "leaned" process in place and functioning by close of event - creativity before capital Learning by doing Transform the Value Stream Structure - 3-5 days in length - 3-5 teams cross-functional teams - 6-8 people per team - Seven week improvement cycle 3 weeks preparation 1 week execution 3 weeks follow-up LEAN THINKING with SIX SIGMA

46. RIE Preparation Checklist Rapid Improvement Events By: Date: Prep. % COT: PREPARATION Team: 3rd Week Before Event: (% COT: ) 2nd Week Before Event: (% COT: ) 1st Week Before Event: (% COT: ) 1) Identify the suppliers and inputs 1) Communicate key metrics, targets, and 1) Select the Value Stream from the 2) Identify the customers and outputs tools to be applied to all team participants Enterprise 3) Identify the start / stop boundaries 2) Train team participants on improvement Transformation Plan. 4) Gather facts and data to populate starting process and tools to be applied 2) Select the target area from Value Stream numbers on Target Progress Report 3) Identify what "triggers" work Analysis. 5) Populate the Target Progress Report 4) Double check availability of all resources: 3) Determine the focus - which Lean tools 6) Identify top three improvement metrics - equipment or furniture moves will be applied? 7) Establish improvement targets on top three - computer or phone moves 4) Identify the Team Leader, Co-Leader, and metrics, be aggressive - 5S, shadowing, kitting Team Members. 8) Meet with affected stakeholders to - Production Control Boards 5) Assure at least 1/3rd of participants are communicate Improvement Event schedule, 5) Communicate with affected area, review from the affected area. metrics, targets, and tools to be applied items listed on flip chart and ask for 6) Clear participants calendars for the 9) Set a flip chart up in affected area, ask clarification, make sure these are added to Improvement Event Week. stakeholders to put ideas for improvement Improvement Newspaper 7) Complete the Team Roster. on flip chart. Start Improvement Newspaper. 6) Make sure team break-out area is ready: 10) Capture flow stopper information from - flip charts, markers, post-its, VSA blanks Production Control Boards - forms, stop watches 11) Confirm the availability of any special 7) Make sure Process Champion is set resources for: to give opening remarks on Monday - equipment or furniture moves morning - computer / phone moves 8) Make sure Process Champion is available - 5S, shadowing, kitting for Team Leader Meetings Monday - - Production Control Boards Wednesday 12) Obtain any special data collection 9) Schedule Final Presentation with Process instructions from your Coach such as: Champion and appropriate leadership - Information from previous Improvement 10) Plan working lunches Events 11)Confirm all team participants are going to - Customer critical to quality issues be available full time for entire event - Safety data 12) Confirm Target Progress Report and 13) Confirm all participants are still available Team Roster are complete for entire Event week LEAN THINKING with SIX SIGMA

47. RIE Daily Checklist Rapid Improvement Events TEAM DAILY CHECKLIST Day One. Day Two. Day Three. Day Four. 1. Review team goals and objectives, create Day 1 plan. 1. Identify wastes to attack. 1. Train Stakeholders on new cell layout and standard 1. Train Stakeholders on new cell layout and work. standard work 2. Meet with Cell Stakeholders and review goals. 2. After TAKT time/Cycle time bar charts. (loading diagram) 2. Assign a team member to each Stakeholder. 2. Assign a team member to each Stakeholder. 3. Before Data, Documentation and "Tools" TAKT Time Calculation 3. Create plan for new cell layout. 3. Run new cell. 3. Run new cell. Before Time Observations Before Cycle Time Bar Charts (Loading Diagrams) 4. Meet with Stakeholders, review progress and plans 4. Fix problems immediately. 4. Create/post Key Point, Work Combination Sheets, Before Standard Work Sheet/Cell Layout solicit ideas and concerns. Standard Work Sheet, Production Control Board, Before WIP Count ($ and pieces) 5. Create production control board. and Kaizen Newspaper. Before 6S Audit 5. After standard work combination sheets. Before Safety Audit 6. Work on 6-S and safety issues. 5. Fix problems immediately. Before Work Combination Sheets (one per operator) 6. Notify support groups by 2.00 PM of required support. 7. Create/post Key Point, Work Combination Sheets, 6. After 6-S and safety audits. 4. Take a "Waste Walk", to further identify opportunities. Standard Work Sheet, Production Control Board, 7. Daily recap. and Kaizen Newspaper. 7. Off shop floor by 1:00. 5. Daily recap. 8. Create daily plan for Wednesday. 8. Daily recap. 8. After area pictures and Team picture. 6. Meet with Stakeholders and review progress.ideas. 9. Team Leader/Co Leader. How late do we stay? 9. Create daily plan for Thursday. 9. Prepare final presentation. 7. Create daily plan for Tuesday. 10. Daily Team Leader meeting. 10. Team Leader/Co Leader. How late do we stay? 10. Complete Team/Event binder. 8. Team Leader/Co-Leader. How late do we stay? 11. 6-S meeting area. 11. Daily Team Leader meeting. 11. 6-S meeting area. 9. Daily Team Leader meeting. 12. Implement plan/create cell. 12. 6-S meeting area. 12. Inventory kit boxes and find missing articles. 10. 6-S meeting area. ** Team Leaders need to assign action items ** Team Leaders need to assign action items ** Team Leaders need to assign action items ** Team Leaders need to assign action items to specific people on the teams and require to specific people on the teams and require to specific people on the teams and require to specific people on the teams and require with SIXup reports on progress at a minimum follow increments. follow up reports on progress at a minimum of two hour increments. follow up reports on LEAN progress at a minimum of two hour increments. of two hour SIGMA follow up reports on progress at a minimum of two hour increments. THINKING

49. The 5S Principles: Proper arrangement and orderliness "Good factories (workplaces) develop beginning with the 5Ss; bad factories fall apart beginning with the 5Ss." -Hiroyuki Hirano

50. 5S Workplace Organization 1. SORT (seiri): Clearly distinguish what is necessary & what is not. Remove what does not support an organized, visual and Lean workplace. 2. SIMPLIFY (seiton): Ensure everything required to do the task has a visually designated location, is available, functional, and can easily be seen, reached and returned in the sequence used; Consider an operating room or fire engine. Mark/label locations clearly. 3. SWEEP (seiso): Keep the work area, tools and equipment - Floors, machines, desks, files, equipment - organized, organized, repaired (TPM), and visually marked. 4. STANDARDIZE (seiketsu): Maintain & improve the first 3S's. Establish procedures so storage and cleaning actions are consistently applied by everyone. 5. SUSTAIN (shitsuke): Hold the gains. Achieve the discipline/habit of following the correct procedures. From this new level of efficiency, start again. LEAN THINKING with SIX SIGMA

51. Visual Controls A Major Element of 5S Visual controls: - Answer a question before it is asked - Help spot abnormalities in the system - Examples: Medical - Moment of Truth KSA/Bahrain Causeway booth lights: - Avg and Std Dev LEAN THINKING with SIX SIGMA

52. The 5S's Low Level of 5S 1. Sort Needed from the unneeded 2. Shine Clean, scrub, and fix 3. Set in order High Level of 5S A place for everything 4. Standardize A plan to sustain 5. Sustain Following through LEAN THINKING with SIX SIGMA

53. Standard Work Board TAKT time & Delivery Performance Measure Andon Flag Cell Key Measures 6S Layout and Assignments Corrective Action Matrix and Plan Standard Work Bar Chart LEAN THINKING with SIX SIGMA

54. LEAN THINKING with SIX SIGMA

55. Shadow Hand Tools LEAN THINKING with SIX SIGMA

56. Signal Lights LEAN THINKING with SIX SIGMA

57. Visual Management Shadowing Labeling Foot-printing LEAN THINKING with SIX SIGMA Production Color Schemes Striping Control Boards

59. Visual Controls LEAN THINKING with SIX SIGMA

60. Other Visual & Audio Controls Visual and Audio controls answer questions before they are asked. 1. Clock 2. Traffic lights with a timer 3. Traffic Lines/ lights/signs 4. Sounds announcing break time 5. Call to Prayer 6. Score boards at sporting events 7. Arrival/Departure boards in airports 8. Lights indicating machine or process condition 9. Lights and siren on emergency vehicles 10. Gauges on medical & industrial equipment 11. Big teeth on a snarling lion 12. Take-a-Number systems 13. Colored caps on milk bottles LEAN THINKING with SIX SIGMA

61. Point-of-Use Strategy: 7 Elements of Surgery Information Hand Tools Instruments Power Tools 7 Elements Supplies Of Surgery Fixtures Fasteners LEAN THINKING with SIX SIGMA

62. Supermarket Pull System Kanban Kanban Supplying Customer Process product product Process Supermarket Customer Process goes to supermarket and withdraws what it needs when it needs it. Supplying Process produces to replenish what was withdrawn. Purpose: Controls production at supplying process without tying to schedule. Controls production between flows. LEAN THINKING with SIX SIGMA

63. Pull/Kanban Systems Pull On Demand - Upstream Supplier - Downstream User - Visual Trigger Sequenced - Use FIFO lanes Replenished - Create supermarkets with SIX SIGMA LEAN THINKING

64. Traditional vs Cellular Flow Dept 1 Traditional flow Cellular flow Dept 2 DONE 4 3 IN OUT OUT IN IN 1 2 Dept 3 Dept 4 Demand paced production OUT IN IN Value-adding steps in order OUT No stops, piles, or back-ups DONE Flexible Less transportation Less work-in-process LEAN THINKING with SIX SIGMA

65. U - Shaped Cell Andon RM FG LEAN THINKING with SIX SIGMA

66. Other Important Lean Tools 1. Setup Reduction 2. Standard Operations 3. Times - Operator Cycle Time - Product Lead Time - Waste Time - Takt Time (customer driven) 4. Total Productive Maintenance (TPM) 5. Production Preparation Process (PPP) 6. Bottleneck reduction 7. Mistake proofing (Poke Yoke) (Example: mobile SIM card) 8. 5 Whys 9. Self-Inspection and Acceptance (SI&A) LEAN THINKING with SIX SIGMA

67. Lean Implementation Sequence Distribution System Kaizen One-piece flow Pull/Kanban Takt time PEO Equipment Kaizen (TPM) 3P, Autonomation PLE Leveled Production Line Balancing Reduce: lot sizes, setup times, lead times, operator cycle times, inventory AWA FLOW: AIWs (Gemba Kaizen) REN Factory Layout Kaizen Standard Work: Operator Methods ESS process simplification, quality and maintenance - 5S - Organize the workplace LEAN THINKING with SIX SIGMA

69. How Does Lean Help Quality? RULE #1: Do not make, accept or pass on a defect. RULE #2: Inspection is the enemy of quality. RULE #3: The operator is responsible for identifying, tracking and correcting his defect rate. By using standard work, reducing bottlenecks, and using other Lean tools, Lean makes processes - stable - reliable - predictable - repeatable The HIDDEN FACTORY: Lean will not succeed without addressing and correcting variation and its resulting defect rate, because FLOW cannot exist in a process with a high defect rate. Our processes have THINKING with SIX SIGMA LEAN high defect TOLERATE high defect rates rates because we

71. Implementation Metrics Leading Indicators 1. Cycle Time 2. Inventory (amount, turn rate, IRA) 3. Productivity 4. Square Feet (foot print) 5. Set-up Time 6. Product Lead Time Lean is data driven 7. People Travel 8. Product Travel 9. Volume 10. Crew Size 11. Safety/Ergonomics LEAN THINKING with SIX SIGMA

72. METRICS - The Forensics of CPI 1. What gets measured gets fixed . 2. If you can measure it, you can change it. 3. Metrics drive behavior . Tell me how you will measure me and I will tell you how I will perform. 4. The folly of rewarding A while hoping for B . 5. Measure first, then manage. 6. Leading indicators versus Lagging indicators (NDE)- Always reviewing the past , and not guiding the future . Manage the leading indicators, and the lagging indicators will be O.K. 7. Problems must be quantified, exposed and confronted . Lean cannot remedy an unacknowledged or hidden problem. 8. Don't measure effort and process compliance. Measure results. 9. What you allow, you encourage. 10. Your Recommendations are only as good as your analysis. Your analysis is only as good as your data. Your data is only as good as you measurement system. Data Integrity is the foundation of a credible project. LEAN THINKING with SIX SIGMA

74. Reasons Lean Fails 1. No sense of urgency (burning platform) 2. Looking for a quick fix (lean pill) 3. No leadership commitment and support Awareness Full-time practitioners 4. No education and awareness among the employees and management. (CM) 5. No understanding of Lean (flavor of the month) 6. No Sensei (Do-It-Yourself Lean) 7. No Value Stream Map 8. No implementation or sustaining plan (PM) 9. No customer and supplier involvement in the improvement process. LEAN THINKING with SIX SIGMA

76. Managing Resistance Traditional Situation Leading Change Increasing Increasing Increasing Increasing Neutral Neutral resistance cooperation resistance cooperation Critical mass Early adopters Anchor draggers Strong pull from early "Uncommitted adopters Mass" You cannot ignore the anchor draggers! Management Management attention attention "The focal point really shouldn't be on THINKING with SIX SIGMA but on getting LEAN managing resistance, people about the benefits of the change." -- Jeff Hiatt, president and CEO of Prosci excited

77. How Do You Know When You are Lean? 40% reduction in assembly hours per unit 60% reduction in lead time You never get Lean, 92% reduction in line move time with SIX SIGMA LEAN THINKING you only get Leaner

78. Some Lean Successes Helicopter BCD Check: Reduced TAT from 28- 14 days Surveying Services: Exponentially increased flying hours for the photography aircraft. 10% increase in one week Wellhead Turnover: Days to turnover reduced Material Supply: Staging time reduced, scanners repaired, forklifts replaced. LEAN THINKING with SIX SIGMA

79. Lean in Project Mgt and Construction Studies involving international companies suggest a 25% improvement in construction productivity would be the low-hanging fruit. The main findings of the study are: 1. Avoidable Interruptions: Over 60% of workdays contain avoidable interruptions with a loss in man-hours of 10-40%. 2. Overtime : causes approximately 5% loss in productivity for every 5 hours of overtime per week. 3. Over-manning: 10% productivity loss for every 25% unplanned increase in labor force. 4. Days of Week: Productivity on Tuesdays, Wednesdays and Thursdays (Thursday/Friday/Sat in the West) can be 15% lower than that of the remaining part of the working week. 5. Productivity: can vary by up to 400% (from day to day) for same crew, and over 25% amongst crews performing similar activities under the same circumstances. Major causes of productivity variation are interruptions, quality of labor force, and motivation. Dr. Rashad Zakieh (PMP) Operations Services Saudi Aramco, Saudi Arabia Tel. 874-3800 (Work) LEAN THINKING with SIX SIGMA International email: rashadzakieh@hotmail.com

80. BOEING 737 FINAL ASSEMBLY BEFORE LEAN IMPLEMENTATION LEAN THINKING with SIX SIGMA

82. The Boeing 737 Moving Line LEAN THINKING with SIX SIGMA

84. SIX SIGMA It is a process capability measure It is a commercial program Packaged at Motorola in 1985 May lead to "Analysis Paralysis" LEAN THINKING with SIX SIGMA

85. Lean Focus - The 8 Wastes Lean focuses on identifying and eliminating the 8 hidden wastes common to both manufacturing and service industries: 1. OVER-PROCESSING: Adding more value to a service or product than customers want or will pay for. 2. MOTION: Needless movement of people (looking for things). 3. TRANSPORTATION: Unnecessary movement of materials. 4. EXCESS INVENTORY: any work-in-process or raw material that is in excess of what is required to produce just-in-time for the customer. 5. WAITING: Any delay between when one process step/activity ends and the next step/activity begins. 6. DEFECTS: Any aspect of the product or service that does not conform to customer needs. (SIX SIGMA) Variation = defects 7. OVER-PRODUCTION: Production of service outputs or products beyond what is needed for immediate use. 8. UNUSED EMPLOYEE CREATIVITY: Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees. LEAN THINKING with SIX SIGMA

86. Understanding Variation Variation means that a process or product does not produce the same results every time it is measured is always present at some level is inherent in every process or product is our enemy in delivering services or manufacturing products, reduction helps to improve quality, reduce costs, increase profits, and increase customer satisfaction. LEAN THINKING with SIX SIGMA

87. Lean Six Sigma Process Improvement Lean Six Sigma uses the DMAIC process for Project Management Project Execution LEAN THINKING with SIX SIGMA

88. Dissecting DMAIC Define Measure Analyze Improve Control the process: the process gains: what is important to the customer?: Analyze Data Ensure Solution is Identify Root Causes Sustained Project Selection Team Formation Establish Goal the process performance measures: how well we are doing?: Prioritize root causes Collect Data Innovate pilot solutions Construct Process Flow Validate the improvement Validate Measurement System LEAN THINKING with SIX SIGMA

89. Y = f(x) Y= f(x) , refers to a problem or process output (Y) , that is the result of one or more process inputs (Xs) . Eliminating or improving the Xs reduces or eliminates the problem (Y) . Controlling the Xs provides a process that is more - Predictable - Reliable - Capable - Repeatable, and - Dependable The results are a Y that can be forecast, and a proactive rather than reactive work environment. LEAN THINKING with SIX SIGMA

90. Waste & Process Variation - The True Costs Scrap Inspection Rework Traditional Cost of Warranty Field Modifications Poor Quality (COPQ) Rejects (measured) Penalties & damages Hidden Cost of Lost sales Poor Quality (COPQ) times Long cycle Overtime Margin slippages (measurable) Late delivery More receivables Travel & Living Expenses Longer Set-ups Lost Opportunity Excess inventory Expediting costs Lengthy Installs (intangible) Customer Productivity Loss Sales compromises Engineering Change Orders Lost Customer Loyalty Customer Dissatisfaction Employee Morale, Productivity, Turnover LEAN THINKING with SIX SIGMA

91. Understanding & Reducing Variation # of Goals Lower Specification Upper Specification Limit LEAN THINKING with SIX SIGMA Limit

92. What Does Sigma Level Mean? Example Lower Upper Specification Specification Limit (customer) Limit (customer) Customers have Target a target in mind, but will allow some variation within the Spec Range LEAN THINKING with SIX SIGMA

93. What Does Sigma Level Mean? Example Lower Upper Specification Specification Limit Target Limit Actual Measurement has Considerable Variation Defects Defects - Resulting in Scrap, Waste, Late Deliveries, and Customer Dissatisfaction LEAN THINKING with SIX SIGMA

94. What Does Sigma Level Mean? Lower Upper Specification Specification Target Limit Limit How Capable is our Process to Produce within Defects Defects Spec? Sigma Defects % Level Per Mill. In Spec. 2 308,500 69.1 On Average it's OK -it's a Variation issue On Average it's OK - it's a Variation issue LEAN THINKING with SIX SIGMA BEWARE OF AVERAGES

95. What Does Sigma Level Mean? Lower Upper Specification Specification Limit Limit Reducing Variation is Clearly the Key to Improving Process Capability Sigma Defects % Level Per Mill. In Spec. 3 66,800 93.3 LEAN THINKING with SIX SIGMA

96. What Does Sigma Level Mean? Causes of Variation Include Lower Upper Specification Specification a Variety of Limit Limit Factors, such as: 1. Machines 2. People 3. Material 4. Environment 5. No Standard Sigma Defects % Work. Level Per Mill. In Spec. 4 6,200 99.4 LEAN THINKING with SIX SIGMA

97. What Does Sigma Level Mean? Variation Causes Errors, which Lower Upper Cause Defects, Specification Specification Limit Limit which Lead to Rework, and to Processes which are not Stable Reliable, Repeatable, and Sigma Defects % Predictable. Level Per Mill. In Spec. 5 233 99.98 LEAN THINKING with SIX SIGMA

98. What Does Sigma Level Mean? Reducing Variation Lower Specification Upper Specification Reduces Errors, Limit Limit and the Resulting Defects and Rework, and therefore leads to Improved Process Sigma Defects % Capability Level Per Mill. In Spec. 6 3.4 99.9997 LEAN THINKING with SIX SIGMA

99. Variation = Unpredictable Processes Work Order Process Mean Improved Process Existing Process 1 50 100 Output Variation in weeks Contracting process Material Delivery process Time to sink a well Wife's shopping bill Wife's shopping time Customers Remember the Extremes (Variation), not the Average LEAN THINKING with SIX SIGMA

100. ENTITLEMENT Improved Process Upper Mean Specification Entitlement Limit Existing Process 1 50 100 Output Variation in weeks LEAN THINKING with SIX SIGMA LSS Helps Us Consistently Deliver the Best We Can Do.

101. What Does Sigma Level Mean? sure Lower Mea y Upper Limit evel is a bilit Specification Specification Limit a L ss Capa Sigm roce of P Sigma Defects % Level Per Mill. In Spec. 2 308,500 69.1 3 66,800 93.3 4 6,200 99.4 5 233 99.98 LEAN THINKING with SIX SIGMA 6 3.4 99.9997

102. Practical Meaning of Six Sigma 3.8-Sigma 3.8-Sigma 6-Sigma 6-Sigma 3.4 defects per million 99% Good 99% Good 99.99966% Good 99.99966% Good opportunities 20,000 lost articles of mail per hour Seven articles lost per hour 5,000 incorrect surgical operations per 1.7 incorrect operations per week week Two short or long landings at most One short or long landing every five major airports each day years 200,000 wrong drug prescriptions each 68 wrong drug prescriptions per year year LEAN THINKING with SIX SIGMA

103. Six Sigma Project Management Checklist Define Define Measure Measure Analyze Analyze Improve Improve Control Control Identify Sponsor and other Create Fishbone Analyze Process Flow Develop solution options Perform Capability key stakeholders Tie to defined Critical Path Improve control of Analysis of improved Form project team defect Value-added significant root causes process Team leader Collect Data steps Re-design process to Develop and Implement Team members Ys (results) with Non value- obtain required a Control Plan Tour process Xs (data tags) added steps capability Complete Project Clarify project Evaluate Measurement Opportunities Perform DOE as Closure Package Problem statement Systems Analyze Data required Update financial Goal statement Gage R&R, Graphical tools Evaluate options and select benefits statement as Process output = Y Understand detailed Hypothesis final solution required Define process process Tests Prioritization matrix Get OCD focal boundaries Detailed process Interrelationship Determine measurement final evaluation High level map map w/ rework Digraph (if system for improved process List best practices (SIPOC) loops appropriate.) Create implementation plan Identify lessons Define project boundaries Describe Process Regression Update FMEA learned Resources Numerical analysis Update financial benefits Authority statistics Identify and collect statement Use SPC Charts Determine project timeline Graphs: Time, additional required data Contact Six Sigma Hand off project to Identify CTQ Customer Hist., Pareto, etc. Identify significant Xs OCD for concurrence process owner Requirements Create control Tie to root Obtain buy-in / support for Create follow up Define the Defect chart cause analysis improvement actions action plan Define defect Establish Process Draw Conduct pilot / testing to Develop Final report out measure Capability conclusions verify results Standard Develop estimate of DPMO or % Perform FMEA Implement improvements template potential financial benefit if Defects Update charter as Collect data to verify project goal is achieved Calculate Z required improvement Gain Sponsor Approval of Update Charter Develop Analyze Communicate results Project Charter as required report out Update Charter Identify Pull and Push Develop Define/Measure Standard as required Leveraging opportunities report out template Develop Improve report out Standard template For Sponsor Project Champion Master Black Belt

105. You Turn the Gears # of Teams Chartered Value Stream # of Events Penetration ultiple Passes Full-Time Resources Discipline to the Process Results Critical Mass Internal Experts Self-sustaining Lean Culture DEPLOYMENT METRICS LEAN THINKING with SIX SIGMA

106. Leadership's Role Senior Leadership 1. Create the Vision - Where are we going and why are we going there? 2. Align the Organization - Goals and Objectives - One Plan - One Initiative 3. Participate in the Process - Don't just "talk it" , WALK IT 4. Commit Resources - Right quantity and caliber 5. Educate the Workforce 6. Communicate - Vision, Results, Lessons Learned LEAN THINKING with SIX SIGMA

107. Leadership's Role The Manager's Role 1. Help pick the right value streams, projects and teams 2. Follow the method Remove barriers to change Have one plan 3. Clearly define roles and responsibilities 4. Support the Education & Training of your employees 5. Communicate Engage the workforce in dialogue about Lean. Walk the walk, talk the talk. Host and participate in continuous process improvement activities. Be a cheerleader. Emphasize quality, 5S, identification and elimination of waste. Demand follow-up and sustained improvement. LEAN THINKING with SIX SIGMA

109. The Results REMEMBER: It is CONTINUOUS Process Improvement COST, QUALITY , DELIVERY , SAFETY , MORALE Lean Increases Capacity - Your process can produce the same amount with fewer people. - Your process can produce more with the same number of people. No more band aid solutions that become tomorrow's problems. You come much closer to solving your process problems for the last time In a process with - Continuous Flow - Based on Takt Time - in a Pull Environment LEAN THINKING with SIX SIGMA

110. Lean or Six Sigma Goal: Breakthrough Performance Focused on things that matter Current State Process Lean or Six Sigma Breakthrough Defect s, cost, l time, waste Improvement Period Future State Process Time LEAN THINKING with SIX SIGMA

112. Reading List Lean Thinking The Machine That Changed the World Better Thinking, Better Results Gemba Kaizen High Velocity Culture Change Learning to See 5 Pillars of the Visual Workplace The Goal Critical Chain The Gold Mine THINKING with SIX SIGMA LEAN

113. WEBSITES - www.productivityinc.com - www.productivitypress.com - www.qualitypress.asq.org - www.sme.org - www.asq.org - www.crcpress.com - www.lean.org - www.nwlean.net - www.pmi.org - www.qualitydigest.com - www.isixsigma.com LEAN THINKING with SIX SIGMA

115. SHUKRAN JAZEELAN

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