Competitive Necessities for Business TQM Six Sigma Lean

Competitive Necessities for Business TQM Six Sigma Lean Manufacturing Overview

Total Quality Management TQM is the systematic achievement of customer and stakeholder satisfaction through the coordinated actions of all employees and departments in an organization

What is Quality? Providing value to customers by meeting their requirements and those of other stakeholders through the provision of products, services and the consequences of operation

History of Quality l Prior to World War II – – l Quality meant variation in desired physical characteristics of the product (Product based approach) Conformance to specifications (Manufacturing based approach) Several individuals before and after the war played key roles in the use of quality as a management system

Historical Perspective l After W. W. II, United States was the dominant economy – – l Countries devastated by war – – l Huge war capability converted to consumer goods manufacturing High awareness of quality No infrastructure left Designed more efficient and flexible American managers thought they were invincible – – Management systems became obsolete Quality started suffering Outflow of U. S. money overseas Reversal of roles

What is TQM? l l l Total Quality Management Not about quality alone. It is how to make a company competitive. It ties business goals to operating procedures. Promotes constancy of purpose. Links short-term, mid-term and long-term planning to customer requirements. It is the management system that works.

“It’s a shocking statistic. As many as one-quarter of American factory workers don’t produce anything; they simply fix other workers’ mistakes”

TQM is the philosophy of management. It is how we run our business.

Total Quality Management Policy Deployment TQM Components TQM Performance Improvement Core Values Customer Satisfaction PDCA Management By Fact Daily Work Management Teamwork Innovation Caring

Policy Deployment • Customers • Stakeholders • Employees Define Priorities Align and Focus Organization On A Few Executive Driven Priority Issues To Achieve Breakthrough Performance Policy Deployment

COO’S ACCOUNTABILITIES AND MEASURES Mission: Exceed customer expectations worldwide by providing innovative and high quality products, and be the company of choice for our employees and investors. Accountabilities Customer Satisfaction Assure customer expectations are exceeded for quality and service and ensure a caring response for all customer concerns. Stakeholder Satisfaction Assure shareholder needs are met and ensure profitability, growth and effective utilization of resources. Employee Satisfaction Assure employee satisfaction and their involvement in Total Quality Management. Strengthen organizational effectiveness through employee development. Measures Defect on Arrival (DOA) Orders Missed to Customer Requested Dates (CRSD) Customer Complaints Customer Report Cards Mis-Shipments Service Index Revenue Growth ROI End-to-End Yield Year-to-Year Cost Reduction End-to-End Cycle Time New Product Revenue, Last 3 Years employee Satisfaction Survey Score These outcome indicators become the COO's Managing Points

Performance Improvement • Promote Communication • Enhance Quality of Work Life • Improve Quality • Develop Skills • QI Story • AIP (employee Ideas Program) • Poka-Yoke Performance Improvement

Daily Work Management Define: • Accountabilities • Establish Measures • Maintain Control • Maintain Gains • Achieve Consistency • Incremental Improvement Daily Work Management

Quality Improvement Story l l l l Step 1 - Reason for Improvement Step 2 - Current Situation Step 3 - Analysis Step 4 - Countermeasures Step 5 - Results Step 6 - Standardization Step 7 - Future Plans

1 Objective Demonstrate the importance of improvement needs in measurable terms. Key Activities • Research for themes: –Review departmental indicators –Interview individuals from the work area • • • Consider customer needs to help select theme Set indicator to track theme Determine how much improvement is needed Show impact of theme Schedule the QI Story’s activities Describe the procedure used in the problem area Helpful Tools/ Techniques Graphs Process Flow Chart Control System Checkpoints 1. The Criteria for selection were customer and/or stakeholder oriented. 2. An Indicator measuring our performance in meeting the need was developed. 3. A Theme statement consistent with the indicator was selected. 4. A schedule for completing the 7 QI Story steps was developed.

2 Objective Investigate the features of theme, select a problem, and set a target for improvement. Key Activities • • • Collect data on all aspects of theme Stratify theme from various viewpoints Select a problem from the stratification of them Identify the customer’s valid requirements Write a clear problem statement Utilize the data to establish the target Helpful Tools/ Techniques Checksheet Histogram Pareto Chart Control Chart Graphs Checkpoints 5. Theme was stratified from various viewpoints and a significant problem was chosen. 6. Stakeholder and/or customer valid requirements were used in target setting. 7. The impact of the target on theme indicator was determined. 8. A problem statement that addressed the gap between the current and targeted values was developed.

3 Objective Identify and verify the root causes of the problem. Key Activities • Perform cause and effect analysis on the problem • Continue analysis to the level of actionable root causes • Select the root causes with probable greatest impact • Verify the selected root causes with data Helpful Tools/ Techniques Cause & Effect Diagram Checksheet Pareto Chart Histogram Graphs Scatter Diagram Checkpoints 9. 10. 11. 12. Cause and effect analysis was taken to the root level. Root causes were taken to an actionable level. Potential root causes most likely having the greatest impact on the problem were selected. Data were used to verify the root causes.

4 Objective Develop and implement countermeasures to eliminate the verified root causes of the problem. Key Activities • Develop and evaluate potential countermeasures that: • Attack verified root causes • Meet customer’s valid requirements. • Prove to be cost beneficial • Develop an action plan that: • Answers who, what, when, and where & how • Reflects the barriers and aids needed to succeed • Obtain cooperation and approvals • Implement countermeasures Helpful Tools/ Techniques Cost-benefit Analysis Countermeasure Matrix Barriers and Aids Action Plan Checkpoints 13. Selected countermeasures addressed verified root causes. 14. The method for selecting the appropriate practical methods was clear and considered effective and feasible. 15. Barriers and aids were determined for countermeasures worth implementing. 16. The action plan answered who, what, when, where, and how.

5 Objective Confirm that the countermeasures taken impacted the root causes, the problem, and theme; and that the target has been met. Key Activities • Confirm the effects of the countermeasures by checking to see if the root causes have been reduced. • Compare the problem before & after using the same indicator. • Compare the results obtained to the target. • Implement additional countermeasures, if results are not satisfactory Helpful Tools/ Techniques Histogram Pareto Chart Control Chart Graphs (Before/After) Checkpoints 17. Verified root causes have been reduced by the countermeasures. 18. The effect of countermeasures on the problem was demonstrated. 19. The improvement target was achieved and causes of significant variation were addressed. 20. The effect of countermeasures on theme indicator representing the stakeholder’s need was demonstrated.

6 Objective Prevent the problem and its root causes from recurring. Maintain and share the gains. Key Activities • Assure countermeasures become part of daily work. • Create/ revise the work process • Create/ revise standards • Develop Poka Yoke Devices • Train employees on revised process and/or standards and explain need. • Establish periodic checks with assigned responsibilities to monitor countermeasures. • Consider areas for replication. Helpful Tools/ Techniques Control System Control Chart Graphs Procedure Training Checkpoints 21. A method was established to document, permanently change, and communicate the revised process or standard. 22. Responsibility was assigned and periodic checks scheduled to ensure compliance with the revised process or standard. 23. Specific areas for replication were identified.

7 Objective Plan what is to be done about any remaining problems and evaluate the team’s effectiveness. Key Activities • Analyze and evaluate any remaining problems. • Plan further actions if necessary. • Review lessons learned related to problem solving skills & group dynamics (team effectiveness): • What was done well? • What could be improved? • What could be done differently? Helpful Tools/ Techniques Action Plan P-D-C-A Checkpoints 24. Any remaining problems of theme were addressed. 25. Lessons learned, P-D-C-A of the QI Story process, and team growth were assessed and documented. A P C D

Six Sigma - 6

Six Sigma: 6 l l Leadership and Commitment “This is not about sloganeering or bureaucracy or filling out forms. It finally gives us a route to get to the control function, the hardest thing to do in a corporation. ” – - Jack Welch

Six Sigma: 6 l l l a performance measure a business objective or goal a statistic a philosophy a strategy a methodology

Six Sigma: 6 l l l What is Six Sigma? “Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company's operational performance by identifying and eliminating ‘defects’ and waste in manufacturing and servicerelated processes. Commonly defined as 3. 4 defects per million opportunities, Six Sigma can be defined and understood at three distinct levels: metric, methodology and philosophy…” Defines “World-class”

Six Sigma: 6 History l l l l l early 1800’s - Carl Frederic Gauss – Gaussian Distribution = Normal Curve = Bell curve 1920’s - Walter Shewhart – Control Charts, ± 3 (99. 73%) ; 2 Types of Variation: Common Cause and Special mid 1940’s/50’s – Deming and the war effort; Japan & SPC early 1980’s – Process capability indices popular– Cp, Cpk mid to late 1980’s – Six Sigma is born: Bill Smith (Engineer), Dr. Mikal Harry (Statistician) & Rich Schroeder (Executive), Motorola – manufacturing focus (“Six Sigma” – federally registered trademark of Motorola) 1994 – “Six Sigma Academy” founded by Dr. Harry; Asea Boveri Brown (Rich Schroeder) one of first clients mid 1990’s – CEO Larry Bossidy of Allied Signal/Honeywell (Rich Schroeder) – enterprise focus: all business processes 1996 – CEO Jack Welsh, GE hires Six Sigma Academy late 1990’s books, consulting, training, lectures, conferences, “Certifications” 2001 - first ASQ Certified SSBB exam

Six Sigma: 6 Roots

Problem-solving / Process Improvement Models

Six Sigma Methodologies l DMAIC Define the project goals, scope and customer (internal and external) deliverables (requirements, expectations…) Measure the process to determine current performance; id input AND output variables Analyze and determine the root cause(s) of the defects; relationships between input and output variables Improve the process by eliminating defects; experiment to establish cause-effect relationships Control future process performance; placed on inputs NOT outputs (e. g. inspection)

Toolbox for Six-Sigma Quality Improvement l l Product/process design and reliability Measurement Process control Process improvement l Elementary statistics – e. g. “ 7 QC Tools” Advanced statistics – e. g. DOE l Communication and Teamwork l

The Seven QC Tools l l l l Flowcharts Check sheets Histograms Cause-and-effect diagrams Pareto diagrams Scatter diagrams Control/Run charts

Six Sigma Tools l Tools Used for DMAIC § Define - Flow Chart; Value Stream Map; QFD (House of Quality) § Measure - Measurement System Analysis / R&R Study § Analyze - QC tools (histogram, Pareto analysis, control charts) first, then Design Of Experiments (DOE) if necessary § Improve - DOE; Action Plan = Accountability § Control - Control Plan; Poka-yoke; Preventive Maintenance; Control Charts; Audits; Assessments…

Six Sigma: 6 A Measurement l 6 = 3. 4 PPM = World-Class l Parts Per Million Opportunities (ppm) l Defects or Errors per Million Opportunities (dpmo) l Returns per Million Units Shipped

“Six Sigma” Quality Ensuring that process variation is half the design tolerance (Cp = 2. 0) while allowing the mean to shift as much as 1. 5 standard deviations.

Six Sigma: 6 l l l l How is it Different…? Six Sigma is more a business strategy than a quality program Rigorous, disciplined statistical problem solving Dedication of varied resources to the task of continuous performance improvement of ANY process Voice of the customer drives the business and improvement Pragmatic training with real applications Quantifiable, bottom-line returns

Six Sigma: 6 Results l “By integrating project management, problem solving, and statistical tools, our Six Sigma methodology has achieved documented savings in excess of $16 billion over 12 years in Motorola. ” – - Motorola web site l GE saved $12 billion over 5 years and added $1 to its earnings per share l Honeywell (Allied Signal) saved $800 million

Lean Six Sigma Roadmap

Six Sigma: 6 “Belts” l l Master BB – full-time; assigned to a specific area/function; strategic implementation; “teachers” Black Belt – full-time; lead projects (4 -6/year); coach Green/Yellow belts – ASQ Certification l Green – part-time; assigned to a project / team; directed by BB; may lead a small project / team l Yellow – part-time; beginner; trainee l Differences lie in the BOK, role, duration of training & experience and demonstrated ability

Lean Manufacturing Overview

Outline l l l Lean Manufacturing 5 S & Visual Controls Kaizen Value Streams Pull Manufacturing Mistake Proofing Quick Changeover Six Sigma Lean Accounting Theory of Constraints Human Factors

Definitions l Value - A capability provided to a customer at the right time at an appropriate price, as defined in each case by the customer. Features of the product or service, availability, cost and performance are dimensions of value. l Waste - Any activity that consumes resources but creates no value (waste).

What is Lean? l l Lean production focuses on eliminating waste in processes (i. e. the waste of work in progress and finished good inventories) Lean production is not about eliminating people Lean production is about expanding capacity by reducing costs and shortening cycle times between order and ship date Lean is about understanding what is important to the customer

Benefits l l Lean provides tangible benefits Reduces costs not just selling price – – – l l l Reduces delivery time, cycle time, set-up time Eliminates waste Seeks continuous improvement Improves quality Improves customer ratings and perceptions Increases overall customer satisfaction Improves employee involvement, morale, and company culture Helps “transform” manufacturers

Toyota Production System (TPS) l Quality, Cost, Delivery – l Just In Time – – l The Right Part at the Right Time in the Right Amount Continuous Flow Pull Systems Level Production Built-In Quality – – l Shorten Production Flow by Eliminating Waste Error Proofing – Poka Yoke Visual Controls Operational Stability – – Standardized Work Robust Products & Processes Total Productive Maintenance Supplier Involvement

Types of Waste l l l l Overproduction Excess inventory Defects Non-value added processing Waiting Underutilized people Excess motion Transportation

Lean vs. Traditional Manufacturing l l l l Half the hours of engineering effort Half the product development time Half the investment in machinery, tools and equipment Half the hours of human effort in the factory Half the defects in the finished product Half the factory space for the same output A tenth or less of in-process inventories Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.

Lean vs. Traditional Manufacturing l l l l l 99. 9% Customer Schedule Attainment Defects of 15 PPM or less 4 -6 Inventory Days of Supply 92%+ Operational Availability Leveled, Sequenced Production Order to Customer Use - Hours, not weeks Functioning Supplier Partnership Strong Production Control Function Examples: Tier 1 Suppliers: Johnson Controls Seating, Litens Automotive Partnership, Cadimex, Denso Manufacturing, Toyota Motor Corporation.

5 S & Visual Control

5 S and Visual Control – – – – – 5 Elements of 5 S Why 5 S? Waste Workplace observation Sort Straighten Shine Standardize Sustain Visual Factory

5 Elements of 5 S Sort l Straighten l Shine l Standardize l Sustain l

Waste Identification l What waste can be identified in the following photos?

After 5 S l l Clear, shiny aisles Color-coded areas l l Slogans & banners No work in process

Kaizen

What is Kaizen? l l l Kaizen (Ky’zen) “Kai” means “change” “zen” means “good (for the better)” Gradual, orderly, and continuous improvement Ongoing improvement involving everyone

How to Kaizen l l Identify the customer Deming Cycle – Plan – identify what to change and how to do it l l l – – Current state Future state Implementation plan Do – execute the improvement Check – ensure the improvement works Act – future and ongoing improvements Repeat

Value Streams

Outline l l l l What are Value Streams? Identifying the Value Streams Value Stream Mapping The Current State The Future State Implementing Change Roadblocks

What Are Value Streams? A Value Stream is the set of all actions (both value added and non value added) required to bring a specific product or service from raw material through to the customer.

Value Stream Mapping l l l Helps you visualize more than the single process level Links the material and information flows Provides a common language Provides a blueprint for implementation More useful than quantitative tools Ties together lean concepts and techniques

The Current State

The Current State l Typical Results – – – 80 – 90% of total steps are waste from standpoint of end customer. 99. 9% of throughput time is wasted time. Demand becomes more and more erratic as it moves upstream, imposing major inventory, capacity, and management costs at every level. Quality becomes worse and worse as we move upstream, imposing major costs downstream. Most managers and many production associates expend the majority of their efforts on hand-offs, work-arounds, and logistical complexity.

The Future State l l Completed in a day with the same team Focused on: – – Creating a flexible, reactive system that quickly adapts to changing customer needs Eliminating waste Creating flow Producing on demand

The Future State

Pull Manufacturing

Outline l l l l Why Pull Manufacturing? The Problem of Inventory Just In Time Kanban One Piece Flow Demand / Pull Standard Work & Takt Time Production Smoothing

Push Vs. Pull Scheduling l Push Scheduling – – – l traditional approach “move the job on when finished” problems - creates excessive inventory Pull Scheduling – – – coordinated production driven by demand (pulled through system) extensive use of visual triggers

Inventory Hides Problems Work in process inventory level (hides problems) Unreliable Vendors Scrap Capacity Imbalances

Objective of JIT l l l Produce only the products the customer wants Produce products only at the rate that the customer wants them Produce with perfect quality Produce with minimum lead time Produce products with only those features the customer wants

JIT Principles l Create flow production – – – – one piece flow machines in order of processes small and inexpensive equipment U cell layout, counter clockwise multi-process handling workers easy moving/standing operations standard operations defined

Pull System Production Schedule Customers A Leveled assembly instructions C A B A Fab Vendor Sub Final Assy Sub Vendor . .

Mistake Proofing (Poka Yoke and Error Proofing)

Outline l l l What is Mistake Proofing? Everyday Examples Effectiveness Error Proofing and SPC Inspection Techniques Types of Poka Yokes

What is Mistake Proofing? l l l The use of process or design features to prevent errors or their negative impact Also known as Poka yoke, Japanese slang for “avoiding inadvertent errors” which was formalized by Shigeo Shingo Inexpensive Very effective Based on simplicity and ingenuity

Everyday Examples 3. 5 inch diskettes cannot be inserted unless diskette is oriented correctly. This is as far as a disk can be inserted upside-down. The beveled corner of the diskette along with the fact that the diskette is not square, prohibit incorrect orientation. Fueling area of car has three error-proofing devices: 1. insert keeps leaded-fuel nozzle from being inserted 2. tether does not allow loss of gas cap 3. gas cap has ratchet to signal proper tightness and prevent overtightening. New lawn mowers are required to have a safety bar on the handle that must be pulled back in order to start the engine. If you let go of the safety bar, the mower blade stops in 3 seconds or less.

Source: Productivity Inc. and Shingo prize profiles l l l AT&T Power Systems is first US manufacturer to win the Deming prize. Average outgoing defects reduced by 70%. A washing machine drain pipe assembly line produced 180, 000 units without a single defect (6 months). TRW reduced customer PPM’s from 288 to 2. Federal Mogul: 99. 6% less customer defects and 60% productivity increase DE-STA-CO: reduced omitted parts 800 to 10 ppm with a 15 -30% productivity increase.

Mistake Proofing ROI l l l Dana corporation has reported a $500, 000 savings resulting from a $6 device. Ortho-Clinical Diagnostics (Johnson & Johnson) saved $75000 annually by discovering a new use of Post-It® notes. AT&T Power Systems (Lucent Technologies) reported net saving of $2545 per device (3300 devices). Weber Aircraft reports saving $350, 000 during their first year of implementation of approximately 300 devices. GE Aircraft Engines spends a minimum of $500, 000 on any inflight shut-down (IFSD). Spending $10, 000 to stop one IFSD yields 50: 1 benefit.

What Causes Defects? l l l 1. 2. 3. 4. 5. Poor procedures or standards. Machines. Non-conforming material. Worn tooling. Human Mistakes. Except for human mistakes these conditions can be predicted and corrective action can be implemented to eliminate the cause of defects

Poka yoke l l Mistake-proofing systems Does not rely on operators catching mistakes Inexpensive Point of Origin inspection Quick feedback 100% of the time

Common Mistake proofing Devices l l l Guide Pins Blinking lights and alarms Limit switches Proximity switches Counters Checklists

Quick Changeover Single Minute Exchange of Dies

Single Minute Exchange of Dies l Internal set-up activities. – l Elements in the changeover which can only be done when the machine is stopped. External set-up activities. – Elements that can be performed when the machine is running.

Now YOU are the Expert l l l TQM Six Sigma Lean Manufacturing More than what you wanted to know!