GE Capital - Lean

Embed Size (px)

Citation preview

  • 7/28/2019 GE Capital - Lean

    1/70

    1 /GE Proprietary Information

    LEAN WorkshopOctober 2006

    Sharon Garavel, SVP Quality & OperationsRaj Wadehra, Lean & Originations Process Leader

    Ryan McMillian, ACFC Lean Leader

    GECapital Solutions

    GE PROPRIETARY INFORMATIONThe information contained in this document is disclosed in confidence to GEcustomers/partners. It is the property of the General Electric Company andshould be used only within your company this notice shall appear on anyreproduction, in whole or in part. It should not be disclosed to others withoutthe expressed written consent of the General Electric Com

    pany.

  • 7/28/2019 GE Capital - Lean

    2/70

    2 /GE Proprietary Information

    LEAN Workshop Agenda

    Change Management at GE Sharon Garavel

    LEAN Principles Raj Wadehra

    LEAN for Knowledge Flow Raj Wadehra

    LEAN for Manufacturing Ryan McMillian

    Launching LEAN at GE Sharon Garavel

  • 7/28/2019 GE Capital - Lean

    3/70

    3 /GE Proprietary Information

    Strategy & Growth:IBs, CECOR, Lean, Customer Centric, Execution

    Work-Out / Town Meetings:Empowerment, action Expert-Driven Decision-Making, Action Work-Outs, Customized Work-Outs

    Productivity / Best Practices:Benchmarking External Organizations, Sharing Best Practices

    Process Improvement:Process-mapping, re-engineering, Bullet Train Approach

    Change Acceleration Process (CAP):Increase success and accelerate change

    Key Strategic Initiatives:QMI*, NPI*, OTR*, SP*, Productivity, Globalization

    Make Customers Winners:GE Tool-Kit

    Six Sigma Quality:

    Productivity, Span, Data-Driven Decision-Making

    Digitization:Sell, Buy, Make using Technological Tools

    ACFC (At the Customer For the Customer):Faster, Better, Closer to the Customer

    Imagination at Work:Imagine, Solve, Build, Lead

    * New Product Introduction, Quick Market Intelligence, Orderto Remittance, Supplier Partnership

    1989

    GEs change culture:A Continuing Journey

    Using Change as a Strategic andCompetitive Advantage

    Optimizing ChangeEffectiveness

    Building a Culture thatDrives Change

    1992

    1996

    1998

    2000

    2003

    2004

    Lean Six SigmaSpeed & Quality2005

  • 7/28/2019 GE Capital - Lean

    4/70

    4 /GE Proprietary Information

    Lean Six Sigma

    Lean Doesnt Replace Six Sigma But Complements It

    Same Goal = Continuous Process Improvement for

    Growth & Customer

    - Business Process Ys: NPI, ITO, OTR

    Lean

    Reduce Waste

    Decrease Cycle Time to increasecapacity and customer loyalty

    Continuous Process Improvement

    Intuitive and proven solutions

    Six Sigma

    Defect Reduction

    Remove variability to increaseoutput and customer loyalty

    Control keeps process defect free

    Need Analytics to Find Problem

  • 7/28/2019 GE Capital - Lean

    5/70

    5 /GE Proprietary Information

    1995

    GE Launches Six SigmaThroughout Company

    Focus :

    Core Activities

    Objective :

    Productivity & AssetUtilization

    Evolution Of LEAN Six Sigma At GE

    PRODUCTIVITY

    Evolution

  • 7/28/2019 GE Capital - Lean

    6/70

    6 /GE Proprietary Information

    1997

    GE Turns to Six Sigma ForNew Products

    Focus :

    New Product Design

    Objective :

    World Class Capability in theMarket Place

    Evolution Of LEAN Six Sigma At GE

    PRODUCTIVITY

    Evolution

    PRODUCT DESIGN

  • 7/28/2019 GE Capital - Lean

    7/70

    7 /GE Proprietary Information

    1999

    GE Turns Six Sigma Looseat the Customer

    Focus :

    Customer Productivity& Value Added Services

    Objective :

    Revenue Growth & Share Shift

    PRODUCTIVITY

    Evolution

    PRODUCT DESIGN

    CUSTOMER FOCUS

    Evolution Of LEAN Six Sigma At GE

  • 7/28/2019 GE Capital - Lean

    8/70

    8 /GE Proprietary Information

    2001Six Sigma LeadershipCritical to Success

    Focus :

    Developing Future Six SigmaLeaders

    Objective :

    Common Company WideTraining & Certification

    PRODUCTIVITY

    Evolution

    PRODUCT DESIGN

    CUSTOMER FOCUS

    THE WAY WE WORK

    Evolution Of LEAN Six Sigma At GE

  • 7/28/2019 GE Capital - Lean

    9/70

    9 /GE Proprietary Information

    2003

    Enabling Growth

    Focus :NPI, ITO, OTR, ACFC

    Objective :

    Improve/Digitize KeyProcesses & Free UpResources for Growth

    PRODUCTIVITY

    Evolution

    PRODUCT DESIGN

    CUSTOMER FOCUS

    THE WAY WE WORK

    ENABLE GROWTH

    Evolution Of LEAN Six Sigma At GE

  • 7/28/2019 GE Capital - Lean

    10/70

    10 /GE Proprietary Information

    Enabling Growth

    PRODUCTIVITY

    Customer Focus

    PRODUCT DESIGN

    CUSTOMER FOCUS

    THE WAY WE WORK

    ENABLE GROWTHENABLE GROWTH

  • 7/28/2019 GE Capital - Lean

    11/70

    11 /GE Proprietary Information

    Net Promoter Score (NPS)

    Links Customer Loyalty to Business Performance

    Drives growth through improved customer focus

    On a scale of 0 -10, how willing would you

    be to recommend GE to a colleague?

    % Promoters%

    Detractors

    0 6Detractors

    7 - 8PassivelySatisfied

    9 - 10

    Promoters

    10

    987

    654321

    % Net

    Promoters

    0

  • 7/28/2019 GE Capital - Lean

    12/70

    12 /GE Proprietary Information

    LEAN Principles

  • 7/28/2019 GE Capital - Lean

    13/70

    13 /GE Proprietary Information

    Batch vs. Flow Simulation

    Batch Processing

    First person writes their name on all post-it notes. When finished signing every post-it in the

    packet they hand off to the next person.

    Then 2nd person writes their name on all post-it notes and hands complete batch to the next

    person.

    Continue until last person has finished signing all post-it notes.

    Flow Processing

    First person writes their name on one post-it notes and hands to second person as soon as

    theyve finished signing one post-it.

    While the second person is signing the 1st post-it, the first person begins signing the 2nd post-it

    note.

    Continue until last person has finished signing all post-it notes.

  • 7/28/2019 GE Capital - Lean

    14/70

    14 /GE Proprietary Information

    What Is LEAN?

    Defines Value from the Customers perspective.

    The relentless pursuit of the perfect process through

    Waste Elimination.

    Minimize Material or Information Flow Time from Startto Finish Process/Goods.

    All we are doing is looking at a time line from the momentthe customer gives us an order to the point when we collectthe cash. And we are reducing that time line by removingthe non-value added wastes

    Taiichi Ohno

  • 7/28/2019 GE Capital - Lean

    15/70

    15 /GE Proprietary Information

    Understanding & Eliminating Waste

    Lean can deliver impactto nearly any process

    After

    Before

    Work: Value

    added time

    Reduced cycle times Better delivery More capacity Better quality Higher productivity

    Driving improved

    customer satisfaction

    Wait time/waste:

    Non-value added time

    Cycle time or lead time

    Cycle time or lead timeLean

    attacks

    waste

    here

  • 7/28/2019 GE Capital - Lean

    16/70

    16 /GE Proprietary Information

    Why LEAN?

    >Employ proven tools to eliminate waste, manage variability, andsynchronize flows

    >Deploy cross-functional problem-solving teams throughout theorganization, driving to measurable, actionable solutions

    Improve

    performance

    Eliminate waste >Deliver exactly what customers need exactly when and where they need it>Eliminating all that does not add value in the eyes of the customer

    Change the

    culture

    >Reinforce a performance culture and sense of urgency; learn by doing>Tied to clear goals, and real consequences

    Grow the

    business

    >Optimize service, cost, and asset productivity>Segment, integrate, and accelerate information flows throughout the

    business

  • 7/28/2019 GE Capital - Lean

    17/70

    17 /GE Proprietary Information

    Jidoka

    TOYOTA

    Just-in-T

    ime

    Single Piece Flow

    Pull Production

    TAKT TimeProduction

    Autonomation

    Built-In Quality

    Stopping atAbnormalities

    Level Loading

    Sequencing

    Stability

    Heijunka

    ToyotaProduction System

    Toyota Production System

    People

    People

    People

  • 7/28/2019 GE Capital - Lean

    18/70

    18 /GE Proprietary Information

    What is Heijunka?

    Heijunka is the foundation of the Toyota Production system, and is the

    process of leveling and sequencing an operation.

    There are three main elements of Heijunka

    2. Leveling: Overall leveling of a process to reduce variation in output

    3. Sequencing: Managing the order in which work is processed (Mixed Production)

    4. Stability or Standard Work: Reduce process variation

    Heijunka

    Customer Demand Leveling

    TPS House - Heijunka

  • 7/28/2019 GE Capital - Lean

    19/70

    19 /GE Proprietary Information

    There are two main elements of Jidoka2. Autonomation: Automation with human intelligence operate autonomously

    3. Stop at Every Abnormality

    What is Jidoka?

    Jidoka allows machines/processes to operate autonomously by shutting

    down automatically if an abnormality occurs. This prevents defective

    products from passing to the next process.

    Normal Abnormal

    TPS House - Jidoka

  • 7/28/2019 GE Capital - Lean

    20/70

    20 /GE Proprietary Information

    There are three main elements of JIT1. Single Piece Flow: Completing the process from start to finish continuously.

    2. Pull Production: A system in which each process takes what it needs from the preceding

    process when it needs it and in the exact amount needed

    3. TAKT Time: Available time / required output (actual or forecasted demand )

    e.g. 1 shift = 1980 min/wk, forecast = 198 units/wk

    TAKT Time = 1980 min/wk / 198 units/wk = 10 min/unit

    What is Just-in-Time?Just-in-Time provides the customer what is needed, when it is

    needed, in the quantity it is needed.

    TPS House - JIT

  • 7/28/2019 GE Capital - Lean

    21/70

    21 /GE Proprietary Information

    Continuous movement of products,

    services & information from end to

    end through the process

    Nothing is done by the upstream

    process until the downstream

    customer signals the need

    Complete elimination of waste so all

    activities create value for the

    customer by continuous improvement

    Define value from the customers

    perspective and express value in

    terms of a specific product

    Map all of the stepsvalue added &

    non-value addedthat bring a

    product or service to the customer

    3

    Establish Flow

    4Implement Pull

    5Work to

    Perfection

    1Specify Value

    2Map the

    Value Stream

    Lean Thinking Principles

  • 7/28/2019 GE Capital - Lean

    22/70

    22 /GE Proprietary Information

    1. Specify Value

    Typical Process: 5-10%

    Activities Value-Adding

    Value Added Activity

    Any activity that changes the form, fit, or function of

    materials or information to meet customer requirements

    - OR - something customers are willing to pay for

    Non-Value Added ActivityAdds no value to the

    customer.simply raises

    costs in our business!

    Incidental Work

    Does not add value, but

    required by the business

    (eg. Taxes)

    Value can only be defined by customer

    Product Flow: Value changes the form, fit and function of the product.

    Knowledge Flow: Value adds necessary knowledge or information.

  • 7/28/2019 GE Capital - Lean

    23/70

    23 /GE Proprietary Information

    2. Identify the Value Stream

    OTR

    Most Value Streams have less than 5% Value Add Time

    The VALUE STREAMis a time series of all activities &

    steps (both value add and non-value add) requiredto bring a product or service to the customer

    TheVALUE STREAMcuts across functional

    Boundaries

    GE focuses on 3 mainVALUE STREAMS

    New Product

    Introduction

    Inquiry to Order Order to Remittance

    ITONPI1 2 3

  • 7/28/2019 GE Capital - Lean

    24/70

    24 /GE Proprietary Information

    2. Identify the Value StreamCurrent State

    Future State

    A 2 hours process is taking us 63 days!

    Goal: Reduce 63 day lead time to 27 days!

    6-9 Month Roadmap

    Typical Cycle Time Improvements > 50%

  • 7/28/2019 GE Capital - Lean

    25/70

    25 /

    GE Proprietary Information

    3. Flow

    A B C A B C

    Batch Production Flow Production

    5 Orders

    3 Process Steps

    1 Hour per order/operation

    Operator 1 Operator 2 Operator 2

    5 Hours 5 Hours 5 Hours+ +

    Time for First Order = 15 Hours

    Time for Last Order = 15 Hours

    Time for First Order = 3 Hours

    Time for Last Order = 7 Hours

  • 7/28/2019 GE Capital - Lean

    26/70

    26 /

    GE Proprietary Information

    4. Pull Customer initiates business process

    Produce only what is required by the customer

    Each step in the process takes the product and adds knowledge it needs, as

    it is needed

    No action is taken until the downstream process initiates it to prevent

    batches and queues

    supplier customer

    One more

    please!Okay

  • 7/28/2019 GE Capital - Lean

    27/70

    27 /

    GE Proprietary Information

    5. Improve To Perfection

    Goal: perfect process

    Tools allow you to see & eliminate waste

    There is always more waste

    True continuous improvement philosophy

    The perfect process is a continuous flowof customer value add, without interruption

    Current State

    Future State

    Next Future State

    Original State

  • 7/28/2019 GE Capital - Lean

    28/70

    28 /

    GE Proprietary Information

    Over ProcessingWaiting

    Motion

    InventoryMoving Things

    Overproduction

    Defects/Inspection

    Waiting Transportation

    Overproduction

    Inventory

    The Seven Types Of Waste

  • 7/28/2019 GE Capital - Lean

    29/70

    29 /

    GE Proprietary Information

    Value Stream Mapping

  • 7/28/2019 GE Capital - Lean

    30/70

    30 /

    GE Proprietary Information

    TOTAL VALUE STREAM

    SUPPLIERS YOUR PROCESS CUSTOMER

    What Is A Value Stream?

    A value stream shows all the tasks (Value and Non-Value) required tobring a product, service, or capability from start to customer delivery

    Value streams cut across functional boundaries

    Most value streams have ~5% value add time (rest is waiting time)

  • 7/28/2019 GE Capital - Lean

    31/70

    31 /

    GE Proprietary Information

    Value Stream Maps (VSM)

    Customer focused

    Look at the end-to-end value stream

    Helps us to visualize flow

    Helps see waste and its source

    Becomes the blueprint for improvement

    Shows the linkage between information

    and physical flows

    Reality Map

    Traditional Process Maps

    Functional Focused

    Varies in scale from Macro to Micro functions

    Used to understand the steps in a process

    No value judgments made

    Used for continuous improvement, business

    planning, scoping or establishing boundaries

    of what and where

    Planned Map

    Value Stream Maps vs. Process Maps

    i l

  • 7/28/2019 GE Capital - Lean

    32/70

    32 /

    GE Proprietary Information

    Sales locatesdecision and

    sends tocustomer

    Process BoxA point in the value stream at which flow stops andinventory has the opportunity to accumulate

    Enter Deal IntoAuto-

    Decisioningtool

    Submit creditinfo to CreditDepartment

    1. Add process steps

    Creating a Current State Value Stream Map

    Customerreceives credit

    decisionnotification

    1. Define Start and Stop Points

    Customer callsand provides

    credit applicationinformation

    1. Collect Data

    Daily demand

    Process Time

    Inventory

    Yield

    Daily demand

    Process Time

    Inventory

    Yield

    Daily demand

    Process Time

    Inventory

    Yield

    Daily demand

    Process Time

    Inventory

    Yield

    Daily demand

    Process Time

    Inventory

    Yield

    1. Map information flows

    PARTNER RIGHTFAX EXPERIAN/

    EQUIFAX

    LEGACY

    SYSTEMS

    GENPACT PARTNER

    1. Create cycle time ladder

    5 Mins 0.2 Min 1 Min 7 Min 1 Min

    1 Mins 40 Mins 90 Mins ~240 Min

    Processing Time 14 mins

    Typical Cycle Time 370 MinsTrain sales

    to enter

    deals

    1. Identify the Waste

    W

    ~240 Min

    W

    40 Mins

    W90 Mins

  • 7/28/2019 GE Capital - Lean

    33/70

    33 /

    GE Proprietary Information

    Future State VSM Mapping

    Future state map is the desired next stage in thecontinuous improvement journey.

    Once we reach the desired next stage, future state map

    will become the current state map and a new futurestate map should be created so that we keep moving

    closer to perfection

  • 7/28/2019 GE Capital - Lean

    34/70

    34 /

    GE Proprietary Information

    Creating The Future State

    Where can I eliminate process steps entirely?

    Where can I combine steps & create flow?

    Where do I need to create pull?

    Where can I execute process steps in parallel (or move processes from

    critical path)

    Which steps are creating waste for other steps in the process?

    Fundamental questions to ask

    No large IT projects (think excel macros not ERP systems)

    No capital outlay No additional resources (resource re-allocation is OK)

    Realistic: needs to be completed within 3-9 monthsCONTRAIN

    TS

  • 7/28/2019 GE Capital - Lean

    35/70

    35 /

    GE Proprietary Information

    Defining Action Workout Teams

    current state

    future state

    Kaizen

    Team #1

    Kaizen

    Team #3

    KaizenTeam #2

    KaizenTeam #4

  • 7/28/2019 GE Capital - Lean

    36/70

    Value Stream Map Utilization

    Ryan McMillianACFC Lean Leader

    Effectively Analyzing a

    VSM to Improve the

    Manufacturing Process

  • 7/28/2019 GE Capital - Lean

    37/70

    37 /

    GE Proprietary Information

    Eliminate Waste

    A Focused Strategy to:

    Increase Speed

    Simplify the Process

    Reduce Variation

    Consistently Meet Customer Requirements

    Scope of LEAN In Manufacturing?

    Reduce Cost

    All we are doing is looking at a time line from the moment thecustomer gives us an order to the point when we collect the

    cash. And we are reducing that time line by removing the

    non-value added wastes

    Taiichi Ohno

    Th V l f V l St M

  • 7/28/2019 GE Capital - Lean

    38/70

    38 /

    GE Proprietary Information

    The Value of a Value Stream Map

    Free RideAirlines

    2 shifts

    Tote = 20 parts

    38,000 pcs/mo-20,000 LB-18,000 SB

    Daily

    Daily

    Forging Vender

    6-weekForecast

    90/60/30 dayForecast

    ProductionControl

    DailyOrder

    Daily Schedule

    Long Set upOXOX

    Issue Cutting Laser Finish Final & Ship

    C/T=5.5 min

    C/O=0 min.

    3 SHIFTS

    0% SCRAP

    VA= .5 min

    Up Time = 100%

    C/T=120 min

    C/O=240 min

    3 SHIFTS

    10% SCRAP

    VA=7 min

    Up Time = 80%

    C/T=1445 min

    C/O=15 min.

    3 SHIFTS

    5% SCRAP

    VA=5 min

    Up Time = 98%

    C/T=2880 min

    C/O=0 min.

    3 SHIFTS

    0% SCRAP

    VA=1500 min

    Up Time = 99%

    C/T=720 min

    C/O=0 min.

    3 SHIFTS

    1% SCRAP

    VA=72 min

    Up Time = 100%

    1900pieces

    I1900 pieces LB1900 pieces SB2 days

    I19 piecesLB

    2880 min

    .5 min

    5 min

    7 min

    5 min

    5 min

    1440 min

    1440 min

    1440 min

    720 min 2172 min

    5770 min

    62% Queue

    1900pieces

    FlowProblems

    Too MuchInventory

    HighScrap

    Long Set up

    MachineIssues

    Cutting

    C/T=120 min

    C/O=240 min

    3 SHIFTS

    10% SCRAP

    VA=7 min

    Up Time = 80%

    k h

  • 7/28/2019 GE Capital - Lean

    39/70

    39 /

    GE Proprietary Information

    36 /GE A CFC -L e a n /

    8/25/2006

    Stop @

    Abnormality

    Takt TimeProduction

    Single Piece

    Flow

    Pull

    Production

    Autonomation

    SequencingLeveling

    THE HOUSE OF TOYOTATHE HOUSE OF TOYOTA

    JIT Jidoka

    Heijunka

    TPS

    VSM & TPS Work Together

    VSM Helps Identify Current State and Prioritizean Improvement Plan

    TPS are Tools for Improvement

  • 7/28/2019 GE Capital - Lean

    40/70

    40 /

    GE Proprietary Information

    Cutting

    C/T=120 min

    C/O=240 min

    3 SHIFTS

    10% ReworkVA= 7 min

    Up Time=80%

    Breaking Down Value Stream Map

    Cycle Time

    Value Added

    Change Over Time

    Process Up Time

    Defect Rate

  • 7/28/2019 GE Capital - Lean

    41/70

    41 /

    GE Proprietary Information

    C/T=120 min

    C/O=240 minC/O=240 min3 SHIFTS3 SHIFTS

    10% Rework10% ReworkVA= 7 min

    Up Time=80%Up Time=80%

    Breaking Down VSM Flow

    Cycle Time

    Value Added

    ToolsSpaghetti Chart

    5SStandard Work

    Cell Formation

    Cutting

    h h

  • 7/28/2019 GE Capital - Lean

    42/70

    42 /

    GE Proprietary Information

    Previous Flow Chart New Flow Chart

    1

    3

    4

    2

    5

    6

    7

    8

    12

    34

    Spaghetti Chart

  • 7/28/2019 GE Capital - Lean

    43/70

    43 /

    GE Proprietary Information

    5S Workout

    Before

    After

    Ensure that the workplace

    contains only what is needed,when it is needed and where it is

    needed

    Quickly, any abnormalities can

    be detected

    Minimal time is spent on non-

    value added activities A way to see and eliminate

    waste

    5S I t

  • 7/28/2019 GE Capital - Lean

    44/70

    44 /

    GE Proprietary Information

    Planning

    Tools

    Material

    Cart

    5S Improvement

    S Fl I t

  • 7/28/2019 GE Capital - Lean

    45/70

    45 /

    GE Proprietary Information

    Old Process 2 Hours

    Tools Spaghetti Chart, 5S

    Results 12 minutes

    Summary Flow Improvement

  • 7/28/2019 GE Capital - Lean

    46/70

    46 /

    GE Proprietary Information

    C/T=120 minC/T=120 min

    C/O=240 min.3 SHIFTS3 SHIFTS

    10% Rework10% ReworkVA= 7 minVA= 7 min

    Up Time=80%Up Time=80%

    Breaking Down VSM Setup

    Change Over Time

    ToolsSetup Reduction

    Cutting

    d i

  • 7/28/2019 GE Capital - Lean

    47/70

    47 /

    GE Proprietary Information

    Setup Reduction

    PART A

    PRODUCTION

    PART B

    PRODUCTION

    Finish part A Make and Inspect B

    SETUP

    PART A

    PRODUCTION

    PART B

    PRODUCTION

    Finish part AMake and Inspect B

    SETUP

    INTERNAL : You must shut the

    machine off to perform

    Changing chuck jaws

    Changing diesChanging insertsAdjustments to dial in

    EXTERNAL : You can perform while

    the machine is running

    Pre accumulate tooling

    Installing / replacing insertsGetting paperwork together

    Setting tool heights

    Set Up Reduction Example

  • 7/28/2019 GE Capital - Lean

    48/70

    48 /

    GE Proprietary Information

    Establish Visual Controls

    Set Up Reduction Example

    Afte

    r

    Before

    Change Over Benchmark

  • 7/28/2019 GE Capital - Lean

    49/70

    49 /

    GE Proprietary Information

    1) Internal Vs External

    2) All tools and equipmentare at arms length

    3) Standard work has beenpracticed to perfection

    4) Continuous observation and

    analysis drives continuousimprovement

    Types of Waste Eliminated Searching Finding Selecting

    Transporting Waiting

    Change Over Benchmark

  • 7/28/2019 GE Capital - Lean

    50/70

    50 /

    GE Proprietary Information

    Old Process 4 Hours

    Tools 5S, Internal to External

    Results 27 minutes

    Summary Setup Improvement

    k l

  • 7/28/2019 GE Capital - Lean

    51/70

    51 /

    GE Proprietary Information

    C/T=120 minC/T=120 min

    C/O=240 min.C/O=240 min.3 SHIFTS3 SHIFTS

    10% ReworkVA= 7 minVA= 7 min

    Up Time=80%Up Time=80%

    Breaking Down VSM Quality

    Defect Rate

    ToolsBuild Quality In

    Poka YokeSix Sigma

    Cutting

    Six Sigma Tools

  • 7/28/2019 GE Capital - Lean

    52/70

    52 /

    GE Proprietary Information

    Six Sigma Tools

    Before Process Capability After Process Capability

    Find Top Problems Pareto

    Standardize the Process

    S S t I t

  • 7/28/2019 GE Capital - Lean

    53/70

    53 /

    GE Proprietary Information

    Old Process 10% Rework

    Tools Six Sigma Analysis

    Results 0.7% Rework

    Summary Setup Improvement

    B ki D VSM M hi U Ti

  • 7/28/2019 GE Capital - Lean

    54/70

    54 /

    GE Proprietary Information

    C/T=120 minC/T=120 min

    C/O=240 min.C/O=240 min.3 SHIFTS3 SHIFTS

    10% Rework10% ReworkVA= 7 minVA= 7 min

    Up Time=80%

    Breaking Down VSM Machine Up Time

    Process Up Time

    ToolsPreventativeMaintenance

    Cutting

    i i

  • 7/28/2019 GE Capital - Lean

    55/70

    55 /

    GE Proprietary Information

    Preventative Maintenance

    Machines Deteriorate Over

    Time

    Maintenance Should Be

    Preformed in the Beginning

    Stages of Deterioration You can pay me now (with

    short daily CCO)...or pay me

    later (with poor quality, lots of

    downtime, high maintenance

    costs, etc...)

    CCO Checklist

    Badge/Date

    Machine #:

    General

    - Nuts/bolts loose, wobbly or missing?

    - Any play in moving parts or fixture mounting section?

    - Any unnecessary items on the body of the machine?

    Lubrication

    - Are oil levels correct?- Does oil reach sliding parts?

    - Any oil leaks from supply devices, pipes, fittings?

    Pneumatics

    - Pressures gages in proper range?

    - Any stop valve, ball valve leaks?

    - Air flowing through closed valves?

    Sample CCO Checklist

    l

  • 7/28/2019 GE Capital - Lean

    56/70

    56 /

    GE Proprietary Information

    Results

    Increased Capacity for Customer Growth

    Significant Cash Savings to the Business

    Old New ImprovementCycle Time (min) 120 12 90%

    Setup Time (min) 240 27 89%

    Defect Rate 10% 0.7% 93%Process Up Time 80% 100% 20%

  • 7/28/2019 GE Capital - Lean

    57/70

    57 /

    GE Proprietary Information

    Launching LEAN at GE

    d ll h d d h

  • 7/28/2019 GE Capital - Lean

    58/70

    58 /

    GE Proprietary Information

    Toyota vs.

    US auto industry

    Dell vs.

    PC industry

    Growth (CAGR)Revenue 8% vs. 3% 28% vs. 3%

    Earnings 24% vs. 0% 33% vs. 10%

    Lean focusInventory turns Every 2 hrs vs. 5 min. vs. 11 days

    NPI cycle time 30% faster

    Toyota and Dell have demonstrated thatcycle time reduction in core customer

    facing processes drives growth

    but how do we make it work for us??

    K T S At GE

  • 7/28/2019 GE Capital - Lean

    59/70

    59 /

    GE Proprietary Information

    Keys To Success At GE

    1. Select the Right Process(ITO,OTR, NPI)

    4. Select the Right Business(Showcases)

    7. Select the Right Approach

    (Lean Workshops)

    Focus On External Process To Drive Growth

  • 7/28/2019 GE Capital - Lean

    60/70

    60 /

    GE Proprietary Information

    What happens if Engines takes NPI cycle time from 24 months to 18 months?

    What happens if Healthcare can create breakthroughs in 1 year instead of 2?

    What happens if Wind responds to an order in 1 month instead of 6 months?

    What happens if Plastics can consistently respond to orders in 5 days?

    What happens if Commercial Finance can offer financing to a CFO of a mid size companyin the first meeting?

    What happens if Healthcare could propose a DI solution in the first meeting with a

    radiologist?

    Innovate Better: New Product Introduction

    Sell Better: Inquiry to Order

    Fulfill Better: Order to Remittance

    Focus On External Process To Drive Growth

    Create Excitement Through LEAN Showcases

  • 7/28/2019 GE Capital - Lean

    61/70

    61 /

    GE Proprietary Information

    LEAN Showcasesprove that cycle time reduction in

    GEs core customer-facing processes drives growth

    Criteria For Selecting Initial Lean Showcases:

    Passionate Business Leader

    Growth Impact Greater Than $50MM Revenue

    Must address at least 2 of 3 customer facing processes

    (New Product Introduction, Inquiry to Order, Order toRemittance)

    Create Excitement Through LEAN Showcases

    Lean WorkOuts Are The Perfect Tool For

  • 7/28/2019 GE Capital - Lean

    62/70

    62 /

    GE Proprietary Information

    WEEK ONE

    Draw Wing-to-wing value stream maps for innovating (NPI), selling (ITO), and/or

    fulfilling (OTR) including all relevant multi-functional participants to define future

    vision for the organization

    WEEK TWO

    Action teams implement as much as possible during the Lean WorkOut to reducecycle times

    30+ Lean Showcases Across GE In Place Today

    First transaction 63to 1 day capability

    15% additionalgrowth in 2006

    Retail Sales Finance Magnetic Resonance Quoting from 62

    days to samemeeting

    NPI from 29 to 0

    weeks

    Lean WorkOuts Are The Perfect Tool ForDriving Significant Cycle Time Reduction

    L

    EANWorkOut

    Approach

    Locomotive Assembly cycle from

    29 to 10 days

    40% increase in

    capacity

  • 7/28/2019 GE Capital - Lean

    63/70

    63 /

    GE Proprietary Information

    Integrating LEAN With

    Six Sigma

    When To Use LEAN vs Six Sigma

  • 7/28/2019 GE Capital - Lean

    64/70

    64 /

    GE Proprietary Information

    ToolSophistication

    0 1 2 3 4 5 6

    LEAN Six Sigma

    Complexity&Control

    Speed&

    WasteElimination

    Six SigmaLEAN

    LEAN

    Six Sigma

    Time / Cultural Maturity

    When To Use LEAN vs. Six Sigma

    Integrating LEAN With Six Sigma

  • 7/28/2019 GE Capital - Lean

    65/70

    65 /

    GE Proprietary Information

    Integrating LEAN With Six Sigma

    ImproveDefine Measure Analyze Control

    USE LEAN METHODOLGY TO DRIVE IMPROVEMENTS WHERE

    CYCLE TIME IS IDENTIFIED AS ROOT CAUSE

    Project Management Still Uses DMAIC With Lean

    as a Critical Tool For Improving Processes

    Value Stream

    Mapping

    Current State

    Value Stream

    Mapping

    Future State

    Action Workout -

    Implement

    Changes

    DMleanC

    Broader Perspective Of Our Evolution

  • 7/28/2019 GE Capital - Lean

    66/70

    66 /

    GE Proprietary Information

    WorkOut

    Change accelerationprocess

    Project focused Six Sigma

    Career focused Six Sigma

    Lean Six Sigma wing-to-wingprocess focused

    Employee voice

    X-Functionalinvolvement

    Productivity

    Leadership

    Customer impactand growth

    1989 1992 1996 1999 2005

    Broader Perspective Of Our Evolution

    Employee Response To LEAN

  • 7/28/2019 GE Capital - Lean

    67/70

    67 /

    GE Proprietary Information

    Employee Response To LEAN

    91%would recommend participation in future Lean events to

    colleagues

    91%are excited about using Lean to grow our business

    95%agree that the improvements made areREAL and willimprove the way we do business

    93%feel that the improvements made will increase our

    responsiveness to customer needs and reduce our processcycle time

  • 7/28/2019 GE Capital - Lean

    68/70

    68 /

    GE Proprietary Information

    Considerations For

    Implementing LEAN InYour Organization

    Thoughts On Implementing LEAN

  • 7/28/2019 GE Capital - Lean

    69/70

    69 /

    GE Proprietary Information

    Thoughts On Implementing LEAN

    Focus on the Customer

    Target processes that most directly touch the customer and drive

    growth for your business.

    Measure Customer Impact

    Translate cycle time reductions to customer impact. Either through NPS

    or through incremental revenue and net income.

    Get Everyone Engaged

    Lean works best when you focus wing to wing and drive cross-functional

    participation.

    Create a Continuous Learning Culture

    Create new processes and dont be afraid to fail. Try new approaches

    and learn from your mistakes.

  • 7/28/2019 GE Capital - Lean

    70/70

    Questions?Questions?