Six Sigma Lean and Kaizen are continuous improvement methodologies that owe their origins to process improvement initiatives in the ...

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6σ &
Kaize
n

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KAIZEN-The Concept
 Kaizen….means improvement
 Ongoing improvement
 Involves everyone
 Both Managers & Workers
 Kaizen Philosophy
 Our way of life need to be constantly improved
 Working life, social life, home life
 Kaizen embodies
 Productivity Improvement
 Total Quality Culture
 QC Circles
 Zero Defects
 …..etc.

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KAIZEN-The Concept
Masaki Imai

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KAIZEN-The Concept

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KAIZEN
INNOVATION
KAIZEN-The Concept

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 Process Oriented Approach
 Leads to Improved Results
 Focus on the process improvement without loosing sight of the
expected results.
 People Oriented Approach
 Focus on ….
 Discipline
 Time Management
 Skill Development
 Participation and Involvement
 Morale
 Communication
KAIZEN-The Concept

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KAIZEN-The Practice
On the spot
improvement
Improved work
procedures
New System and
Facility improvement
Results
Inexpensive
Mostly inexpensive
Small investment
Implementation
Cost
Individual work area
Group Work area
Systems and Process
Target
Everyone
QC Circles
Managers and
Professionals
Involves
Common Sense
Seven QC Tools
Seven QC Tools
New Seven Tools
Seven QC Tools
New Seven Tools
Professional Skills
Tools
Individual
Group
Management

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 Just In Time- Management Oriented Kaizen
 Exact number of required units brought to each successive stage
of production at the appropriate time
 The advantage of JIT
 Shortened Lead Time
 Reduced time spent on non-process work
 Reduced inventory
 Better balance between processes
 Problem clarification
KAIZEN-The Practice

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 Group Oriented Kaizen- SMALL GROUP ACTIVTIES
 Informal, voluntary small groups, organized within the company
 Carry out specific improvement activities
 Many forms:-
 QC circles, Suggestion Groups, Workers group………
 QC Circles…the most famous
 Emphasis on problem solving in the work area
 Advantages of QCC
 Sense of teamwork
 Improved communication
 Improved morale
 Acquire new skills
 Labor-Management relationship improved
KAIZEN-The Practice

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 Individual Oriented Kaizen- SUGGESTION SYSTEM
 Individual provides suggestion on how to improve his work area.
 Helps the individual to be Kaizen conscious.
 Also helps in….
 Workers to speak out.
 Opportunity for management to help workers.
 An valuable opportunity for two way communication
 Suggestions normally covers:-
 Savings in energy, material and other resources
 Improvement in working environment
 Improvements in machines, processes, jigs and tools
 Improvements in customer services
KAIZEN-The Practice

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KAIZEN- Implementation
 Seven Conditions for Successful Implementation of
Kaizen Strategy
 Top management commitment
 Top management commitment
 Top management commitment
 Setting up an organization dedicated to promote Kaizen
 Appointing the best available personnel to manage the Kaizen
process
 Conducting training and education
 Establishing a step-by-step process for Kaizen introduction.

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Figure 2.2 Ideal pattern from innovation
Time
Figure 2.3 Actual pattern from innovation
Time

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INNOVATION plus KAIZEN
KAIZEN
KAIZEN
INNOVATION
INNOVATION
New Standard
New Standard

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KAIZEN and INNOVATION
Better suited in fast growth
economy
Works well in slow growth
economy
10. Advantage
Large investment but little effort
to maintain
Little investment but great
efforts to maintain
9. Practical Requirements
Technology
People
8. Effort Orientation
Scrap and Rebuild
Maintenance and Improvement
7. Mode
Individual ideas and efforts
Collective group efforts,
systems approach
6. Approach
Selected champions
Every-one
5. Involvement
Abrupt and volatile
Gradual and constant
4. Change
Intermittent and non-
incremental
Continuous and Incremental
3. Time frame
Big Steps
Small Steps
2. Pace
Short term and dramtic
Long-term and business as
usual
1. Effect
INNOVATION
KAIZEN

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Another comparison of Innovation and KAIZEN
Innovation KAIZEN
Creativity
Individualism
Specialist-oriented
Attention to great leaps
Technology-oriented
Information: closed, proprietary
Functional (specialist) orientation
Seek new technology
Line + staff
Limited feedback
Adaptability
Teamwork (systems approach)
Generalist-oriented
Attention to details
people-oriented
Information: open, shared
Cross-functional orientation
Build on existing technology
Cross-functional organization
Comprehensive feedback

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 Six Sigma Was Developed at Motorola in the 1980’s As a
Method to Improve Process Quality.
 It Was First Used to Improve Manufacturing Process
Capability and Then Migrated to Business Processes
Capability
 Companies That Have Deployed Six Sigma: Bank of
America, Motorola, GE, IBM, Kodak and Many More
 The Basic Premise Is, All Processes Have Variation.
Variation Is the Enemy.
About Six Sigma

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Six Sigma Philosophy
 Know What’s Important
to the Customer (CTQ)
 Reduce Defects (DPMO)
 Center Around Target
(Mean)
 Reduce Variation
(Standard Deviation)
?
GE Company Proprietary
November 1998

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• Business Definition
 A break through strategy to significantly improve customer
satisfaction and shareholder value by reducing variability in every
aspect of business.
• Technical Definition
 A statistical term signifying 3.4 defects per million opportunities.
SIX SIGMA-Definitions

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SIX SIGMA DEFINATIONS
6σ
3.4
99.9997%
5σ
320
99.98%
4σ
6 210
99.4%
3σ
66 800
93.3%
2σ
308 000
69.2%
1σ
690 000
30.9%
Your Sigma is…
Your DPMO is….
If your yield is…

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SIX SIGMA-Definitions
 In brief, Six Sigma is a process control method to
improve the quality of products or services in a
continuous manner.
 This method uses six standard deviations of a normal
distribution as the limits of customers’ acceptance of the
system’s products.
 This method is applicable to manufacturing as well as
service industries.
 With six sigmas, only 3.4 defects per million are allowed,
or an acceptable level of 99.9997% is required

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Six Sigma Performance
Less than 2 crashes
4100 crashes
Out of every 500,000
computer restarts
1.8 seconds of dead air
1.68 hours of dead air
For every week of TV
broadcasting per channel
1 misdelivery
3,000 misdeliveries
For every 300000 letters
delivered
With Six Sigma
Quality
With 99 % Quality
Source: The Six Sigma Way by Peter Pande and Others

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Who is Implementing Six Sigma
 At least 25% of the fortune 200 claim to have a serious
six sigma program - Michael Hammer.
 Financial - Bank of America, GE Capital, Electronics -
Allied Signal, Samsung, Sony
 Chemicals - Dupont, Dow Chemicals
 Manufacturing - GE Plastics, Johnson and Johnson,
Motorola, Nokia, Microsoft, Ford.
 Airline - Singapore, Lufthansa, Bombardier
 And hundreds of others in Americas, Europe, Sub
Continent.

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Six Sigma Results
Annual Savings
Company
*$1.5 billion (*since inception in 1998)
JP Morgan Chase
$600 million
Honeywell
$500 million
Johnson & Johnson
$ 16 billion (*since inception in 1980s)
Motorola
$2.0+ billion
General Electric
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35
million.
Investment: salary of in house experts, training, process redesign.

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Key Concepts of Six Sigma
 At its core, Six Sigma revolves around a few key
concepts.
 Critical to Quality: Attributes most important to the customer
 Defect: Failing to deliver what the customer wants
 Process Capability: What your process can deliver
 Variation: What the customer sees and feels
 Stable Operations: Ensuring consistent, predictable processes to
improve what the customer sees and feels
 Design for Six Sigma: Designing to meet customer needs and
process capability

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Dissecting Process Capability
Defects
Process Capability
Inadequate
Design
Margin
Inadequate
Process
Capability
Unstable Parts &
Materials
Defects Acceptable
 Premise of 6σ Sources of variation can be:
 Identified
 Quantified
 Eliminated or Controlled
LSL USL

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Define
Control
Improve Analyze
Measure
Define the problem and customer
requirements.
Measure defect rates and document
the process in its current incarnation.
Analyze process data and determine
the capability of the process.
Improve the process and remove
defect causes.
Control process performance and
ensure that defects do not recur.
“Common sense” doesn’t mean “commonly done” or when done, done well.
Six Sigma Methodology

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Control
Define Measure Analyze Improve
Establish
standards to
maintain
process;
Design the
controls,
implement
and monitor.
Evaluate
financial
impact of the
project
Identify,
evaluate and
select
projects for
improvement
Set goals
Form teams.
Collect data
on size of
the selected
problem,
identify key
customer
requirements
,
Determine
key product
and process
characteristi
c.
Analyze
data,
establish
and confirm
the “ vital
few “
determinants
of the
performance
.
Validate
hypothesis
Improvement
strategy
Develop
ideas to
remove root
causes
Design and
carry out
experiments,
Optimize the
process.
Final
solutions
Project Phases
Six Sigma Methodology

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Six Sigma – Case Study
Service Organisation
Background
 M/s Alpha Inc. manages out bound cargo from a distribution
centre to different stores.
 Deliveries made on trucks - owned and hired.
 Customers dissatisfied at delivery schedules.
 Leadership decision to deploy Six Sigma;
 Team of 1 Black Belt and 3 Green Belts formed
 Sponsor of the project – Distribution Manager

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Define - Critical to Quality (CTQ)
 Focus on customers generating annual revenue of USD
400,000/-.
Delivery within +/- 1 hour of scheduled
delivery time
Level 3 CTQ
On time delivery to schedule
Level 2 CTQ
Timely delivery
Level 1 CTQ
Improved delivery performance
Customer needs
Current process sigma level - 2.43 or 175889 DPMO

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Define - Goal Statement
 Reduce number of delayed deliveries by 50 % by 31st
December Y 2002 to better meet customer requirement
of timely delivery defined as within +/- 1 hour of
scheduled delivery.

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Define - Performance Standards
1 opportunity for a defect per scheduled delivery of
freight.
No. of defect
opportunities per unit
Delivery earlier or later than 1 hour.
Defect
Scheduled time or zero minutes deviation
Target
LSL = -60 minutes
USL= +60 minutes
Specification limits
Process starts when an order is received
Ends when goods are received & signed for at
customers desk.
Process measurement – Deviation from scheduled
delivery time in minutes.
Project Y measure
Timely delivery
Output characteristic
A scheduled delivery of freight
Output unit

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Define - SIPOC Diagram
Store Manager
Customer
Received freight with Documents
Output
Receive order
Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery
Process Steps (high
level)
Stores Order
Input
Stores Manager
Supplier
• Detailed process maps drawn

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Measure and Analyze
 Driver and Distance identified as key factors influencing
delivery performance.
 Driver selected for focus.
 Potential root causes as to why Driver influenced the
time:
 Size of the vehicle
 Type of engine
 Type of tyres
 Fuel capacity

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 Experiments designed and conducted using truck type
and tyre size.
 Findings:
 Larger tyres took longer time at certain routes where area
was cramped and time lost in maneuvering.
 High incidence of tyre failures since tight turns led to stress
on tyres thus increasing number of flat tyres.
 Team modified planning of dispatch process by routing
smaller trucks at more restrictive areas.
Improve

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 Test implementation.
 Process sigma level up from 2.43 or 175889 DPMO to 3.94
or 7353 DPMO.
 Performance still fell short of best in class 4.32 or 2400
DPMO.
 Improvement led to significant customer satisfaction.
 Process continually monitored and data on new cycle times,
tyre failure collected as per defined methods and frequency,
analysed and monitored.
 Customer satisfaction measured and monitored.
Control

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Key Lessons Learnt
 Define
 Difficulty in identifying the right project and defining the
scope;
 Difficulty in applying statistical parameters to Voice of the
Customers;
 Trouble with setting the right goals;
 Measure
 Inefficient data gathering;
 Lack of measures;
 Lack of speed in execution;

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Key Lessons Learnt
 Analyse
 Challenge of identifying best practices
 Overuse of statistical tools/ under use of practical knowledge
 Challenge of developing hypotheses
 Improve
 Challenge of developing ideas to remove root causes
 Difficulty of implementing solutions
 Control
 Lack of follow up by Managers/ Process Owners
 Lack of continuous Voice of the Customer feedback
 Failure to institutionalize continuous improvement.

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Key Lessons Learnt
 “ Define “ ranked most important step but gets the lowest resource
allocation
 Project scoping and its definition is critical to its success/ failure;
 “Measure” is considered most difficult step and also gets the highest
resources
Source: Greenwich Associates Study Y 2002

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 Versatile
 Breakthrough improvements
 Financial results focus
 Process focus
 Structured & disciplined problem solving methodology using
scientific tools and techniques
 Customer centered
 Involvement of leadership is mandatory.
 Training is mandatory;
 Action learning (25% class room, 75 % application)
 Creating a dedicated organisation for problem solving (85/50
Rule).
What Makes Six Sigma Different?

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Benefits of Six Sigma
 Generates sustained success
 Sets performance goal for everyone
 Enhances value for customers;
 Accelerates rate of improvement;
 Promotes learning across boundaries;
 Executes strategic change

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Six Sigma & Kaizen- The Difference
Difficult and High Cost
Simpler and Low cost
Implementation
Improve Existing System
Statistical Method
Improvement Framework-
DMAIC
Improve Existing System
Human Based
Approach
YES
YES
Continuous Improvement
YES
YES
Quality Improvement
SIX SIGMA
KAIZEN
RELIES UPON GROUP
DYNAMICS
FIXED PLAN OF
IMPLEMENTATION

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 K a iz e n S ix S ig m a
 Japanese Origin Western Origin
 Culture Methodology (or Culture)
 Kaizen Umbrella Road Maps
 Continuous Improvement Immediate Perfection
 Mistakes as Possibility for Improvement Reducing Variation and
Defects
 Long-term Results Short-term Results
Possible
 Every Possible Improvement Prioritising Projects
 Providing Quality Ensuring Profitability
 Participation of Every Single Employee Creation of Project
Teams

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