lt module 01 ls overview - rev b
DESCRIPTION
Overview of LeanSigma and tools used.TRANSCRIPT
© PPL Corporation 2011
Lean Technician ProgramLeanSigma Overview
© PPL Corporation 2011
© PPL Corporation 2011
Objectives
At the conclusion of this module you will be able to: Define the term Lean Define the term Six Sigma Understand how LeanSigma is:
– A Philosophy
– A Methodology
– A Measure
– A Culture
Discuss how LeanSigma is aligned with business and individual objectives
Discuss how Lean and Six Sigma work together to optimize processes
Understand some of the tools and measures Understand how LeanSigma makes our jobs easier!
© PPL Corporation 2011
Question Time?
• Are long working hours Common?• Is rework (doing the same task multiple times) a fact of life?• Do employees spend a lot of time compiling, re-compiling, editing?• Is there more than one way to perform a task?• Has the company grown without changing practices?• Have “Band-aids” been applied to areas that are broken?• Do you have standardized procedures?• Do you implement best practices?• Do employees understand how their role affects the process?• Do people communicate the right information at the right time to the right
people?
Does this ever occur?
© PPL Corporation 2011
Ensure highly effective World Class processes that are cost competitive and consistent with customers needs
Implement and Sustain change initiatives to improve performance
Lead initiatives to reduce operating costs to industry leading levels
Develop and implement blueprint for a World Class LeanSigma Enterprise
– common processes, measurements and systems– common training and skill requirements
What is LeanSigma Designed to do?
© PPL Corporation 2011
Lead TimeLead Time
Non Value Adding (NVA)Value
Adding
Typical Value-Adding** Typical Value-Adding** ratioratio
85% 15%
NVA
If focus is only on If focus is only on improving Value-Adding improving Value-Adding operationsoperations
87.5%
VA
12.5%
Companies decrease lead time Companies decrease lead time rapidly by reducing non value-rapidly by reducing non value-adding activity!adding activity!NVA VA
50% 50%
World Class Enterprise
© PPL Corporation 2011
People tend to support what they help create;
Tell Me and I Will Forget
Show Me and I Will Remember
Involve Me and I Will Understand
Learning Philosophy
© PPL Corporation 2011
The vision should be an integrated business system that links people and processes across the entire value stream ( Series of activities and materials )
“Improvement in Isolation is Not Effective”
Sales &
MarketingEngineering SCM Shop Floor Production
CUSTOMER
SERVICE
Information
Systems
Human
ResourcesQuality
SystemsSuppliers
There is no I in Team?
© PPL Corporation 2011
Lean Thinking
TransactionalSigma Lean Thinking means challenging the existing administrative processes and practices that:
– Are no longer applicable in a Lean Environment, and/or– Support business needs that no longer exist, and/or– Are complex and require simplification.
The following slides list typical questions that should be asked to generate ideas for LeanSigma Transactional Teams.
© PPL Corporation 2011
LeanSigma Thinking
Sales, Marketing, Order processing– What is the value to the organization in having complete and accurate
information in the quoting process?– What is the cost of selling products and services that do not fit well in the
production value stream?– How can you reduce the number of order entry transactions?– Can you eliminate manual interfaces by some means of electronic data
interchange methodology?– What would be the effect of reducing the skills required to perform order
processing using work simplification and standardization?
© PPL Corporation 2011
Human Resources– What would be the benefit of reducing the effort associated with payroll-related
activities such as processing and correcting time cards?– What would be the benefit to the organization of simpler, more frequent
employee reviews focused on value stream performance?– How can compensation practices be changed to reinforce lean behaviors such as
teamwork, standardized work, and cross training?– What would be the impact to the organization on employee retention of improving
the screening, hiring, and orienting process?
LeanSigma Thinking
© PPL Corporation 2011
LeanSigma Thinking
Supply Chain– Are there better ways to control inventory that require less effort while providing
the desired results? Using Visual Management?– How you reduce inventory transactions? What will be the impact of reduced
inventory transactions on the quality of data and information?– What activities will change with the incorporation of vendor managed inventories?– What is the impact on the value stream if you eliminate purchase orders?– How can you use the newly available time of purchasing and inventory
management personnel to improve supplier performance?
© PPL Corporation 2011
LeanSigma Thinking
Accounting– What is the time and effort required to perform month-end closing activities?– How will more real time financial and accounting information benefit the decision
making process and the organization in general?– What changes are required in the accounting process to support a lean
transformation of manufacturing?– What would be the impact to the organization if the accounting function reduced
its portion of the order-to-cash process?
© PPL Corporation 2011
© PPL Corporation 2011
What is Lean?
Lean is the elimination of anything not absolutely required to deliver a quality product or service, on time, to our customers.
Lean focuses on improving process flow. Lean is a means of driving process standardization. Lean drives work at the pull of the customer.
© PPL Corporation 2011
Lean Focuses on Waste
All Waste degrades performance
There are 8 Primary Sources of Waste:
− Defects− Over production − Waiting− Not Using Talent− Transportation − Inventory− Motion− Extra Processing
Lean eliminates waste, improving process Speed
• Identified
• Quantified and prioritized
• Eliminated or greatly reduced
Sources of waste can be:
© PPL Corporation 2011
History of Lean
Taiichi Ohno of Toyota was the primary architect Started with a factory/manufacturing orientation Developed to systematically attack the eight types of
muda (waste) Tools and methods evolved by trial and error over
decades The result was the Toyota production system; the basis of
all lean systems
© PPL Corporation 2011
© PPL Corporation 2011
What is Six Sigma?
Six Sigma is a philosophy for managing process improvement.
Six Sigma is a means of continuously improving to meet customer needs.
Six Sigma is a method for reducing process variation and improving process stability.
Six Sigma is a measurement of defects and variation.
© PPL Corporation 2011
Six Sigma Focuses on Variation
All variation degrades performance
Variation buffers include:– Inventory– Time– Extra Capacity
Not all variation is bad– New products– New services
Six Sigma focuses on– Variation due to process– Variation due to flow
Six Sigma improves Stability and Accuracy
• Identified
• Quantified and prioritized
• Eliminated or greatly reduced
Sources of variation can be:
© PPL Corporation 2011
History of Six Sigma
Originated in Motorola in the mid ’80’s– Lots of tools, but no method for solving problems
Six Sigma Black Belt methodology began in late 80’s/early 90’s. Many companies have embraced Six Sigma:
– Allied Signal – 1994– The Stanley Works – 2004– Air Products – Prior to 2000– GE – 1996– Bank of America - 2002
Strategically driven program with top down projects that yield high Return on Investment
Follows LeanSigma roadmap to identify problem’s root causes and implement improvements
© PPL Corporation 2011
Sigma: The Measure
LeanSigma the Methodology, uses Sigma the Measure to Quantify Process Performance
LeanSigma the Methodology, uses Sigma the Measure to Quantify Process Performance
© PPL Corporation 2011
Sigma: The Measure
Source: Journal for Quality and Participation, Strategy and Planning Analysis
World Class99.9997% 3.4 <10% 6
Industry Average
99.4% 6,210 15-20% 4
99.976% 233 10-15% 5
93% 66,807 20-30% 3
Non Competitive65% 308,537 30-40% 2
50% 500,000 >40% 1
Yield DPMO COQ Sigma
What is 15 - 20% of Revenue worth to you?
Cost of Quality – total costs of quality issues to products, process,
opportunities and customers
© PPL Corporation 2011
Say you played 100 rounds of golf per year… what would a Six Sigma be in your game?
2 sigma - you'd miss 6 putts per round
3 sigma - you'd miss 1 putt per round
4 sigma - you'd miss 1 putt every 9 rounds
5 sigma - you'd miss 1 putt every 2.33 years
6 sigma - you'd miss 1 putt every 163 years
Understanding LeanSigma Levels
© PPL Corporation 2011
What Does LeanSigma Mean In Your Daily Life?
99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)
Postal System
20,000 Lost Articles of Mail / Hr
Airline System
Two Short-Long Landings / Day
Medical Profession
200,000 Wrong Drug
Prescriptions / Week
Postal System
7 Lost Articles of Mail / Hr
Airline System
1 Short-Long every 5 Years
Medical Profession
68 Wrong Drug
Prescriptions / Week
© PPL Corporation 2011
What Does LeanSigma Mean Your Daily Life?
Tax Advice
7
Sigma Level
1,000,000
100,000
10,000
1,000
100
10
1
PPM
Restaurant Bills
Payroll Processing
Prescription Writing
Baggage Handling
AirlineSafety Rate
3 4 5 621
© PPL Corporation 2011
Lean Removes WasteSix Sigma Optimizes
Inputs Process Outputs
Removes WasteRemoves Waste
Removes VariationRemoves Variation
© PPL Corporation 2011
Why Six Sigma + Lean?
Traditional Six Sigma deals with Variation: “How can we eliminate process variation and defects?”
Lean strategies look at Speed: “How can we do the work faster and more efficiently?”
Not all projects need all the tools.
TripleConstraint
QualityDelivery
Cost
© PPL Corporation 2011
Why Lean + Six Sigma?
LeanLean• Waste Elimination• Standard Work• Flow• Customer PULL
SPEED
Six SigmaSix Sigma• Variation Reduction• Scrap / Rework Elimination• Process Optimization• Process Control
STABILITY & ACCURACY
LEANLEAN + + SIX SIGMASIX SIGMA = A POWERFUL COMBINATION = A POWERFUL COMBINATION
© PPL Corporation 2011
LeanSigma Benefits
Our Company: Financial savings Better cash flow Increased revenue Waste, defect and variation
reduction Improved efficiency Higher skilled workforce Commonality – tools, language Our Customers:
Requirements consistently met Higher quality Consistent on time delivery Higher satisfaction
© PPL Corporation 2011
LeanSigma is…
….A Philosophy that – Focuses on continuous organizational improvement– Institutes data driven decision making– Covers the whole business value stream– Aligns projects with strategy– Drives big results
and
….A Methodology that– Is based on Lean and Six Sigma tools– Provides a problem solving roadmap– Uses a set of data driven tools to measure process performance and
identify critical process drivers
© PPL Corporation 2011
LeanSigma is….
…a simple, unique, proven and lasting approach for improving our business performance based on:
Alignment of the customer, strategy, processes and people Big, measurable business results Selective but broad deployment of advanced quality and
statistical tools
© PPL Corporation 2011
LeanSigma Focuses on Processes
“85% of the reasons for failure to meet customer requirements are related to deficiencies in systems and processes… rather than the employee. The role of management is to change the process rather than badgering individuals to do better.”
- W. Edwards Deming
© PPL Corporation 2011
Decision MakingPath
Types of ProblemsYou Will Normally Solve
1. Intuition, gut feel, I think…
2. We have data and look at it
3. We make graphs / charts of the data
4. We use advanced statistical toolsto evaluate the data
Simple
Complex
Changing The Decision Making Processes
How Many Times Have Your Heard This?“I Think The Problem Is…”
How Many Times Have Your Heard This?“I Think The Problem Is…”
© PPL Corporation 2011
Roles and Responsibilities
Executive Team
Champion
Master Black Belt
Team Members
Green Belt
Lean Techs
Black Belt
Projects / Team Direction
Reporting
Support
Strategy / Annual Operating
Plan
© PPL Corporation 2011
The Roadmap
MeasureMeasure AnalyzeAnalyze ImproveImprove ControlControl Initiate the
Project
Define the Process
Determine Customer Requirements
Define Key Process Output Variables
Verify Critical Inputs Using Planned Experiments
Design Improvements
Pilot New Process
Lean Tool Applied
Analyze Data to Prioritize Key Input Variables
Identify Waste
Finalize the Control System
Verify Long Term Capability
Understand the Process
Evaluate Risks on Process Inputs
Develop and Evaluate Measurement Systems
Measure Current Process Performance
DefineDefine
3 - 4 weeks 4 – 6 weeks On-going
© PPL Corporation 2011
Using Lean Tools Within the LeanSigma Roadmap
Define Measure ControlImproveAnalyze
Baseline analysis Process observation Value Stream Map
Spaghetti diagrams Time Value Chart TAKT time / Cycle time
Cell Design Kanban / Pull Mistake Proofing Improvement Events 5S Improvement
Performance to TAKT Standard Work
Charter
Purpose
© PPL Corporation 2011
Summary
Six Sigma is:– An initiative used to proliferate process improvement in any organization– A problem solving approach based on following the DMAIC roadmap that
focuses on reducing variation– A measure of defects
Lean is:– A set of tools used to reduce waste in a process, thus increasing process velocity
Six Sigma focuses on variation, Lean on speed
Lean and Sigma together, form LeanSigma and enable us to drive breakthrough improvements in our organizations.
Lean and Sigma together, form LeanSigma and enable us to drive breakthrough improvements in our organizations.