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1 Principles of Lean Six Sigma and CAPA Eugenio Longo, PhD. Eugenio Longo, PhD. Industrial Advisor & Industrial Advisor & Visiting Professor Visiting Professor for Universities for Universities

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Page 1: Principles of Lean Six Sigma 2012

1

Principles ofLean Six Sigma

andCAPA

Eugenio Longo, PhD.Eugenio Longo, PhD.Industrial Advisor &Industrial Advisor &Visiting ProfessorVisiting Professor for Universitiesfor Universities

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Agenda :

Part 1 – Lean Six Sigma

OverviewLean and 6 Sigma integration

Work shop + QuizTake away:

Closing

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Agenda :Part 2 - CAPA

Objectives of courseMed Dev + Pharmaceuticals

Operations OverviewStatistics regarding CAPA issues: FDA 483, Warning

Letters + Consent Decree.What is an effective CAPA program important for your

businessCAPA regulation in detailCAPA inputsEffective approach

Problem SolvingTechnical WritingTracking and F/UOwnership – your way of making business.

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Principles of Lean Six Sigma

Overview of LeanManufacturing and Six Sigma

MethodologiesA

Lean Enterprise

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Introduction

Today’s manufacturing and businessenvironments are reaching a point thatcompetition for survival and market share isan obligation.

Tracking the global economy will show thatbeing good is not enough, therefore eachorganization really strive for excellence ifwant to stay in the market.

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Business Facts

Every single organization islooking for one singleoutcome…

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Business Facts

PROFIT

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Business Facts

PROFIT is not a single concept butcomes with many importantimplications:• P- Process excellence• R- Resources Management• O- Oriented to a Goal• F- Financially Strong• I- Innovative – to stay ahead of

competition• T- Timely deployment of strategies

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Business Facts

The most traditionaldefinition ofPROFIT……..

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Business Facts

$$$LET’S MAKE

MONEY$$$

BUT DO ITRIGHT

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How we make PROFIT

In order to be a leader, most companies arerealizing that traditional management,manufacturing processes, and other historicapproaches, are not enough.

More effective methods are needed:• Six Sigma• Lean Manufacturing

With origins in the Toyota ProductionSystem, is a way of living in the businessenvironment.

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History of ManufacturingHistory of Manufacturing

Made to customer specSingle piece mfg… each product uniqueVariable qualityLittle inventoryHigh cost … made for the rich

CraftCraftCraft

Interchangeable parts – Whitney Division of labor – Taylor Assembly lines – Ford Labor strife

Mass ProductionMass ProductionMass Production

High variety Small batch sizes PPM quality Engaged workforce

The “Lean” EnterpriseTheThe ““LeanLean”” EnterpriseEnterprise

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Recognize a need to change and beable to do PROFIT.

Process Analysis is the foundationProcess Analysis is the foundationtoward achieving Process Excellence.toward achieving Process Excellence.

How we make PROFIT

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We need to Change to makePROFIT?

We need to Change to makeWe need to Change to makePROFIT?PROFIT?

A need for change is usually characterized by:Quality is a “Q.A.” department responsibility

Large production lots

Large centralized stores

Customer dissatisfaction

Enormous part and process variation

Set-up measured in hours instead of minutes

Order entry times measured other than in minutes

Product margins eroded by increasing operating costs

Ever-increasing competitive pressures

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Why Change ?Why Change ?Why Change ?

Need for change is a STRATEGIC ISSUE whichany and every Manufacturer must address:

Quality - How to improve it

Cost - How to control it

On-time Delivery - How to ensure it

In other words, How we make PROFIT?

Failure to improve in all three areas means a lossof competitiveness in today’s global marketplace.

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Why Change ?Why Change ?Why Change ?

“Lean Linking”

is …

Forward Thinking !

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Why Change ?Why Change ?Why Change ?

““Lean LinkingLean Linking””

isis ……

Forward Thinking !Forward Thinking !

Do not become the dinosaurDo not become the dinosaurof your industryof your industry

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Evolutionary vs. RevolutionaryChange

Evolutionary vs. RevolutionaryEvolutionary vs. RevolutionaryChangeChange

Having a forward looking perspective on continuousimprovement is a requirement of the competitivemarketplace and is the first step in becoming world-class.

DO NOT set incremental improvement goals over previousperformance, rather -

Think of where we need to be:Continually declining costs

Zero defects

Minimal inventories

Fully satisfied customers

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What can we expect with LeanThinking?

(over 5 years)

What can we expect with LeanWhat can we expect with LeanThinking?Thinking?

(over 5 years)(over 5 years)Defects reduced by 20% per year

Delivery Lead Times reduced by more than 75%

On Time Delivery improved to 99+%

Productivity (sales per employee) increases of

15-25% per year

Inventory (working capital) reductions of more than75%

Return on Assets improvement of 100%+

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Analyzing and ImprovingProcesses

Analyzing and ImprovingAnalyzing and ImprovingProcessesProcesses

An integrated approach to utilizing Capital, Materials, andHuman resources to produce just what is needed, when it isneeded. In the amount needed with minimum Materials,Equipment, Labor and Space.

A Lean DefinitionA Lean DefinitionA Lean Definition

Identify and eliminate waste(MUDA).

Overriding PrincipleOverriding PrincipleOverriding Principle

What’s in a Name . . .WhatWhat’’s in a Name . . .s in a Name . . . Toyota Production System, J.I.T., Lean Manufacturing,

Demand Flow Technology, Kaizen, is really Process Analysis !

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How we make PROFIT - TPS

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Building Blocks of The LeanBuilding Blocks of The LeanEnterpriseEnterprise

“Continuous Improvement”

TeamworkRewards / RecognitionTraining

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“Continuous Improvement”

ValueStreamMapping

TeamworkRewards / RecognitionTraining

Building Blocks of The LeanBuilding Blocks of The LeanEnterpriseEnterprise

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Quick Changeover

Standard Work Batch Reduction Layout

Mistake Proofing

5S SystemProjects Visual Management

POU

Cellular / FlowPull / Kanban TPM

“Continuous Improvement”

ValueStreamMapping

TeamworkRewards / RecognitionTraining

Building Blocks of The LeanBuilding Blocks of The LeanEnterpriseEnterprise

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How we do PROFIT – by anOperational Excellence

Mission Statement

How we do PROFITHow we do PROFIT –– by anby anOperational ExcellenceOperational Excellence

Mission StatementMission StatementDevelop the ability:

To recognize and identify waste

To have to courage to call it waste

To have the desire to eliminate it

Eliminate the waste

Truly understand that wasteRaises costs

Produces no corresponding benefit

Threatens all of our jobs

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To do PROFIT we can use the Lean SixSigma Strategy …To do PROFIT we can use the Lean SixTo do PROFIT we can use the Lean SixSigma StrategySigma Strategy ……

… for turning manufacturing and businessprocesses into competitive weapons.

Producing what is needed, when it isneeded, with a minimum amount of

materials, equipment, labor and space.

“Prime Directive” - to continually seek out andeliminate waste and wasteful practices.

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The Lean Six Sigma Strategy …The Lean Six Sigma StrategyThe Lean Six Sigma Strategy ……

… with these 4 Main Goals:

#1) IMPROVE QUALITY#1) IMPROVE QUALITY#1) IMPROVE QUALITY#2) ELIMINATE WASTE#2) ELIMINATE WASTE#2) ELIMINATE WASTE#3) REDUCE LEAD TIME#3) REDUCE LEAD TIME#3) REDUCE LEAD TIME#4) REDUCE TOTAL COSTS#4) REDUCE TOTAL COSTS#4) REDUCE TOTAL COSTS

With an overriding principle: Safety 1Safety 1stst !!to continually seek out and eliminate unsafe operatingconditions and practices in every aspect of ourBusiness.

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The Lean Enterprise is a Strategy …The Lean Enterprise is a StrategyThe Lean Enterprise is a Strategy ……

… with these 4 Main Goals:

#1) IMPROVE QUALITY#1) IMPROVE QUALITY#2) ELIMINATE WASTE#2) ELIMINATE WASTE#3) REDUCE LEAD TIME#3) REDUCE LEAD TIME#4) REDUCE TOTAL COSTS#4) REDUCE TOTAL COSTS

With an overriding principle:• to continually seek out and eliminate unsafe operating conditions andpractices in every aspect of our Business and every process within ourOperations and to constantly, and consistently, enhance Health/Welfare,Safety and Environmental concerns and issues.

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With a well-planned implementation,overall expected RESULTS may include a …

(within 12 months)

35% to 50% reduction in lost time/safety-related incidents and accidents

15% to 30% decrease in scrap and rework

25% to 40% reduction in total cycle time

The Promise of Lean Six SigmaThe Promise of Lean Six SigmaThe Promise of Lean Six Sigma

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Lean Six Sigma – Benefits.

The Benefits Are There For The Taking

The Benefits Always Include Increased Market Share, Lowered Cost HigherProfits And Happier Customers (And Shareholders)

“Lean” Is The Only Answer Known That Provides These Benefits

“Lean” Never Fails If You (R-E-A-L-L-Y) Do It

Saying “Lean” Is Not Doing Lean

Every Successful Business That Competes In An Over-capacity Or Price-sensitive Market Is Doing “Lean” Whether They Know It Or Not

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Lean Six Sigma

Philosophy and Key Concepts• The 5 core principles of Lean• Define value-added and non-valued added

activity• Define the 7 most common types of waste• and their causes.• Review a systematic approach to discover

waste within a process.

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Learn the 5 Core Principles of Lean:1) Specify value in the eyes of the customer

2) Identify value stream and eliminate waste

3) Make value flow at pull of the customer

4) Involve & empower employees

5) Continuously improve in pursuit of perfection

Lean Six Sigma

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Customer perceives valueCustomer perceives valueValue Added ActivityAn activity that changes the size,shape, fit, form, or function of materialor information (for the first time)to satisfy the customer.

Non-Value Added ActivityThose activities that consume time or resources, but do not addvalue in the eyes of the customer.

Lean Six Sigma

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Value Added• Any activity or operation performed that helps transform a product or service

from its raw state into its finished form.• Completed right the first time.• Any activity customer is prepared to pay for. Activity required to ensure that

a product or service is delivered in conformance to specification.

Non-Value Added• Any activity that doesn’t help to transform a product or service into its final

form. Activity not performed right. Activity customer not willing to pay for.• This includes:

Unnecessary process steps Movement of inventory, paperwork, etc. Re-work, corrections, etc. Storage between operations, batching inventory Wait times, delay times, idle times

Lean Six Sigma - Definitions

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Lean Six Sigma - 7 most common wastes

Identify and reduce:• Defects (repair, rework, scrap)• Overproduction (inventory)• Transportation (conveyance)

• Waiting (queue time)• Inspection (reliance on mass inspection/ verification)• Motion (parts, paper, people)• Process, itself (over-processing, long cycles)

“Commonly referred to as the 7W’s…”*7 common wastes of production (Shingo)

““Commonly referred to as the 7WCommonly referred to as the 7W’’ss…”…”*7 common wastes of production (Shingo)*7 common wastes of production (Shingo)

MUDA = nonMUDA = non--value added activityvalue added activity(waste)(waste)……

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Motion

Waiting time

Overproduction

Processing time

Defects

Inspection

Transportation

Problems/ CausesIncorrect layoutsLack of proximity of machinesOff-line resources

Waiting workers, machines, materialsLong set-ups and lead times

Large batches, raw material stocksHigh WIP, finished goods stocksMaking for the sake of itIgnoring customer demands

Long cycle times- process, itselfReduced efficiency- over processingHigh overall lead times

Long delays for rectificationCostly reworkDissatisfied customers

Approvals of approvalsHigh number of verification stepsReliance- Mass inspection techniques

Unnecessary movementExtra handling

Types of Waste(7W’s)Value

Added

Non- Value Added,but necessary

Waste

Focus onreduction

Peop

lePr

oces

sPr

oduc

t

The Causes of Waste in most ProcessesThe Causes of Waste in most Processes

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Product LeadProduct Lead--TimeTimeRaw

MaterialsFinishedGoods

Value AddedTime

Non- ValueAdded Time

TIME

Lean Six Sigma

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Product LeadProduct Lead--TimeTime

95% Non95% Non-- Value AddedValue Added

Lean Six Sigma

Historically,Historically,improvement effortsimprovement efforts

have been focused here.have been focused here.

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Product LeadProduct Lead--TimeTime

Whereas,Whereas, ““Process AnalysisProcess Analysis”” activitiesactivitiesshouldshould

Focus hereFocus here -- the Elimination of Wastethe Elimination of Waste(MUDA)(MUDA)

95% Non95% Non-- Value AddedValue Added

Lean Six Sigma

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Identifying WasteIdentifying WasteWaste can take many forms; some causes of

the most common forms of waste include:

lack of adherence unnecessary approvals or signatures reviews of reviews multiple hand-offs transportation long setup time correction, and over-production

Lean Six Sigma

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Identifying WasteIdentifying WasteOther causes of waste may include:

poor maintenance lack of training poor supervisory skills ineffective production planning/ scheduling lack of workplace organization Supplier quality/ reliability

In most cases, inventory is wasteful; moreimportantly, inventory hides all sorts ofproblems in the company

Lean Six Sigma

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Learn to Recognize the Types ofWaste

From Taiichi Ohno, Architect of the Toyota Production System

PEOPLE

TYPESOF

WASTE

Processing

Motion

Waiting

FixingDefects

Making TooMuch

MovingThings

Inventory

QUANTITY

QUALITY

Overproduction / Making To MuchTies up capital, diverts production fromcustomer requirements, loss of inventories

Transporting / Moving ThingsUnnecessarily increases production time,extra WIP

Unnecessary Stock / InventoryTies up capital, risk of changes

WaitingDecreases productivity, wastes personnelresources

Unnecessary MotionIncreases production time, unnecessaryoperator motion

ProcessingPoorly designed / incapable processes

DefectsScrap, rework, returns

Lead time reduction is achieved by identifying and eliminating waste

Page 43: Principles of Lean Six Sigma 2012

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LongSet-upTime

Poor5-S

QualityProblemsLine

Imbalance

Down-Time

Vendor Delivery Problems

PoorScheduling

PoorCommunication Absenteeism

PoorProcess

Capability

Raw Material Finished Goods

Your CompanyYour Company

Lean Six Sigma

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Process Analysis to the RescueProcess Analysis to the Rescue… we have only begun to deal with issues involvedin trying to tie everything together for a whole-system approach. Some of the problems thatcontinue to confound us are the following:

The way manufacturing works with Sales makesscheduling and running the plants difficult. We compound the above problem by the way we order from

suppliers.

Labor and management still don’t trust each other.

The way we measure performance doesn’t provide information usefulto running a plant and often encourages wrong decisions.

Lean Six Sigma

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Look at the “3 Real Things” in every operation …

• Material Flow(or Business Steps i.e. transactional processes)

• Information Flow (data)

• Work-in-process (could be both…)

Lean Six Sigma – How to Discover Waste

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Lean Six Sigma – How to Discover Waste

Ask what?What is the operation doing?

Ask why?Why is the operation necessary?Ask why at least 5 times to lead you to the root cause

Everything that is not work is wasteOnce you know the function, you can identify as wasteanything that does not execute that function

Draft an improvement plan…Ask how?

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Be on the look-out for these3 Major contributors …

• Overburden/ Overdoing

• Unevenness

• Process methods

Lean Six Sigma – How to Discover Waste

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Be on the look-out for these3 Major contributors …

• Overburden/ Overdoing (muri)

- waste caused by how work and tasks are designed

• Unevenness (mura)- waste caused by poor quality (process unpredictability)

• Process methods (muda)- waste caused by “DOT WIMP”

Lean Six Sigma – How to Discover Waste

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Lean Six Sigma - What actions must we take?

We must …• decrease cycle times• reduce travel distances• standardize our processes• reduce scrap, rework and waste• improve all of our business processes• reduce the variation in our schedules• provide a constant, steady supply of• parts to production, assembly, and test

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Lean Six Sigma - What actions must we take?We must …

• design products to match a stable,• standard production process• gain Market share

- and -• increase our competitiveness !

• NowNow –– how do we get there ??how do we get there ??

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Lean Six Sigma

Utilize the processUtilize the process ““DMAICDMAIC”” ……(Define, Measure, Analyze, Improve and Control)(Define, Measure, Analyze, Improve and Control)

• Understand the Problem• Form the Team• Understand the Process• Gather Process Data• Analyze the Process• Identify possible Corrective Actions• Screen/ Experiment to select best action• Implement Action• Verify Action• Sustain Improvement

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The Lean Six Sigma is a StrategyThe Lean Six Sigma is a Strategy ……… for turning manufacturing and business

processes into competitive weapons.

Producing what is needed, when it isProducing what is needed, when it isneeded, with a minimum amount ofneeded, with a minimum amount of

materials, equipment, labor and space.materials, equipment, labor and space.

“Prime Directive” - to continually seek out andeliminate waste and wasteful practices.

Lean Six Sigma

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SIX SIGMA

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Six SigmaSix Sigma is the term applied to the

application of the DMAICmethodology.

It is a structured, disciplined, rigorousapproach to process improvement.

The five steps link to each other into alogical sequence, creating an infiniteloop for process improvement.

The goal of the method is to achieve3.4 defects per million parts (oropportunities of doing it wrong), mostcommonly known as 6 Sigma.

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Six Sigma

Implementation of Six Sigma requirescommitment of the organization andteam leaders.

Is quite common to see, Yellow Belts,Green Belts, Black Belts and too oftenthe …Soft Belts….

Being the last ones the ones obstructingthe implementation.

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Six Sigma

If the organization you work for has a SixSigma Program in place, notnecessarily guarantee the success ofthe organization. It depends on goodteams, good steering committee andchampions as well as managementsupport.

In any Six Sigma program, keeping theright people engaged towards successis the key.

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Six Sigma – DEFINE Stage:

The objective in this area is to create aclear statement, a Team Charter, thatdepicts the success story to be created.

Shows a high level description of theprocesses being improved and theexpected achievements.

Show how your customers will beimpacted

The most critical stage to catch thesupport from your organization.

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Six Sigma – MEASURE Stage:The whole objective here is to gather data

and information that will help you in pinpointing the real causes of the problembeing resolved.

Here you will know your current situationand the expectation on how much canbe improved.

Information here, helps to refine yourdefine stage if needed.

Set up the basis for the next stage:

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Six Sigma – ANALYZE Stage:

The objective here is to get the data anduse statistical tools to identify the rootcause(s), create a hypothesis (orseveral ones) and prove them out.

The ones that prove to be the realcauses, are the ones needed to beaddressed on the next stage.

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Six Sigma – IMPROVE Stage:

The target id to implement actions tocorrect the problems identified on theprevious stage.

These actions need to be tested andmeasured to verify that are effective.

The effective methods set the basis forthe next stage.

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Six Sigma – CONTROL Stage:

The target in here is to turn the solutions found into arentable change in the processes.

These changes are to monitor the performance,maintain the benefits from the solution implementedand set the ground for new improvementopportunities as the new data being collected feedsthe DMAIC cycle for another project.

In the regulated industry, theses changes mightrequire, new procedures (SOP) and Validations toensure compliance to ISO and FDA regulations asapplicable.

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Six Sigma – Summary

Each single stage relies on the previous one fora comprehensive effect.

Cutting corners is prohibited in Six Sigma.All data generated and used must be kept in an

organized fashion, might be helpful when theDMAIC cycle gets you to a problem wherethat particular information was alreadygathered.

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Six Sigma – Tool BoxTOOL NAME D M A I C TOOL NAME D M A I CAffinity Diagram X X Frequency Plots X X X XBrainstorming X X FMEA (Failure Mode & Effect Analysis) XBusiness Case X Gage R & R XCause-and- Effect Diagrams X Hypotesis Tests XCharter X t-testConsensus X paired t-testControl Charts X X X X ANOVA

Continuous data Chi SquareIndividuals Kano Model XX-Bar, R Planning Tools XEWMA Gantt Charts

Discrete data Planning Gridp,np Pareto Charts X X Xc,u Prioritization Matrix X X

Critical to Quality Tree X Process Capability X XData Collection Forms X X X X Process Sigma X X

Check Sheet Quality Control Process Chart XPfrequency Plot Check Sheet Regression XConfirmation Check Sheet Rolled Throughput Yield XConcentration Diagram Sampling X X X X

Data Collection Plan X X X X Scatter Plots XDesign of Experiment X X SIPOC (Suppliers, Inputs,Process,Outputs,Customers) X

Full Factorial Stakeholder Analysis X XReduced Fractions Standardization XScreening Designs Stratification X X X XPlacket-Burnham Designs Stratified Frequency Plots XMore than Two Levels Time Series Plots (Run Charts) X

Flow Diagrams X X X X X VOC (Voice of the customer) X

CYCLE STAGE CYCLE STAGE

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Six Sigma -Summary

After each stage is completed,demand a meeting a with thepeople that must know, theprogress is your best selling tool tokeep getting the support.

Don’t be shy – your champion isthere to assist you, the Black Beltis there to help you; no one is anexpert on all the statistical tools,so ask for help before assumingincorrectly.

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Lean Six SigmaSix Sigma alone is not Lean

Manufacturing, is just one tool,that combined with statistics cangive you solutions.

Using the DMAIC cycle and usingother Lean Manufacturing toolsinstead of Statistics can alsoproduce results.

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TYPE OFWASTE

WASTEREDUCTIONAPPROACH

METHOD DESIREDRESULT

Standard Work

WorkplaceOrganization

Kaizen

WorkplaceManagement

Just-in-time

ErrorProofing

Processing

Motion

Waiting

WhatYouNeed,WhenYou

NeedIt

HighlyEfficient,

SafeWorkAreasWithHigh

Output

GoodQuality

Inventory

MovingThings

Making TooMuch

FixingDefects

Leveling

Kanban

Quick Setup

PreventiveMaintenance

Detection

Warning

Prediction

Prevention

CATEGORYOF WASTE

PEOPLE

QUANTITY

QUALITY

FOCUSPOINTS

Work BalanceWIPLocation/AmountKanban LocationKanban TypesLot SizesChangeover AnalysisPM Analysis

LayoutLabelingTools/PartsArrangementWork InstructionsEfficiencyTakt TimeSkills TrainingShift MeetingsCell/Area TeamsVisual Displays

Appropriate AutomatedAssistance

Fixture ModificationsSuccessive ChecksLimit SwitchesCheck SheetsPhotocells, Templates,

Etc.Cross Training

PRINCIPALWORKSHEETS

Standard WorkSheet (SWS)

Time ObservationForm (TOF)

Standard WorkCombination

Sheet (SWCS)Work Load

Balancing Sheet(WLBS)

Kaizen TargetSheet (KTS)

Kaizen ActionSheet (KAS)

SWSSWCSWLBSKanbansTable of

ProductionCapacity ByProcess (TPCP)

PM SchedulingSheet (PMSS)

SWCS

Error ProofingAction Sheet(EPAS)

Error Proofing “ToDo” List (EPL)

Skill VersatilityVisual DisplayJidoka

Autonomation

20 Keys

Kaizen - oneeffectivemethod amongmany thatengages PEOPLEand “recruits”the other tools

Lean Six Sigma- Approaches and Techniques

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KAIZEN

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Kaizen = Continuous Improvement

“Kai” = Small, Continuous Change“Zen” = Ongoing Change For The

BetterStructured, Focused, Coached,

Mandated & Required Activity ToCompel Every Employee ToParticipate In Improving The QualityAnd Efficiency Of Their Day-to-dayMicro-processes

Not A “Suggestion Box” Program

Building Blocks of Lean ProductionJust-in-timeStandard operationsMistake-proof processingPull production & single pieceflowCellular manufacturingVisual workplace

Kaizen is the “transport vehicle”to import these building blocksof lean production

These concepts are equally applicable to the factory floor and within the office

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• Reject the current situation

• Keep an open mind to change

• Maintain a positive attitude

• Make problems visible; make theworkplace visual

• Never leave in silentdisagreement

• Practice mutual respect everyday

• One person, one voice - noposition or rank

There’s no such thing as a dumbquestion

Take action over excuses andmake actual improvements now

Get on base rather than go for thelong ball (small progress vs. all)

Use your head rather than yourmoney

Destroy myths of fixed production

It’s a never ending task

HAVE FUN and JUST DO IT!

Lean Six Sigma – Guides for Kaizen

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VALUEVALUESTREAMSTREAMMAPPINGMAPPING

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Origins in Toyota, circa1955 – The way of doing business…

Also called “Material and Information Flow Mapping”

Used by Toyota Motors to show both current and ideal statesas part of the lean implementation process

Discussed in “Lean Thinking”Further developed anddocumented by the LeanEnterprise Institute ofBrookline, Mass.“Learning to See”

19961998

Lean Six Sigma – Short History

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Total Value Stream

SUPPLIERS YOUR PLANT OR BUSINESS CUSTOMER TO END USER

All the actions, both value added and non-value added, currentlyrequired to bring a product from raw materials to the customer.All the actions, both value added and non-value added, currentlyrequired to bring a product from raw materials to the customer.

Lean Six Sigma – What is Value Stream?

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A value stream is all the actions (both value added and non-valueadded) currently required to bring a product (or transaction) though themain flows essential for every product/ service: from raw material/(customer need), through all the required steps, then – back to thearms of the customer.

Taking a value stream perspective means working on thebig picture, not just individual processes, and improvingthe whole, not just optimizing the parts.

TOTAL VALUE STREAM

SUPPLY

PARTNERS YOUR PLANT OF COMPANY CUSTOMER TO END USER

Lean Six Sigma – Value Stream Perspective

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WIP 870

QTIME72H

MELT903M

INSPCHEM

HoldFurnace

Cast903

INSPPROFILE

WIP 696QTIME

P/T 6N

LOT 75K

P/T 8HWIP 8 COILS

120K

P/T 3 HR15KWIP

STORE STAGE BREAKDOWN911

REC STAGE

LEAD 2231.1

VA 210.17%SCRAP

WIP746KQTIME8 1OK

LOT 1 COILTIME .1WIP 15K

WIP108K8HRQ/T8

DOWNTIME 15%

DOWNTIME 15.5%

8 6 8 3

OperationalOperational exampleexample

Map major process stepsI.D. Value (green/ yellow) / Non-value (red)Capture all times, quantitiesPrioritize areas to improve

X SHIPPED PER DAY

850K

1.870 WIP BEING WORKED

4.276 WIP BEING STORED

Lean Six Sigma – Value Stream Map

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Customer

MACHINING

C/T=1568 mC/O=50 min.

2 SHIFTSOPER. 48

Daily

FIFO

Prod’n Cont.

Supplier OrdersOrders

IRREGULAR

ASSEMBLY

C/T=936 mC/O=0 min.1 SHIFT

OPER. 24

TEST

C/T=60 mC/O=30 min.1 SHIFTS

OPER. 5

FINISH

C/T=210 mC/O=0 min.

1 SHIFTSOPER. 6

DISPATCH

C/T=30 mC/O=0 min.

1 SHIFTSOPER. 2

FIFOFIFO

OXOX

1 DAY

2 DAYS 2 DAYS

900 MINS 900 MINS 240 MINS 150 MINS 120 MINS

1568 MINS 936 MINS 60 MINS 210 MINS 30 MINS

4 WEEKSOUT

12 WEEK FORECAST

< 1/2 DAY <2 ENGINES <2 ENGINES

PITCH = 60MINUTES

LT<3 1/2 DAYS

MANUFACTURING LEADTIME = 3 1/2 DAYSCUSTOMER LEADTIME = 2 WEEKS

Big PictureBig Picture exampleexampleLean Six Sigma – Value Stream Map

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• To understand the current situation - The“big picture” point of view (To use as a tool to

improve the whole vs. optimizing the parts…)

• Exposes sources of waste - not just the waste

• Shows linkage between information flow andmaterial flow

• Forms the blueprint to identify areas ofimprovement

Lean Six Sigma – Why do Value Stream Mapping?

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• It helps visualize more than just the single-process level, i.e.assembly, welding, etc., in production. You can see the wholeflow.

• It helps to see more than waste. Mapping helps to see the sourcesof waste in your value stream.

• It provides a common language for talking about manufacturing(and transactional) processes.

• It makes decisions about the flow apparent, so you can discussthem. Otherwise, many details and decisions in your area justhappen by default.

• By adding data, it ties together lean concepts and six sigmatechniques, which helps you avoid “pet projects”.

Lean Six Sigma – Why do Value Stream Map do for us?

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It forms the basis of an implementation plan. Byhelping you design how the whole door-to-door flowshould operate - a missing piece in so many leanefforts - value stream maps become a blueprint forimprovement. Imagine trying to build a housewithout a blueprint!

• It shows the linkage between the information flowand the material flow. No other tool does this.

Lean Six Sigma – Value Stream Map is an Essential Tool

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It enhances the quantitative tools and layoutdiagrams that produce a tally of non-value addedsteps, lead time, distance traveled, the amount ofinventory, and so on.

• Value stream mapping is a qualitative tool by whichyou describe in detail how your facility shouldoperate in order to create flow. Numbers are goodfor creating a sense of urgency or as before/ aftermeasures. Value stream mapping is good fordescribing what you are actually going to do toaffect those numbers.

Lean Six Sigma – Value Stream Map is an Essential Tool

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SteelRecd

PartsStocked

Componentsmachined

Plate Steelburned

StructuralSteel Sawed

Steelstocked Weld Shop Paint Shop

Elect/Mech PartsRecd

Blasting BoothSand Bast

Mech parts toMech Assembly

Staging

Partsstocked

Inspection

MechAssembly

Elect parts toElect Assembly

Staging

ElectAssembly

InspectionRun TestCratingShippingWarehouseShip toCustomer

Steel Fabrication Process (Current State)Can you identify areas for improvement?

Lean Six Sigma – Process Map Analysis

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SteelRecd

Componentsmachined

Plate Steelburned

StructuralSteel Sawed

Weld Shop Paint Shop

Elect/Mech PartsRecd

Blasting BoothSand Bast

All parts toAssemblyStaging

Inspection

Mech/ElectAssembly

Inspection &Run Test

Ship toCustomer

Steel Fabrication Process (Future State)

Shipping &Crating

Lean Six Sigma – Process Map Analysis

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5 S

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The Benefits of ImplementingThe Benefits of Implementing ““5S5S””

5S provides a basis for being a world-class competitorand the foundation for a disciplined approach to theworkplace.

Safer working conditions A cleaner and more organized work area Reduction in non-value added time Effective work practices Efficient work processes

Facilitating a change: Safer, Better, Faster !Facilitating a change: Safer, Better, Faster !

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And The 5And The 5--SS’’s ares are……

Seiri – (Separate) or SortSeiton – (Straighten) Store, or Put-in

PlaceSeiso – (Clean) or ShineSeiketsu – (Standardize)Shitsuke – (Discipline) or Sustain

+ Safety !+ Safety !

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Sometimes called 5S + 1 orSometimes called 5S + 1 or ““6S6S””

Safety 1Safety 1stst !! (in everything we do!)Seiri – (Separate) or Sort

Seiton – (Straighten) Store, or Put-in Place

Seiso – (Clean) or Shine

Seiketsu – (Standardize)

Shitsuke – (Discipline) or Sustain

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Lean Six Sigma - Other Lean Tools

• Root Cause Analysis and CorrectiveAction (RCCA) – 5 Why Technique

• Spaghetti Charts• Pareto Analysis• Visual Displays• Visual Controls• Total Predictive Maintenance• SMED – Single Minute Exchange of Dies.

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Lean Six Sigma

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LEAN SIX SIGMA

REFERENCES:• The Lean Enterprise – http://www.freeleansite.com/• Six Sigma Green Belt and Champion Training– BD Training• The Kaufman Consulting Group, LLC (KCG) – BD Training• Six Sigma –Pocket Guide, Rath & Strong’s (ISBN: 0-9705079-0-9)