Variance Reduction International, Inc. Lean Six Sigma VarianceReduction.

com (909) 484-2950

Lean Six Sigma Principles

Specify value in the eyes of the customer
Identify value stream; eliminate waste and variation Make value flow at pull of the customer

Involve, Align & Empower Employees

Continuously improve knowledge in pursuit of perfection

Lean Sigma Process Improvement Cycle

VOICE OF CUSTOMER Gap Identified
STRATEGIC PLAN

Better
BUSINESS UNIT SCORECARD

UCL Avg LCL

BUSINESS OBJECTIVES

Faster Financials

BUSINESS MEASURES VALUE STREAM

PROCESS SCORECARD

Tools & Methodology

UCL Avg LCL

PROCESS FLOW

PROCESS MEASURES
X's Y's

Deployment IPO
Executive Ownership Champion Involvement Expert/ Specialist Selection Project Selection Training / Mentoring Accountability Motivation / Reward Leadership Team

PROCESS Lean Sigma Deployment

Projects Completed (%) Cycle Time (months) ROI ($MM/year) Customer Satisfaction (1-5) Recognition (copied)

Supplier Material Type

Better
S
y Yield

Amount of A
Temperature Design Type SOPs

Six Sigma
InProcess Storag e

Results Driven IPO Diagram

CODN (Finance) Communication

Cost

Team Dynamics
Turnover Rate Cell Layout Design Piece Flow Manpower Setup SOPs Maintenance SOPs Cell Cleanliness

Lean
Time

What is Lean and Six Sigma?

Lean, pioneered by Toyota, focuses on the efficient operation of the entire value chain. Focus areas: Remove non-value added steps to: Reduce cycle time Improve quality Align production with demand. Reduce inventory. Improve process safety and efficiency. Six Sigma, developed by Motorola, made famous by GE, it can be defined as a: Measure of process capability Set of tools Disciplined methodology Vision for quality Philosophy Strategy

Lean Sigma is a combination of two powerful and proven process improvement methods Lean and Six Sigma, that builds on existing organization capability in quality, statistics, and project execution.

Lean Sigma: A Set of Tools

Measurement System Analysis
Operator 1 Item Test 1 Test 2

Glass Inspection Test Operator 2

Test 1 Test 2

Operator 3 Test 1 Test 2

Map the process to determine where defects are being created

Use control charts to understand & identify common & special causes

1 2 3 4

5
6 7 8 9 1 0

Verify assessment/ measurement systems

RISK PRIORITY NUMBER (RPN) = SEVERITY X 0CCURRENCEX ESCAPED DETECTION

Score Category
Severity (SEV) Occurrence (OCC)

5
Severe

4
High

3
Moderate

2
Minor

1
Negligible

Run

AB

...

1
2

+ +

+ +

+
+

Very High

High

Moderate

Low

Very Low

3 4

Document failure modes Escaped Very High High Low Very Low for products andModerate processes Detection (DET) to identify defects' root cause

Designed experiments to = y + A A + B B + AB A B y make process robust to 2 2 2 variation

= s s + A A + 2 B B + 2 AB A B 2

How is Lean Sigma different and similar to past quality and statistical efforts?

Sponsored and directed by leadership Aligned with business objectives and tactics Focused on delivering business results Track record for delivering business results Disciplined and systematic execution process Brings in new tools to most companies DOE, hypothesis testing, FMEA, Kanbans, PokaYoke

Uses many tools already familiar to many people fishbone, process flow, SPC, brainstorming Aligned with quality efforts Uses a logical problem solving approach that will not be new to some Aligned with past quality and reliability efforts TQM, Baldrige, Deming

Focus Area of Lean and Six Sigma

Lean: Reduction of the 7 hidden wastes or non-value added activities to reduce cycle time. Six Sigma: Reduction of variability to improve quality. Both Lean and Six Sigma Tie Improvements to $$$

Overlap of Lean and Six Sigma Tools

Cycle Time Reduction Variance Reduction

Mapping Logical Physical PF JIT Scorecard Time Quick SOP Changeovers Mistake Single Piece Proofing Flow 5Ss $$$ Visual Lean Controls

Testing Correlations Hypothesis DOE FMEA MSA Six Sigma

IPO CE CNX

Combining Lean and Six Sigma Maximizes the Potential Benefits

Six Sigma Improve Quality
Overall Yield as a Function of Sigma Level & Process Steps

Sigma Level
No. of Parts or Process Steps

+/- 3
93.32% 70.8% 50.1% 3.2% 0.1% 0.0%

+/- 4
99.379% 96.9% 94.0% 73.2% 53.6% 4.4% 0.2% 0.0%

+/- 5
99.9767% 99.884% 99.767% 98.84% 97.70% 89.0% 79.2% 31.2% 9.7% 0.0%

+/- 6
99.99966% 99.998% 99.997% 99.983% 99.966% 99.8% 99.7% 98.3% 96.7% 84.4% 71.2% 18.3% 3.3%

1 5 10 50 100 500 1,000 5,000 10,000 50,000 100,000 500,000 1,000,000

Sigma Capability
The number of Sigmas between the center of a process and the nearest specification limit 3 Process Centered We make more than 3 Process customer needs because Upper Lower some of what we make Specification Specification is waste Limit Limit Process is WIDER than the specifications
Determined by the customer Determined by the customer

WASTE
-6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6

3 Process has 66,807 dpm vs 3.4 from a 6

6 Process

process

-6 -5 -4 -3 -2 -1 0 +1+2+3+4+5+6

6 Process Centered We make as much as the customer needs and have very little waste Process FITS within the specifications

The First Step is Process Knowledge

Long Term Success

Return on Investment
Process Improvement The 1st Step is Process Knowledge

80 Percent of the Gain with 20 Percent of the Complexity

Most of the 80% improvement is possible with the basic quality and statistical tools.
Improvement 20% Tool Complexity

Sustained Improvements without Capital Dollars

Sustainable Results Process improvements from Lean Sigma Projects are sustained. Typically, results are audited at 4 and 12 months after implementing changes. Not Capital Driven Lean Sigma projects are NOT Capital driven. Most improvements are made by changes in the SOP.

Lean Six Sigma Roadmap DMAIC Strategy

Define Identify and Prioritize Opportunities Select Your Project Define the Goals and Objectives Form Cross functional Team Understand Customer Requirements Measure Define and Analyze the Current Process Assess the Capability of the Measurement Process Assess the Current Capability of the Process Variance Reduction

DMAIC Cont.
Analyze Identify the Key Input Variables Discover the Relationship between the Inputs and Outputs Identify the Root Causes of the Problems Improve Identify and Test the Proposed Solutions Re-assess Capability Implement Solution Control Document Results and Return on Investment Take Actions to Hold the Gains Celebrate and Communicate

Variance Reduction International, Inc. President, Sally Ulman

Mary Ann Sally Ulman teaches and consults on the subject of applications of statistical methods. She is an experienced facilitator in the areas of team building, problem solving, metric development, and implementation of process improvement strategies. Ms. Ulman left Chevron, USA after sixteen years where she worked as a Quality Facilitator, Corrosion Engineer, and Industrial Water Treatment Technologist throughout Central California and Sumatra, Indonesia. She has taught and consulted for Chevron, Caltex Pacific Indonesia, GlaxoWellcome in Pakistan, GlaxoSmithKline in Bangkok, Kuala Lumpur, London, Jakarta and India, Texaco, Baker Petrolite, Aera Energy, National Association of Corrosion Engineers, Farwest Corrosion, Mazda USA, Teac America, American Business Communications, California Training Cooperative, Auto Meter, PLCs Plus, United Way Agencies and various public seminars. Her extensive consulting background involves industrial and service applications of DOE, SPC, LeanSigma, reliability, management and team building techniques. She received her B.A. in Physical Education from California State University, Northridge. She attained Six Sigma Black Belt certification from University of Texas and Master Black Belt certification from Air Academy Associates. In addition she also holds a California Junior College Teaching Credential, Corrosion Technologist and Coating Inspection Certification from the National Association of Corrosion Engineers. She is now President of Variance Reduction International Inc. and works as an instructor and consultant for Air Academy Associates and is the Six Sigma instructor at San Diego State University.