Implementing Six Sigma and Lean: A practical guide to tools and techniques

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  • Implementing Six Sigma and Lean: A Practical Guide to Tools and Techniques

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  • Implementing Six Sigma and Lean: A Practical Guide to Tools and Techniques

    Ron Basu

    AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD

    PARIS SAN DIEGO SAN FRANCISCO SINGAPORE SYDNEY TOKYO

    Butterworth-Heinemann is an imprint of Elsevier

  • Butterworth-Heinemann is an imprint of ElsevierLinacre House, Jordan Hill, Oxford OX2 8DP, UK

    First edition 2009

    Copyright 2009, Elsevier Ltd. All rights reservedFirst published as Implementing Quality by Cengage Learning Ltd 2004

    No part of this publication may be reproduced, stored in a retrieval systemor transmitted in any form or by any means electronic, mechanical, photocopying,recording or otherwise without the prior written permission of the publisher

    Permissions may be sought directly from Elseviers Science & Technology RightsDepartment in Oxford, UK: phone (44) (0) 1865 843830; fax (44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/locate/permissions, and selecting Obtaining permission to use Elsevier material

    NoticeNo responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein

    British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library

    ISBN: 978-1-8561-7520-3

    Printed and bound in Hungary

    09 10 10 9 8 7 6 5 4 3 2 1

    Typeset by Charon Tec Ltd., A Macmillan Company.(www.macmillansolutions.com)

    For information on all Butterworth-Heinemann publications visit our web site at http:// elsevierdirect.com

  • To Indira and Mandira, my little angels

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  • Contents

    Preface xiii

    Acknowledgement xxi

    About the author xxiii

    Part 1 The Foundations of Quality 1

    1 Quality and operational excellence 3 Introduction 3 Tools and techniques 3 What is quality 4 Hierarchy of quality 8 Cost of quality 10 Waves of quality management 11 Operational Excellence 16

    2 History of the quality movement 18 Introduction 18 World class 19 W. Edwards Deming 19 Joseph M. Juran 21 Armand V. Feigenbaum 22 Philip B. Crosby 22 Hammer and Champy 23 What of the Japanese? 24 Lean Enterprise 25 Total Productive Maintenance 26 Basu and Wright and TQM 27 American and European approaches to TQM 29 Jan Carlzon 30 ISO 9000 30 Kaizen 33 Quality Circles 34 Quality Project Teams 35 Ishikawa (Fishbone technique) or Cause and Effect 35 Compatibility with FIT SIGMA 36 New trends 36

  • viii Contents

    3 The scope of tools and techniques 38 Introduction 38 The drivers for tools and techniques 38 The problems of using tools and techniques 39 The critical success factors 44 Summary of Part 1 47 Part 1: Questions and exercises 48

    Part 2 Tools 51

    4 Tools for definition 53 D1: IPO Diagram 53 D2: SIPOC Diagram 55 D3: Flow Diagram 56 D4: CTQ Tree 59 D5: Project Charter 60 Summary 63

    5 Tools for measurement 64 Introduction 64 M1: Check Sheets 65 M2: Histograms 67 M3: Run Charts 70 M4: Scatter Diagrams 71 M5: Cause and Effect Diagrams 73 M6: Pareto Charts 76 M7: Control Charts 79 M8: Flow Process Charts 82 M9: Process Capability Measurement 85

    6 Tools for analysis 89 Introduction 89 A1: Process Mapping 90 A2: Regression Analysis 92 A3: RU/CS Analysis 94 A4: SWOT Analysis 97 A5: PESTLE Analysis 99 A6: The Five Whys 101 A7: Interrelationship Diagram 102 A8: Overall Equipment Effectiveness 104 A9: TRIZ: Innovative Problem Solving 108

    7 Tools for improvement 112 I1: Affinity Diagram 113 I2: Nominal Group Technique 115 I3: SMED 116 I4: Five S 118 I5: Mistake Proofing 121 I6: Value Stream Mapping 122

  • Contents ix

    I7: Brainstorming 125 I8: Mind Mapping 127 I9: Force Field Analysis Diagram 130

    8 Tools for control 133 Introduction 133 C1: Gantt Chart 134 C2: Activity Network Diagram 136 C3: Radar Chart 138 C4: PDCA Cycle 140 C5: Milestone Tracker Diagram 142 C6: Earned Value Management 144 Summary of Part 2 149 Part 2: Questions and exercises 150

    Part 3 Techniques 153

    9 Quantitative techniques 155 Introduction 155 Selection of techniques 155 Structure of presentation 156 Q1: Failure Mode and Effects Analysis 156 Q2: Statistical Process Control 159 Q3: Quality Function Deployment 166 Q4: Design of Experiments 171 Q5: Define, Measure, Analyse, Improve, Control 177 Q6: Design for Six Sigma 183 Q7: Monte Carlo technique 188

    10 Qualitative techniques 195 Introduction 195 R1: Benchmarking 195 R2: The Balanced Scorecard 199 R3: European Foundation of Quality Management 206 R4: Sales and Operations Planning 212 R5: Kanban 218 R6: Activity Based Costing 222 R7: Quality Management Systems 226 R8: Lean Thinking 231 Summary of Part 3 238 Part 3: Questions and exercises 239

    Part 4 Implementation 241

    11 Making it happen 243 Introduction 243 Selection of tools and techniques 243 Implementation for new starters 246

  • x Contents

    12 Case studies 267 Introduction 267 Product innovation at Elida Faberge, UK 267 Lean Manufacturing at aluminium industry, USA 269 Supply chain logistics at National Starch, USA 271 Six Sigma in General Electric, USA 272 Integrating Lean and supply chain in Seagate, USA 277 FIT SIGMA at a SME, Sweden 279 Performance monitoring at Dupont Teijin Films, UK 280 Total productive maintenance at Nippon Lever, Japan 281 Sales and operations planning at GSK, Turkey 283 Six Sigma training at Noranda, Canada 285 Self-assessment at Jansen-Cilag, UK 286 Total quality at Chesebrough-Ponds, Jefferson City 287 Sustaining Six Sigma by Leadership Forums in Pliva Croatia 288 Lean Sigma changes a pharma culture 290 Summary of Part 4 292 Part 4: Questions and exercises 293

    Appendix 1 Management models 295 Introduction 295 A1: Ansoffs product/market matrix 295 A2: Basus outsourcing matrix 297 A3: The BCG matrix 298 A4: Belbins team roles 300 A5: Economic value added 302 A6: The Fifth Discipline 303 A7: The McKinsey 7-S framework 305 A8: Kanos satisfaction model 307 A9: Mintzbergs organisational configuration 308 A10: Porters competitive advantage 311 A11: Porters five forces 312 A12: Porters Value Chain 314 A13: Turners Project Goals and Methods Matrix 316 A14: Wilds taxonomy of systems structures 317

    Appendix 2 Introduction to basic statistics 320 Statistics 320 Descriptive statistics 320 Normal Distribution 320 Measures of central tendency 321 Measure of dispersion 322 Skewness and Kurtosis 322 Sources of variation 322 Process capability 323 Process Sigma 323 Inferential statistics 323

  • Contents xi

    Causal modelling 325 SPSS 325

    Appendix 3 Random nominal numbers 326

    Appendix 4 Answer to numeric exercises 327 Part 2 327 Part 3 328

    References 329

    Glossary 336

    Index 343

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  • Preface

    Background

    Whilst passing through Miami airport en route Mexico City, I came across an article on Six Sigma in USA Today , 21 July 1998. It read, Today, depending on whom you listen to, Six Sigma is either a revolution slashing trillions of dollars from corporate inefficiency or its the most maddening management fad yet devised to keep front-line workers too busy collect-ing data to do their jobs . At that time I was coordinating a Global MRPII Programme between all manufacturing sites of GlaxoWellcome includ-ing the Xochimilco site in Mexico. The Global Manufacturing and Supply Division of GlaxoWellcome were considering a Lean Sigma initiative which was meant to be a hybrid of Six Sigma and Lean Manufacturing. It struck me that the message in the USA Today reflected not just the doubts (or expectations) in the minds of my colleagues but perhaps those of quality practitioners worldwide.

    These doubts or expectations addressed many questions. Isnt Six Sigma simply another fad or just a repackaged form of TQM? It appears to be suc-cessful in large organisations like Motorola and General Electric, but can small firm support such a programme? How can we apply Six Sigma method-ology originated from manufacturing operations to the far larger market of the service sector? Like any good product, Six Sigma will have a finite life cycle so what is next? Surely one big question is how can we sustain the benefits in the longer term? It is good to be lean , but isnt it better to be fit to stay agile? The idea of writing a book to address these issues was mentally con-ceived at Miami airport and the concept of FIT SIGMA was born. It was named Quality Beyond Six Sigma and the book was published by Butterworth Heinemann in January 2003.

    During the preparation of Quality Beyond Six Sigma and particularly after its publication it struck me that the book fell in the same trap like other books on quality genre. The emphasis has been towards the strategy and culture of change management. The fundamental building blocks of hands-on tools and techniques were missing. The wisdom of a people focused holistic approach to operational excellence cannot be faulted. It is vital to follow a proven approach to put all the components of the quality improvement puzzle together properly. It is equally important to explain the tools and techniques in detail to all stake-holders of the programme so that these components can be applied in the most effective way. One can argue that the motivation to effectively pursue qual-ity improvement has been impaired by not fully understanding the basic tools

  • xiv Preface

    and techniques. Furthermore there is no available publication which is dealing in-depth with these useful tools and techniques under one cover.

    In the experience of the author, both in industry and management courses, the details of various tools and techniques had to be acquired from different books, publications and training manuals. It is time now to produce a compre-hensive, user-friendly and hands-on book which could be a single source ref-erence of tools and techniques for all practitioners and students of operational excellence. With these thoughts in mind I wrote Implementing Quality , which was published by Thomson Learning in 2004. The demand for this book, comprising tools and techniques and implementation methodology for qual-ity programmes, such as Six Sigma, Lean Sigma and FIT SIGMA, contin-ued to grow. However during 2007 Thomson Learning, following a takeover and organisational restructuring, changed their strategy of publications and Elsevier expressed interest in publishing an updated version. So this book, Implementing Six Sigma and Lean was born.

    Tools and techniques

    I firmly believe that regardless of the quality programme that an organisation may choose to adopt, a selection of tools and techniques will be essential to progress the initiative. You should have a complete toolbox at hand. Just as a good golfer will not compete in a championship with just an iron, it is import-ant that you should acquire a full bag of irons and clubs . The reader should find a comprehensive range of tools and techniques and useful management models in this book.

    The terms tools and techniques , which are frequently and interchange-ably used in books and practices, are consciously differentiated here. As described in the book. tools are related to improving quality as are the tools used in constructing a building. A single tool may be described as a device which has a clear role and defined application. A technique , on the other hand, may be viewed as a collection of tools. There is also a need for a greater intellectual thought process and more skill, knowledge, under-standing and training in order to use them effectively. For example Control Charts is a tool of statistics. The way this tool is used along with other tools (e.g. Process Capability Measurement) is a technique of Statistical Process Control (SPC).

    It goes without saying that by borrowing the racket of Pete Sampras does not make one to win a Wimbledon title. Without appropriate training and application, the tools and techniques cannot be effective. It reminds me of a story that I read in Gems of Educational Wit and Humour . A Baby Tiger said to Mummy Tiger, Here comes a hunter, and he has five rifles, three spe-cial sighting telescopes and devices to allow him to see in the dark! What are we going to do ? Hush! replied Mummy Tiger and taught her cub how to sneak up from behind and pounce. The hunter was never heard of again.

  • Preface xv

    A simple moral from this story is that tools and techniques may be fine, but these will never be a substitute for a good...

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