#An Introduction to Lean Six Sigma (6σ)# By SN Panigrahi, Essenpee Business Solutions, Lean - Six Sigma, Six Sigma - Introduction, Six Sigma – Methodology - DMAIC, Six Sigma – Tools & Techniques, Lean Defined – 5 Principles of Lean, Lean – 7 / 8 Wates, Implementing Lean Six Sigma

1. An Introduction to
Lean Six Sigma (6σ)

2. 2
SN Panigrahi is a Versatile Practitioner, Strategist, Energetic Coach, Learning Enabler & Public Speaker.
He is an International-Corporate Trainer, Mentor & Author
He has diverse experience and expertise in Project Management, Contract
Management, Supply Chain Management, Procurement, Strategic
Sourcing, Global Sourcing, Logistics, Exports & Imports, Indirect Taxes –
GST etc.
He had done more than 150 Workshops on above
Published more than 500 Articles; More than 60 Youtube Presentations
Around 70 SlideShare Presentations
He is an Engineer + MBA +PGD ISO 9000 / TQM with around 29 Yrs of
Experience
He is a certified PMP® from PMI (USA) and become PMI India
Champion
Also a Certified Lean Six Sigma Green Belt from Exemplar Global
Trained in COD for 31/2 Yrs. on Strategy & Leadership
GST Certified – MSME – Tech. Dev. Centre (Govt of India)
ZED Consultant – Certified by QCI – MSME (Govt of India)
Member Board of Studies, IIMM
Co-Chairman, Indirect Tax Committee, FTAPCCI
Empanelled Faculty in NI MSME
He has shared his domain expertise in various forums as a speaker & presented a number of papers in various national and
international public forums and received a number of awards for his writings and contribution to business thoughts.
SN Panigrahi
9652571117
snpanigrahi1963@gmail.com
Hyderabad

3. 3SN Panigrahi

5. 5

6.  Six Sigma is a Disciplined, Statistical-based, Data-
Driven Approach and Continuous Improvement
Methodology for Eliminating Defects in a Product,
Process or Service.
 Six Sigma is the Measure of Quality that Strives for
Near Perfection (Zero Defects).
 The Purpose is to Measure and Eliminate Defects
 Greek Symbol “sigma” or "σ”, is a Statistical Term for
Measuring Process Deviation from the process mean
or target.
 Six Sigma Stands for 6 standard deviations (6σ)
between average and acceptable limits.
 Six Sigma is a Reference to a Statistical Measuring
System, Equivalent to just 3.4 Defects per Million
Opportunities (DPMO).
 Six Sigma Methodology : DMAIC - Define, Measure,
Analyze, Improve, Control

7. 7

8. What is
Six
Sigma?
A
Metric?
A
Methodology?
A
Management
System?
A
Philosophy?
It’s Measure of Quality that
Strives for Near
Perfection. It uses a set
of Quality
Management Tools to
Minimize Variances.
It’s a Quality Management
System & Continuous
Process Improvement
Approach.
Zero Defect In Everything We
Do……Based on Philosophy
that Reduction in Defects is a
Better Approach to Reduce
Costs & Improve Customer
Loyalty.
It’s a Business
Improvement & a Data
Driven Methodology that
Follows a Defined
Sequence of Steps &
Focuses on Customer
Requirements.Objectives / Specific Value Targets : Reduce Defects, Reduce Cycle
Times and Improve Customer Satisfaction, reduce costs and Increase Profits.

9. Carl Friedrich Gauss
(1777-1855)
introduced the
concept of the
Normal Curve.
In 1920's, Walter
Shewhart showed that
three sigma, from the
mean, is the point where
a process requires
correction. This finally
led to Control Charts
FMEA was formally
introduced in the late 1940s
for military usage by the US
Armed Forces. Later it was
used for aerospace/rocket
development to avoid errors
in small sample sizes of
costly rocket technology. An
example of this is the Apollo
Space program. The primary
push came during the 1960s,
while developing the means
to put a man on the moon
and return him safely to
earth. In the late 1970s the
Ford Motor
Company introduced FMEA
to the automotive industry
Ronald Fisher
introduced Design of
Experiments through
a book in 1935. This
was a result of a series of
studies that
started with study of
variation in crop yield.
AIAG, Automotive Industry Action Group published the most accepted document on
Measurement Systems Analysis (MSA). MSA is an essential step in Six Sigma
methodologies and is used to ensure reliability of data.

10. 10
Following WWII, American manufacturing hit a stumbling block. Japanese companies displayed superior,
sophisticated processes and utter dedication to quality control, beating out the U.S. internationally and, in many
markets, domestically. This gap became even more pronounced with the advent of electronics, which required
both precision and significant resources to produce.
In the 1980’s, Motorola, led by CEO Bob Galvin, made the decision to prioritize quality control and focus heavily
on refining their manufacturing process to compete. This is when Bill Smith, an engineer at Motorola widely
hailed as the inventor of Six Sigma, made the connection between Shewhart’s method of defect measurement
(Control Charts) and the need to set and identify specific improvement goals. This model gave Motorola a
working, statistical method to analyze their processes, identify faults, and make ongoing enhancements. Similar
to Shewhart, Smith devised a threshold of tolerance for defects, but Smith’s was much more specific. His
threshold was measured in defects per 1 million opportunities for a defect to occur (DPMO).
Smith arrived at a desired DPMO of 3.4 for Motorola, a six sigma deviation from the mean. And thus, Motorola’s
Six Sigma methodology was born. The method encouraged absolute commitment to meeting this quality
threshold. When it went unmet, advanced analyses would be put in place to determine which part of the process
needed refinement, then identify and implement a solution.
Companies like 3M, IBM, and (perhaps most famously) General Electric under Jack Welch adopted the Six
Sigma mode of constant process improvement through statistical analysis with great success. From there, the
methodology picked up speed, with its principles still visible to this day in contemporary leaders like Amazon and
Boeing.

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12. The company saved $ 16 billion in 10 years
 In the late 1970's, Dr. Mikel Harry, a senior staff engineer at Motorola's Government
Electronics Group (GEG), experimented with problem solving through statistical analysis.
Using this approach, GEG's products were being designed and produced at a faster rate and at
a lower cost.
 In 1986, Bill Smith a senior scientist working in Motorola introduced the concept of six
sigma to standardize the way defects are counted – He is now called Father of Six Sigma.
 Subsequently, Dr. Harry began to formulate a method for applying six sigma throughout
Motorola.
 In 1987 when Bob Galvin was the Chairman, Six Sigma was started as a methodology in
Motorola & officially Launched its Six Sigma Program.
 1991- Motorola certified its first Black belt six sigma expert.
 2000 - Six Sigma was effectively established as an industry standard. Training,
consultancy, and implementation of Six Sigma methodology were formalized.
 Terms such as Black Belt and Green Belt were coined by Mikel Harry in relation to martial
arts.

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e.g. Reducing No of bugs in a Software
e.g. Reduction of Defects in Apparel
Defect
Reduction
e.g. Increasing the % loan application processed
versus loan application received
e.g. Increasing Sales per hour
Yield
Improvement
e.g. Improving CSAT scores in an ITES process
e.g. Reducing attrition or turnover
e.g. Reducing transaction processing time, Average
Handling time etc
Improved
Customer
Satisfaction
e.g. Improving Occupancy % of a Multiplex
e.g. Reducing and controlling raw inventory
e.g. Reduction of Non-value add time in a process
Higher Net
Income

15. 15
Champion is a Process-Owner who is responsible for the process being
Improved.
Master Black Belt Trains, Coaches the Green Belt & Black Belt Project-
leaders & Guiding them for the Projects as MENTORS.
Full time specialists (internal or consultants) with a more detailed
technical knowledge & Thorough - More Accurate - understanding of all
aspects of Lean Six Sigma
Part time practitioners. Initiate and Run (project manage) Small
Improvement Projects & Implement Lean Six Sigma proficiently.
Assist the Black Belt as team members for data collection and analysis.
Staff Members who have a basic level of L6S technical knowledge – they
can work in Improvement Initiatives - They assist in Green Belt and Black
Belt projects as team members.
Introductory Level of Knowledge -Staff members who are aware of the
Lean 6 Sigma corporate culture. Local Problem-solving Teams on the
Shop Floor.
White Belt
Yellow Belt
Green Belt
Black Belt
Master Black
Belt
Champion

17. D M A I C
17
Measure
What is
Frequency of
Defects /
Errors
Improve
How can we
Fix the
Problem
Control
How can we
make the
Process
Stay Fixed
Define
What are
Customer
Expectations
from the
Process
Define the
Customer, their
Critical to Quality
(CTQ) issues, and
the Core Business
Process involved.
Create Problem
Statement. Define
Performance
Standards
Identify Y
Measure the
Performance of
the Core
Business
Process
involved.
Determine
Process
Capability.
Identify base
line & Target
for Y’s.
Analyze the data
collected and
process map to
Determine Root
Causes of Defects
and Opportunities
for Improvement.
Identify
Potential Xs
Affecting
Output
Improve the
Target Process
by designing
creative
solutions to fix
and prevent
problems
Carry out
Improvements
for Vital X
Control the
Improvements to
keep the Process
on the New
Course &
Stabilize
Take Actions
to Sustain
the
Improved
Results
Analyze
Why, When &
Where Defects
Occur

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The normal distribution is also known as a Gaussian distribution. It is the most frequently referenced
distribution and it approximates many natural tendencies of data. The normal distribution is a
probability distribution of a continuous random variable whose values spread symmetrically around
the mean.
 All normal distributions are symmetric and have bell-shaped density curves with a single peak.
 Location of Normal Distribution.
 If a data sample or population is normally distributed, the mean, median and the mode will have
the same approximate values.
 The probability density curve of the normal distribution is symmetric around a center value which
is the mean, median and mode.
 The Mean and Standard Distribution are the Two Parameters that Define the Normal
Distribution.
 Spread of Normal Distribution.
 The spread or variation of normally distributed data can be described using variance or
standard deviation.
 The smaller the variance or standard deviation, the less variability in the data set.

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 The 68-95-99.7 rule or the empirical rule in statistics states that for a normal distribution.
 About 68.27% of the data fall within one standard deviation of the mean, that is, between μ-σ and μ+σ.
 About 95.46% of the data fall within two standard deviations of the mean, that is, between μ-2σ and
μ+2σ.
 About 99.73% of the data fall within three standard deviations of the mean, that is, between μ-3σ and
μ+3σ.
Example :
 The Mean (μ) Height of an American is 69 Inches
 Standard Deviation (σ) is 2.5 Inches
Height between Population Covered
one standard deviation μ-σ and μ+σ 69-2.5 = 66.5 inches
69+2,5 = 71.5 inches
68.27%
two standard deviations μ-2σ and μ+2σ 64 To 74 inch 95.46%
three standard
deviations
61.5 to 76.5 inch 99.73%

20. Normal Distribution Curve
µ + -  - 1σ + 1σ
- 2σ + 2σ
68.26%
- 3σ + 3σ
+ 4σ
- 5σ
95.44%
99.73%
99.9937%
99.99943%
+ 5σ
- 6σ + 6σ
99.999998%
- 4σ
Lower
Spec
Upper
Spec
A normal distribution
exhibits the following:
68.3% of the population is
contained within 1
standard deviation from
the mean.
95.4% of the population is
contained within 2
standard deviations from
the mean.
99.7% of the population is
contained within 3
standard deviations from
the mean.

21. Process
Sigma
DPMO (Defect
Per Million
Opportunities)
Percentage
Defects
Process
Yield
Cost of
Quality as
Percentage of
Sales
Competitive
Level
1.0 690000 69% 31.0%
More than 40%
Non
Competitive2.0 308000 30.8% 69.20000%
3.0 66,800 6.7% 93.32000%
25-40% of
sales Industry
Average
4.0 6210 0.62 99.37900%
15-25% of
sales
5.0 230 0.023% 99.97700% 5-15% of sales
World Class
6.0 3.4 0.00034% 99.99966% <1% of sales
Shows how Dramatically the Cost of Quality as a Percentage of
Sales Decreases if the Process Sigma Improves.
Business Processes with better process sigma will have significantly lower prevention and appraisal
costs. Although you will never fully eliminate appraisal and prevention costs (as opposed to failure
costs that in an ideal zero defect world would also be zero), their reduction due to better process
performance will be significant.

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you are in the air, 28000 feet above the ground, flying in a Boeing 777 Aircraft and suddenly a nut-
bolt in the wing of the plane loosens (probably due to manufacturing defect) making it difficult for
the pilot to steer the flight!
Suppose the Aircraft Manufactured with 3σ Level, than there is Probability of 66,800 Chances that
the Flight may Fail on one Million Flying Trips or almost 7 (6.7) Chances on each 100 Flying Trips.
This is the only reason why defects are not welcome and organizations try to achieve higher
Sigma levels.
Pharmaceutical Companies, Airline Manufacturing Organizations, Automobile Manufacturers,
among others are bound to work at a sigma level which is either 6σ or more than that.

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Six Sigma
99.99966% Good
 20,000 articles of mail lost per hour
 Unsafe drinking water for almost 15
minutes each day
 5,000 incorrect surgical operations
per week
 2 short or long landings at most
major airports each day
 200,000 wrong drug prescriptions
dispensed each year
 7 articles of mail lost per hour
 Unsafe drinking water for 1 minute
every 7 months
 1.7 incorrect surgical operations
per week
 1 short or long landing at most
major airports every 5 years
 68 wrong drug prescriptions
dispensed each year
3.8 Sigma
99% Good

24. The 3 Sigma Company The 6 Sigma Company
 Spends 25-40% of sales dollars on cost of failure  Spends 5% of sales dollars on cost of failure
 Relies on inspection to find defects  Relies on capable process that don’t produce
defects
 Does not have a disciplined approach to gather
and analyze data
 Use Measure, Analyze, Improve, Control and
Measure, Analyze, Design
 Benchmarks themselves against their
competition
 Benchmarks themselves against the best in the
world
 Believes 93% is good enough  Believes even 99% is unacceptable
 Define CTQs internally  Defines CTQs externally

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26. 26
Analysis of Variance (ANOVA)
Box Plots
Brainstorming
Root Cause Analysis : Cause-
Effect Diagrams & 5 Whys
Correlation & Regression
Design Of Experiments
Graphs and Charts – Histograms -
Scatter Diagrams - Check Sheets
Hypothesis Testing
Pareto Analysis
Voice of Customers (VOC)
Process Capability Studies
Process Flow Diagrams
Quality Function Deployment
Response Surface Methods
Standard Operating Procedures
(SOPs)
Statistical Process Control -
Process Control Charts
5S & Kaizen – Poka Yoke / Mistake
proffing
Value Stream Mapping – Bench
Marking

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The Lean Method of Production in manufacturing systems was first brought to
public attention by John Krafcik in 1988 when he published his article
“Triumph of the Lean Production System.” This article helped people to begin
to understand the benefits of using lean principles in a production system with
the overall goals of reducing waste and maximizing efficiency.
However, it was not until the book “The Machine That Changed the World,” by
Womack, Jones and Ross was published in 1990 that the lean method
became widely known and sought after.
The most successful implementation of Lean Manufacturing to date is widely
acknowledged to be when Toyota created the Toyota Production System
(TPS).

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Lean Principles
Lean is a business philosophy, not just a tool set or method for improvement.
This business philosophy was derived from Toyota experiences and in
particular from its Toyota Production System (TPS).
The focus is on reducing waste in all business processes. The result is
reduction of cost and lead-time as well as an increase in quality.
To be Lean is to provide what is needed, when it is needed, with the
minimum amount of materials, equipment, labour, and space.
It was also a breakthrough step from mass production to lean production,
from a push system to a pull system.
SN Panigrahi

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Lean Manufacturing – Toyota Production System
Following the 1973 energy crisis, Toyota was the only Japanese firm resisting
by working efficiently and effectively. The company managed to overcome this
crisis by deploying a culture of empowerment. Toyota employees were
embarked in a continuous improvement journey and were working to drive
inefficiencies out of work processes. Results are reduction of manufacturing
lead-time and costs as well as improving quality and customer satisfaction.
This is a study of the automobile industry (Womack, J. P., Jones, D. T. & Roos,
D., 1990) that introduced this business philosophy lean production for the first
time to the western world. The Toyota success story base waste elimination has
since kept all industries enthusiast about the lean approach.
To be Lean is to provide what is needed, when it is needed, with the
minimum amount of materials, equipment, labour, and space.
It was also a breakthrough step from mass production to lean production, from a
push system to a pull system.
SN Panigrahi

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Lean Manufacturing Benefits
“Lean manufacturing uses less of everything compared with mass production - half
the human effort in the factory, half the manufacturing floor space, half the
investment in tools, half the engineering hours to develop a new product in half the
time. Also it requires keeping far less than half the needed inventory on site and
results in fewer defects.”
 The typical short-term improvements are:
 Inventory reduction
 Lead-time reduction
 Productivity/Capacity increase
 Quality improvement
 Floor space reduction
 Cost reduction
 Value added/person
 Improved profit margins
 Overall effective efficiency
SN Panigrahi

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The book Lean Thinking introduced five core principles
1. Specify value in the eyes of the customer
The first lean principle is to specify value. Womack and Jones (1996) define value of a product or service as
“a capability provided to a customer at the right time at an appropriate price, as defined in each case by the
customer.” (Womack & Jones, 1996, p. 353) Value is stated in the customer's word. The challenge here is to
focus on what the customer is willing to pay.
2. Identify the value stream for each product
A value stream includes “all the actions, both value added and non-value added, currently required to bring a
product from raw material to the arms of the customer or through the design flow from concept to launch.”
(Morgan, 2002). First we need to create a value stream map that reflects the current state of the process
being treated. This map is then analyzed for waste and value creation, and a future-state map is created,
which represents how the process could and should operate.
We generate then an improvement plan, which will enable the transformation from the current state to the
future state.
Rother and Shook (1999) in their Learning to See have developed a powerful technique to map value stream
which facilitate the identification of wastes and allow process improvement. A sample of a Learning to See
map is shown below.
SN Panigrahi

33. SN Panigrahi 33
Womack and Jones (2003)
established Five Key aspects in
lean methodology that are
necessary to avoid waste. Lean
thinking provides a method to
specify value, align the actions that
create value according to the
optimal sequence, carry out these
activities without interruption when
someone requests them, and
perform them with increasingly
effectiveness.
SN Panigrahi

34. 34SN Panigrahi

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Value-Adding (VA)
These Activities are Essential for Conversion / Changes of Product / Service and Valuable for
the Customer. You would look at Maximizing this Category as these are Providing Customer
Value (Form, Fit, Function).
Necessary but Non-Value Adding (NNVA)
Category that has potential for elimination in the future (with identified improvements) but
can't be eliminated immediately. There are necessary to run the current process. Technology,
environment, culture require these activities. You would look at minimizing this category of
work
Non-Value Adding (NVA)
Non Value-Added Work can usually be eliminated quickly and is not dependent on
improvement of other areas. This is the work nobody needs and it is pure waste. You would
look at eliminating this category of work.
SN Panigrahi

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Value Added
(VA)
Non-Value
Added
(NVA)
Any Activity the
Customer Values &
is Willing to Pay
Who are your
Customers?
What do they Really
Want?
Activities that the
Customer would not pay
for
Any Activity that
Consumes Time and or
Resources and Doesn’t
Add Value to the Products
or Services for the
Customer
Un-Necessary
Waste
These Activities
should be
Eliminated /
Simplified /
Reduced or
Integrated
Necessary
Support
Processes; Legal
/ Regulatory or
Compliance
Requirements
Whether Customer
Considers Worth
Paying?
Does it Change Form
/ Function
Does it Done First
Time Right?
SN Panigrahi

37. 37
Value
Added
Work
Change /
Transformation
First Right
Time
Customer is
Willing to Pay
These Activities Change or Transform an Item
from one Condition to another, or from one
State to another which the Customer needs
These Activities are which the Customer Wants
Done, as he Perceives them to be Necessary
Steps to Create the Product or Service he
Expects, and hence is willing to Pay for
These Activities are done in a Right Way, or
Correctly the Very First Time, that is Without
Need for Correction or Rework

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What is Voice of Customer
Voice of Customer is the customer’s voice, expectations, preferences, comments, of a
product or service in discussion. It is the statement made by the customer on a particular
product or service.
Customer Identification
Internal Customers: Internal
Customers are the ones who
are internal to the organization.
They are Management,
Employee(s) or Any Functional
Department in your
organization.
External Customers: External
Customers are not a part of the
organization. They are either the
ones who use our product(s) or
service(s) or have vested
interest in the organization. For
e.g. Clients, End-Customers,
Shareholders, among others.
Customer is the one who buys or uses your products / services and he/she is the one who
receives the process output. We broadly classify customers into two categories:
SNPanigrahi

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Translating Voices to Needs
Voice of Customer (VOC) methodology can be used to capture the customer needs – both
current (stated needs) and latent (unstated needs).
VOC methodology helps capture the needs of customer through stated verbatim comments
(customer voices). It helps translate verbatim comments (customer voices) into customer
needs to product/service output characteristics (customer requirements).
SN Panigrahi

40. What
Customer
Perceives
as Value
Better & Improved QualityQuality
Enhancement of QuantityQuantity
Value
Addition
Prompt Response & ActionTimeliness
Improvement of Productivity &
PerformanceEfficiency
Sharing of Information of
Mutual InterestInformation
Hold down of Total CostCost
Cordial Relationship &
AssociationRelationship
Collaborative Approach for
ImprovementsCollaboration
SN Panigrahi

41. Customer Value
Perceived
Benefits
Perceived
Sacrifices
Product Value
Service Value
Functional Value
Personal Value
Emotional Value
Image Value
Monitory Price
Time Cost
Energy Cost
Cost of Risks
Regulatory Cost
Psychological Cost
Customer
Value
Value for Money (VFM)
A measure of quality that assesses
the monetary cost of the product or
service against the quality and/or
benefits of that product or service,
taking into account subjective factors
such as fitness for purpose, along
with whole-of-life costs such as
installation, training,
maintenance and disposal, and
wastage.
SN Panigrahi

42. 42SN Panigrahi

43. 43
The seven wastes originated in Japan, where waste is known as “Muda."
"The seven wastes" is a tool to further categorize “Muda” and was originally developed by
Toyota’s Chief Engineer Taiichi Ohno as the core of the Toyota Production System
(TPS), also known as Lean Manufacturing.
Lean implementation focuses on Reducing the Seven (now expanded to 8 wastes) types
of Waste (or Muda, which is the Japanese word for waste).
The 8th waste added is non-used employee talent (N), so that the 8 wastes can be easily
remembered via the mnemonic “DOWN TIME” (Defective
Production,Overproduction, Waiting, Non-used Employee Talent (the 8th
form), Transportation, Inventory, Motion, and Excessive (Over) Processing)

44. 44
• Efforts Caused by Rework, Repair, Scrap and Incorrect InformationDefects
• Producing More than is Needed or Before it is Needed
Over-
Production
• Wasted Time Waiting for the Next Step in the ProcessWaiting
• Under-Utilizing People’s Talents, Skills and Knowledge
Non-Utilization of
Talent
• Unnecessary Movements of Products or ServicesTransportation
• Excess Products and Materials being Produced or ProcuredInventory
• Unnecessary Movement by PeopleMotion
• More Work or Higher Quality than is Required by the Customer
Extra
Processing
D
O
W
N
T
I
M
E

45. 45
Process
Define, Identify,
Prevent, Reduce,
Eliminate and
Continuously
Improve, the 8
wastes of Lean
from impacting
the productivity
of the
organization.
Benefits
 Increased
Productivity
 Improved Quality
 Right Delivery of
Deliverables at Right
Time with in Budget
 Smoother Operation-
Improved Continuous
Flow of Value
 Reduced Operating
Costs

46. 46
Defects Over
production
Waiting Non-Utilized
Talent
Transportation Excess
Processing
Inventory Motion
Down Time
D Defects
O Overproduction
W Waiting
N Non-Utiulized
Talent
T Transportation
I Inventory
M Motion
E Extra Processing
Taiichi Ohno’s
7 Wastes
+ 8th Waste
Non-Utiulized Talent

47. 47SN Panigrahi

48. 48
VSM : Introduction
“Value stream mapping is a lean manufacturing or lean enterprise technique used to
document, analyze and improve the flow of information or materials required to produce a
product or service for a customer.”
The Value stream mapping process allows you to create a detailed visualization of all steps in your
work process. It is a representation of the flow of goods from supplier to customer through your
organization and its related information flow.
A value stream map puts on display all the important steps of your work process necessary to
deliver value from start to finish. It allows you to visualize every task that your team works on and
provides single glance status reports about the progress of each assignment.
 It allows you to visualize and bound your process
 Identify development waste
 Assess an organization’s current state and develop a Current State Map
 Apply Lean principles to create a Future State Map
 It helps you optimize the way you deliver value to your customers
 It helps you identify the process steps with the greatest significance
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Value Stream Mapping
 The Value Stream Mapping method (VSM) is a visualization tool oriented to the Toyota
version of Lean Manufacturing (Toyota Production System). It helps to understand and
streamline work processes using the tools and techniques of Lean Manufacturing.
 The goal of VSM is to identify, demonstrate and decrease waste in the process.
 The Value Stream is the Complete End to End Flow of a Products Life-Cycle
 Value Stream Starts from the getting Raw Materials and goes on up to the Customer’s
Buying, using and ultimately disposing of the Product
 Mapping the Value Stream, in this Context is an exercise to Create a Flowchart or a Process
Map of all the Activities involved in the Product’s Complete Life Cycle.
 Value Stream Mapping thus Created outlines each and every Step of the Process for each
part of the Business and enable recognize waste and identify its causes.
 Only by thoroughly studying and understanding the Value Stream can a company
understand the Wastes Associated, and hence find Opportunities to Reduce Costs and
Tackle Issues in the Business
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50. 50
VSM purpose and benefits
Value stream mapping is a powerful method to ferret out waste in any process, not just manufacturing. That’s its core
purpose. You detail each significant process step and evaluate how it’s adding value—or not adding value—from the
customer’s standpoint. That focus on value keeps the analysis targeted to what really matters, allowing the company to
compete most effectively in the market. Foreseeing or facing any competitive threat, lean practitioners can make good
use of VSM to produce the most value for the customer in the most efficient way possible. It can and should be used on
an ongoing basis for continuous improvement, bringing better and better process steps on line. VSM allows you to see
not only the waste, but the source or cause of the waste.
Value stream mapping, as with other good visualizations, serves as an effective tool for communication, collaboration
and even culture change. Decision makers can clearly visualize the current state of the process and where waste is
occurring. They can see problems like process delays, excessive downtime, constraints and inventory issues. And with
the Future State and/or Ideal State VSM, they can see precisely how to improve.
Although its typical purpose is eliminating waste, VSM can also be seen from the perspective of adding value. After all,
that’s what the customer cares about. Eliminating waste is the means to an end of creating value, such as a lower price
and/or better-quality product or service. Value is something a customer is willing to pay for. The title of a popular VSM
book is even: Learning to See: Value Stream Mapping to Add Value and Eliminate Muda, by Mike Rother and John
Shook. (Muda is lean terminology for waste.)
Value Stream Mapping Purpose & Benefits
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VSM
Forms the Basis of an
Improvement Plan
Focuses on Maximizing
the Overall Flow
Spans Entire Value
Chain
Is a Quantitative Tool for
Identifying & Eliminating
Waste
Visual Tool to Depict &
Understand Linkage
Between Material &
Information Flow
Highlights (SIPOC) –
Suppliers, Input,
Process & Customers
Draws Current State &
Future Desired State &
an Implementation Plan
Key Tools for
Implementation Makes
Process & Problems
Visible
Aligns Organizational
Processes, Creates a
Sense of Ownership
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Value Stream Mapping is primarily a communication tool, but is also used as a strategic planning tool,
and a change management tool.
Steps of VSM
1.Plan and prepare: start by identifying the target of the map and defining the problem to be addressed.
Come up with objectives and goals, and form teams.
2.Draw a current state VSM, showing the current steps and any delays that occur between steps. Key
data should be collected for each step, including process times, length of delays, and the capacity of
each step.
3.Analyze the current state VSM, looking for opportunities to improve flow and eliminate waste.
4.Draw a future state VSM. Work as a team to brainstorm improvements and create a better VSM that
reduces the number of steps, reduces rework, or reduces the delays between steps.
5.Work toward that future state VSM. Closing the gap between current state and future state might
require many opportunities for improvement, Events, or Projects - all of which can be managed by
improvement management software such as KaiNexus.
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Once you have the Value Stream Map ready, the Next Step will be to
Create Flow
What Flows?
"ITEMS" flow through a value stream
– In manufacturing, materials are the items
– In design & development, designs are the items
– In service, external customer needs are the items
– In admin., internal customer needs are the items
Analysis begins with part of a total value stream, that part of the value stream has
customers too.
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Create Flow
 To Create Flow, means to ensure that the Flow of the Process steps is smooth and Free of
Interruptions or Delays.
 The First Step to Achieve this is to Analyze the Process map for Wastes.
 Once Wastes are Identified, you can Perform Root Cause Analysis to understand the Causes
behind the Wastes.
 These Causes need to be Acted upon to ensure the Flow of Steps and Activities are
Smoothed and made free of any issues, problems and bottlenecks.
 Once Wastes are Eliminated, you can find Future ways to Maximize Efficiencies.
 Some of the Strategies for Ensuring Smooth Flow includes
 Break Down Steps
 Re-engineering the Steps
 Work & Production Levelling
 Creating Cross-Functional & Multi-Skilled Departments, Suppliers and Workforce
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Once you have Eliminated the Waste in the Process and Created the
Flow, the Next Step would be establish Pull
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Establish Pull
 Pull is producing as per Customer Demand
 Inventory and Overproduction are Two of the most Problematic Wastes in any Production
 The ultimate goal of the Pull System is to limit Stocking up the Inventory, and to Produce
only to meet the Customer Demand
 To achieve this, you need to Effectively look at the operations of the Business in reverse
on the Value Stream Maps
 The Idea is implement the JIT mode of manufacturing and operations where products
are produced just in time when the Customers need them
 Extending this further, this also helps to get and procure even the Raw Materials, Just-in-
Time when the Production Needs them
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Once you Eliminated the Waste in the Process, created the Flow and
Established the Pull, the Final Step is to Keep the Improvements
Sustained and ongoing
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Pursue Perfection
 Perfection is to achieve best in anything that the Company does
 So it is absolutely not Enough to Just Eliminate Wastes, Create Flow and Establish Pull,
but you need to Develop a Mindset of Continual Improvement.
 Each & Every Employee should strive towards Perfection, and Work with an aim to
Deliver Consistent Value.
 This Relentless Pursuit of Perfection is Key attitude of an Organization that is “Going for
Lean” and makes Lean thinking and Continuous Process Improvement as part of the
Organizational Culture
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Project
Lean
Culture
Establish Project Value
Stream
Recognize Value from
Customer’s Perspective
Do Not Allow Scope
Creep
Try Schedule
Compression
Identify & Eliminate
Every Waste Possible
Abide by Company
Policies & Legal /
Regulatory Frame Work
Involve People
Cultivate a Lean Culture
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https://www.youtube.com/channel/UCVZ
ScNa_leR8XbYINEwTFwQ/videos
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64. Contact Details:
SN Panigrahi
9652571117
snpanigrahi1963@gmail.com 64