Lean Six Sigma: an Overview for Developing Countries

Lean Six Sigma: an Overview for Developing Countries

Muhammad Ammar Mehdi

Department of Mechanical Engineering

University of Engineering & Technology Taxila, Pakistan

Email:Phone No: 092-0333-6020600 Fax No: 092-51-9047420

Six Sigma tools and techniques developed by Motorola in 1987 were basically focusing on process variation and then finding root causes of these variations and controlling them. But in this technique no focus was given on waste variation. But Japanese companies were using a technique called “Lean manufacturing” to reduce different types of wastes including inventory, transportation and production. Now combination of Lean Manufacturing and Six Sigma is termed as Lean Six Sigma. Firstly these tools were being used in manufacturing environment, now they are also being widely used in service sector (Hospitals, Banks) also. In this research paper various tools of Six Sigma and Lean Manufacturing including Process mapping, Regression, DOE, ANOVA, Kaizen – continuous processimprovement, TAKT Time, Value Stream Mapping (VSM), Jidoka, and VisualManagement will be introduced to give audience an overall idea of this newemerging methodology.

In this paper some recommendations about effective implementation of Lean Six Sigma and common problems associated with implementation will be discussed here.

1 Introduction

1.1 Origin of LeanManufacturing

Lean thinking originated at Toyota with the Toyota ProductionSystem (TPS). The original ideas were formulated by SakichiToyoda in the 1920s and 1930s. Taiichi Ohno began toimplement these ideas in the 1940s but only made the leapto full implementation in the 1950s.Many of the principles of lean came from a surprising source:American supermarkets where small quantities of a vastselection of inventory are replenished as customers "pull" themoff the shelf. This is the Kanban system.The hardest part of learning to think lean is abandoning oldideas about economies of scale and mass production. Theseare basically "push" systems based on projected customerdemand. Quality is "inspected" into the product. These "batch and-queue," push system ideas must be the first casualtiesof the lean transformation.In lean, quality, productivity and low cost come from producingsmall batches (ideally one) of a given product, start-to-finishwithout any piles of partially finished goods.The principles of lean are pretty simple, whether you apply itto manufacturing, service, or administration.

1.2 Origin of Six Sigma

Six Sigma was launched by Motorola in 1987. It was the result of a series of changes in the quality area starting in the late 1970s, with ambitious ten fold improvement drives. The top level management along with CEO Robert Galvin developed a concept called Six Sigma. After some internal pilot implementations, Galvin, in 1987, formulated the goal of “achieving Six Sigma capability by 1992” in a memo to all Motorola employees. The results in terms ofreduction in process variation were ontrack and cost savings totalled US$13 billion and improvement in labor productivity achieved 204% increase over the period 1987–1997 (Losianowycz, 1999).

In the wake of successes at Motorola, some leading electronic companies such as IBM, DEC, and Texas Instruments launched Six Sigma initiatives in early 1990s. However, it was not until 1995 when GE and Allied Signal launched Six Sigma as strategic initiatives that a rapid dissemination took place in non-electronic industries all over the world (Hendricks and Kelbaugh, 1998). In early 1997, the Samsung and LG Groups in Korea began to introduce Six Sigma within their companies. The results were amazingly good in those companies. For instance, Samsung SDI, which is a company under the Samsung Group, reported that the cost savings by Six Sigma projects totaled US$150 million (Samsung SDI, 2000a). At the present time, the number of large companies applying Six Sigma in Korea is growing exponentially, with a strong verticaldeployment into many small- and medium-size enterprises as well.

Figure 1 Origin of Lean and Six Sigma

1.3Combination of Lean and Six Sigma

Lean Manufacturing focuses on reducing cycle time and increasing process speed. Its goal isthe removal of non valueadded process steps or time traps from the process. Lean is a greatmethod to help organize work areas, reduce WIP (Work-In-Process), and speed material flowthrough the entire manufacturing process. Successful Lean initiatives yield lower inventory cost,higher productivity and flexibility, and faster response time to the customer.

Six Sigmais a statistical quality goal that represents the achievement of a quality level equal tono more than 3.4 defects per million opportunities. For most companies, this is a significant if notradical improvement in quality. But Six Sigma is more. It also focuses on reducing defects andvariability within a formalized project management structure. In fact, the management structurefor executing and managing projects is a real strength of the Six Sigma approach. Whenexecuted well, Six Sigma can help an organization achieve very significant improvements inquality, reduction of defects, and ultimately lower cost. Six Sigma is not only for manufacturing,but any operation where an opportunity exists for error, including order entry, customer service,sales, HR, etc.

2 Lean Manufacturingand its Tools

Waste elimination, continuous one-piece workflow, and customer pull are the basic elements of lean manufacturing. Focusing these elements in the areas of cost, quality, and delivery forms the basis for a lean production system.

Lean techniques can also be applied to the service industry. In the service industry eliminating waste is the process of eliminating anything that does not add value to your customer. Here is the list of tools being used in lean

• Value Stream Mapping
• One-Piece Flow
• 5 S System
• Setup reduction / quick changeover techniques
• Pull / Kanban
• Cellular Manufacturing
• Total Productive Maintenance (TPM)
• Jidoka
• Visual Management
• Kaizen

2.1 Value Stream Mapping

Value Stream Mapping is a method of visually mapping a product's production path (materials and information) from "door to door". VSM can serve as a starting point to help management, engineers, production associates, schedulers, suppliers, and customers recognize waste and identify its causes. The process includes physically mapping your "current state" while also focusing on where you want to be, or your "future state" blueprint, which can serve as the foundation for other Lean improvement strategies.

2.2 5s System

5S System is an approach to improvement within a facility or manufacturing plant that focuses on organization, cleanliness and standardization to improve profitability, efficiency, service and safety. The basis of a Five-S System is not very complicated. They are actually based on common sense.5S stands for 5 Japanese words all starting with S.

Table: 1 5S table

2.3 Visual Control

The intent of a visual factory is that the whole workplace is set-up with signs, labels, color-coded markings, etc. such that anyone unfamiliar with the process can, in a matter of minutes, know what is going on, understand the process, and know what is being done correctly and what is out of place.

2.5 One piece flow

One piece flow (also commonly referred to as continuous flow manufacturing) is a technique used to manufacture components in a cellular environment. The cell is an area where everything that is needed to process the part is within easy reach, and no part is allowed to go to the next operation until the previous operation has been completed.

The goals of one-piece flow are: to make one part at a time correctly all the time to achieve this without unplanned interruptions to achieve this without lengthy queue times.

2.6 Kanban

Kanban is a Japanese word that means "instruction card". Kanbans are manual pull devices that allow an efficient means to transfer parts from one department to another and automatically reorder products using minimum/maximum inventory levels. A Kanban is a signal, such as an empty container returned to the start of the assembly line, which signals the need for replenishment of materials to a user.

Fig 2Types of Kanban

2.7 Total Productive Maintenance (TPM)

Total Productive Maintenance (TPM) is an initiative for optimizing the effectiveness of manufacturing equipment. TPM is team-based productive maintenance and involves every level and function in the organization, from top executives to the shop floor. The goal of TPM is "profitable PM." This requires you to not only prevent breakdowns and defects, but to do so in ways that are efficient and economical. To achieve this goal you will need to master four techniques:

• Preventive maintenance - preventing breakdowns
• Corrective maintenance - improving or modifying equipment to prevent breakdowns or to make maintenance easier
• Maintenance prevention -designing and installing equipment that needs little or no maintenance
• Breakdown maintenance - repairing after breakdowns occur

The following 8 activities are the most common for implementing TPM effectively. They form the foundation to support any TPM effort. Not all of these strategies are implemented at once...you will develop a sequence that fits your situation.

Fig 3Strategies of TPM

2.8 Jidoka

Jidoka,as practiced at has several meanings. It may mean “automation with human intelligence”. It is also refers to the practice of stopping a manual line or process when something goes amiss.

2.9 Takt Time
Lean manufacturing uses Takt Time as the rate or time that a completed product is finished. If you have a Takt Time of two minutes that means every two minutes a complete product, assembly or machine is produced off the line. Every two hours, two days or two weeks, whatever your sell rate is your Takt Time.

2.10 Visual Management

The intent of a visual factory is that the whole workplace is set-up with signs, labels, color-coded markings, etc. such that anyone unfamiliar with the process can, in a matter of minutes, know what is going on, understand the process, and know what is being done correctly and what is out of place.

2.11 Kaizen

Kaizen (pronounced ki-zen) is a Japanese word constructed from two ideographs, the first of which represents change and the second goodness or virtue. Kaizen is commonly used to indicate the long-term betterment of something or someone (continuous improvement) as in the phrase Seikatsu o kaizen suru which means to “better one’s life.”

3 SIX SIGMA

TheuniquecontributionoftheconceptofSixSigmaisthedevelopmentofauniform waytomeasureandmonitorperformanceandtosetextremelyhighexpectationsand improvementgoals. Themeasuringandmonitoringperformanceissuedealswitha varietyofstatisticalapplications,butallofthestatisticalanalysishasthegoalofmanagingandreducingvariationandwasteinproductiveprocesses.ASixSigmalevelof performancemeansthattherewillbeonly3.4defects,orless,permillionopportunitiesforerror.

"A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding and customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business process"

Six Sigma aims at a statistically calculated process target of 3.4 defects per million opportunities, dpmo. According to Pyzdek companies traditionally have accepted that their processes perform at a level of three to four sigma, which translates to 6,200 to 67,000 dpmo. According to Six Sigma a manufacturing process with a normally distributed output and a standard deviation 6∂, has to display a distance of six standard deviations between process target and the closest tolerance limit and corresponds to a Process Capability Ratio Cp of 2.01. This is illustrated in Figure 3.1.

Figure 4 Six Sigma Process Variation

Pyzdek means that Six Sigma is focusing on improving quality by helping corporations to produce better and cheaper products, faster. Pyzdek claims that there is a clear connection between which sigma level a company is operating at and the cost of poor quality. Furthermore Pyzdek states that a company operating at a level between three and four sigma spends about 25-40 per cent of their annual turnover taking care of problems.

ThesimplestdefinitionforSixSigmaistoeliminatewasteandtomistakeproofthe processesthatcreatevalueforcustomers. Yes,thereisagooddealofdiscussionaboutstatisticsrequiredtounderstandSixSigma.Thediscussionofthestatisticalanalysiscomes laterinthisbook.However,aSixSigmainitiativeismoreaboutmanagerialinnovation thanaboutstatisticalprocesscontrol.Inessence,aSixSigmainitiativeleadstoaculture thatstrivesforcontinuousimprovementofproducts,services,processes,andbehaviors. BeforedelvingmoredeeplyintoSixSigma,examiningwhySixSigmahasemerged isimportant.SixSigmaemergedasanaturalevolutioninbusiness.Itisnotaradicalbreak- throughidea.WhilethetermSixSigmaiscatchyandfresh,mostofthetoolsandtechniquesassociatedwithSixSigmahavebeeninexistenceformanyyears.SixSigma emergedbecauseofthecurrentbusinessenvironment.Thecurrentbusinessenvironment nowdemands andrewards innovationmorethaneverbefore.

One of the most powerful tools that Six Sigma offers toan organization is a structured approach to problem solving. In particular, there are threebasic goals pertaining to business, technology, andculture that are part of this pursuit for world-classquality. First, Six Sigma supports the long-termbusiness plan to achieve customer satisfaction whilesimultaneously increasing market share and profitmargin. Next, leaders are trained to use state-of-the-arttechnology to meet performance goals. And finally,Six Sigma breeds a world-class culture to maximizecompetitive advantage. [5]

3.1 Methodology and chosen tools in the DMAIC Project

As mentioned previously the author used Six Sigma methodology DMAIC in the practical improvement project concerning the machining device.

3.1.1Project Charter

This tool clarifies the purpose and current status in the project. The tool was also a way to ensure that the improvement team will meet the expectations from the sponsor.

3.1.2 Activity Chart

This is tool of project management and shows the estimated start, end and duration of each activity in the project.

3.1.3 Process Mapping

This tool gives an overview to the studied process and all members of the improvement team get a common view of the situation.

3.1.4 Pareto Chart

This tool brings out the most common reasons to problems and which problems are the most important to work with.

3.1.5 Cause-and-Effect Diagram

This tool is helpful to find underlying causes of the problem. It's easy to use and often gives appreciable results. The tool was carried through with brainstorming and post-it notes.

3.1.6 Process FMEA

This tool detects potential problems but also gives these problems a priority number. It's easy to use and some members of the team are already familiar with the tool from earlier projects in the organization.

3.1.7 Tree Diagram

This tool gives suggestions for measures to improve the current situation and also prioritizes them with respect to viability and efficiency. The tool is carried through with brainstorming.

3.1.8 Matrix Diagram

This tool helps to prioritize among different measures by visualizing which measures that solve the different problems.

3.1.9 Control Charts

This tool plots a selected quality characteristic, found from subgroups of observations, as a function of sample number.

3.1.10 Poka Yoke

This tool has another name mistake proofing tool. This used to design the product so that chance of error is minimized.

3.1.11 ANOVA

ANOVA stands for analysis-of-variance, a statistical model meant to analyze data. Generally the variables in an ANOVA analysis are categorical, not continuous. The term main effect is used in the ANOVA context. The main effect of x seems to mean the result of an F test to see if the different categories of x have any detectable effect on the dependent variable on average.

3.1.12 Regression

Technique of fitting a simple equation to real data points is called regression. The most typical type of regression is linear regression (meaning you use the equation for a straight line, rather than some other type of curve), constructed using the least-squares method (the line you choose is the one that minimizes the sum of the squares of the distances between the line and the data points). It's customary to use "a" or "alpha" for the intercept of the line, and "b" or "beta" for the slope; so linear regression gives you a formula of the form: y=bx+a

Figure 5 Regression Line

3.1.13 Design of Experiments

A Design of Experiment (DOE) is a structured, organized method for determining the relationship between factors (Xs) affecting a process and the output of that process (Y).
Also DOE refers to experimental methods used to quantify indeterminate measurements of factors and interactions between factors statistically through observance of forced changes made methodically as directed by mathematically systematic tables.

Figure 6Commonly used tools in the different phases of a DMAIC project

4 Lean Six Sigma

Lean Six Sigma is the combination of Lean Manufacturing and Six Sigma. One tool attacks Speed and wastes and other tool attacks variation. So both tools work together for maximum speed, less variation and better productivity. In Lean Six Sigma commonly following tools are used most effectively.

Figure 7Commonly used tools in Lean Six Sigma

Conclusion

A combination of both can provide the philosophy and the effective tools to solveproblems and create rapid transformational improvement at lower cost. Potentially,this could increase productivity, improve quality, reduce costs, improve speed, create asafer environment for patients and staff and exceed customer expectations. Integrating Lean and Six Sigma creates a win win situation.

Lean Six Sigma implementation requires a very good top level management commitment. But in developing countries it is very less. Chief executive officers are hesitant to invest in the training of these tools. But if they want to remain competitive it is inevitable.

References

1. Pyzdek, T. (2003)“The Six Sigma Project Planner” New York, NY: McGraw-Hill.

2.Pande, S., Neuman, R.P. & Cavangh R.R. (2000) “The Six Sigma Way – How GE, Motorola and other top companies are honing their performance” New York, NY: McGraw-Hill.