The document discusses Omnex's approach to integrating Lean, Six Sigma and ISO quality standards for continual process improvement. It provides an overview of Lean/Six Sigma principles and tools like value stream mapping to identify and achieve improvements. The approach develops a culture of continual improvement through a managed process of defining measures, identifying gaps, planning projects and monitoring progress.

1. Integrating Lean & Six Sigma with ISO 9000:2000 & ISO/TS16949:2002 Achieving Continual Process Improvement

2. First Edition September 2003 Omnex provides training, consulting and software to the international market with offices in the USA, Brazil, Canada, India, Mexico, Venezuela, China (PRC) and Thailand. Omnex offers over 25 training courses in business and quality management systems worldwide. 3025 Boardwalk Suite 120 Ann Arbor, MI 48108 (734) 761-4940 email: info@omnex.com Web: www.omnex.com This publication is protected by Federal Copyright Law, with all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, translated, transcribed, or transmitted, in any form, or by any means manual, electronic, electro-magnetic, mechanical, chemical, optical, or otherwise, without prior explicit written permission from Omnex, Inc.

3. Dave Watkins President of Omnex Management and Engineering Consultants, LLC, a global training and consulting company headquartered in Ann Arbor, Michigan, Dave Watkins has a wide range of executive and managerial experience in general and automotive manufacturing, as well as production and distribution management, in a variety of industries including custom molded thermo sets and thermosetting materials, chemical processing, metal fabrication and man-made fibers. He has provided training and consulting services in the U.S. and in all major international markets, primarily to senior and executive management groups, in the strategic implementation of integrated management systems incorporating QS/ISO 9001:2000, ISO/TS 16949:2002, QOS/BOS, Product Development & Launch (NPD), and lean enterprise solutions. Dave’s focus is on effectively employing approaches that enhance the client’s ability to create value for customers and stockholders; he is particularly adept at the integration of quality and business management systems to enhance overall performance and to achieve sustainable competitive advantage with significant bottom line impact. Dave has delivered papers on a variety of topics in the U.S., India, Bahrain, Thailand and China. Having pioneered the application of these approaches in non-manufacturing companies, Dave has also authored or co-authored most of Omnex’s seminars for service companies, including ISO 9001:2000 for Service, Advance Quality Planning (AQP) for Service, and QOS for Service. He has trained many of Ford Motor Company’s STAs, Buyers and Suppliers in ISO 9001, QOS, AQP/APQP and Q1 2002 (both manufacturing and service). His education includes a BA from Widener University and numerous professional courses. Dave has served on the Board of Directors of the Illinois Manufacturers’ Association, as a Trustee for the IMA’s Education Foundation, and as a Trustee for Northeastern Illinois University Foundation.

4. Ron Mitchell Ron Mitchell is Director of Lean/Six Sigma Services at Omnex. He is a trainer and consultant with over twenty years experience-helping clients to understand and apply Lean Manufacturing and Quality Improvement Technologies. Ron studied the Toyota Production System at NUMMI, the joint General Motors and Toyota Motors Corporation facility in Fremont, California; and, was part of the team that helped launch Synchronous Manufacturing in General Motors. Ron received his training in Quality Management from Dr. W.E. Deming, Dorian Shainin and through The Crosby Quality College. Ron is a Lean Manufacturing Black Belt, a Six Sigma Black Belt and a candidate for Six Sigma Master Black Belt. Ron holds Bachelor’s Degrees in Industrial and Organizational Psychology and a Master’s degree in Organizational Development.

5. Rationale for Quality Management Systems from ISO 9001:2000 Enhance customer satisfaction Encourages Analysis of customer requirements Definition of processes Process control Framework for continual improvement Provides confidence in the ability to provide consistent products and services

6. Omnex Approach: Why Integrate Lean/Six Sigma? Achieve and sustain competitive advantage Employ system approach across the entire enterprise to determine, deploy and achieve Strategic Objectives Employ a dynamic, managed process for continual improvement in products and processes Maximize bottom-line impact

7. Eight Quality Management Principles Customer focused organization Leadership Involvement of people Process approach Systems approach to management Continual improvement Factual approach to decision making Mutually-beneficial supplier relationship

8. QMS Process Model

9. Process Focus Versus Functional Focus Processes, not functions, Drive Performance

10. Processes vs. Functions We are organized functionally Maximize use of limited knowledge & skills Standardize methods and activities Commensurate with design authority concept We work in processes Do not recognize functional boundaries Are self defining (making coffee is the same regardless of the functional organization but differs by customer expectations) Fail if any part of the functional input is incorrect or late Processes are at different levels of maturity

11. Characteristics of a Process A process can be identified by a series of unique, but consistent, characteristics. There are six characteristics of a process that are mandatory for effective quality management. A process owner exists The process is defined The process is documented The linkages of the process are established The process is monitored and improved Records are maintained

12. Performance Management Key performance objectives cascade down while performance data pass upward for analysis and action.

13. Challenge ISO 9001:2000: The organization shall continually improve the effectiveness of the quality management system through the use of the quality policy, quality objectives, audit results, analysis of data, corrective and preventive actions and management review. What is your process for managing continual improvement?

14. Business Excellence Model Customer Satisfaction Customer Expectation & Requirements Interested Parties Knowledge Management

15. Customer Expectation & Requirements Plan Knowledge Management Interested Parties Dynamic Continual Improvement Customer Satisfaction Do Check Act Do Check Standardize Study Act Lean Six Sigma

16. Integrated Lean / Six Sigma

17. Six Sigma Quality Six Sigma is a Standard of Performance. It means no more than 3.4 Defects per Million Opportunities  DPMO 2 308,537 69.1 % 3 66,807 93.3 % 4 6,210 99.4 % 5 233 99.97 % 6 3.4 99.99966 % Defects per Million Opportunities Process Capability RTY Rolled Throughput Yield (Long Term)

18. The Lean Enterprise Lean companies use less of everything than do more traditionally managed companies: half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time, less than half the inventory,

19. General Motors Framingham versus Toyota Takaoka versus NUMMI Fremont, 1987 Source: IMVP World Assembly Plant Survey 2 days 7.0 45 19 NUMMI Fremont Toyota Takaoka GM Framingham 2 hours 2 weeks Inventories of Parts (average) 4.8 8.1 Assembly Space per Car 45 135 Assembly Defects per 100 Cars 16 31 Assembly Hours per Car

20. Toyota Today FY 2002 profit report - $12 Billion pre-tax operating profits. More than Ford, GM & DaimlerChrysler AG.... combined. On 10% market share compared with 60% for Ford, GM & Chrysler combined. Toyota’s market capitalization (Shareholder Value) of $80 Billion is $10 Billion more than Ford, GM and DaimlerChrysler AG combined.

21. L/SS Focuses on the Biggest Cost Levers

22. Accounting Human Resources Operations Purchasing Sales Strategic Measures – Voice of The Customer Process Variation Process Measures Voice of the Process Leadership Team Objectives Lean / Six Sigma Integrated With BOS Projects

23. Study the Process – Value Stream Mapping To design and communicate the Lean / Six Sigma Vision – the Future State . To identify and quantify the improvement opportunities – the gap between the current state and the future state. To develop project plans for achieving the future state (integrates Lean & Six Sigma improvement projects). To monitor progress toward the Future State.

24. Profits Products Process Projects People Scorecard Scorecard Scorecard Scorecard Scorecard BOS Value Stream Mapping Continuous Flow Supermarket Pull Six Sigma Quality SMED/TPM/Five S Standards Education Training Resources Feedback Planning for Improvement

25. Profits Products Process Projects People Scorecard Scorecard Scorecard Scorecard Scorecard Achieving Improvement New Knowledge, Skill & Attitudes New Methods, Policies & Procedures Lean Productivity Six Sigma Quality Improved Satisfaction Increased Sales Increased Margins

26. Solution Omnex Lean/Six Sigma Approach: Provides a systemic approach for continual process improvement Is a managed process – Champions/BB/GB Structure Develops the culture that embraces continual improvement Produces Immense bottom line impact

27. Questions & Answers