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Julian Kalac, P.Eng
Lean Six Sigma Master Black Belt
June 2012
 Focus and align the flow of ideas, processes,
performance and profitability within the business
 Learn how to find new opportunities, organize the
concepts learned and prioritize and/or defer others
Objectives:
 Enable more product launches with shorter lead
times
 Increase first-time quality and on-time deliveries
 Enhance and sustain productivity improvements
◦ Output and “Value-add” per worker
◦ Output and “Value-add” per dollar invested
What:
A process of ongoing, non-static, constantly
renewed mindset of adding business value
and increased productivity
How:
Trough demonstrated creativity and significant
changes getting ideas & turning them into
reality
Where:
in everything we do, enterprise-wide
Risk &
Reward
Continuous
Improvement
•Everyday culture of change
in how and what we do
•Focus on maintaining &
improving process
precision, accuracy and
discipline
•Often savings are not
strictly monitored but just
put back into the business
•Can support & narrow
Breakthrough Innov.
Amount of Resources and Activity
Incremental
Innovation
•Relatively small
improvements
that are faster,
better cheaper,
•Savings show up
in bottom & top
line
Distinctive Innovation
•Significant advances and
improvements by extending existing
technologies/approaches
•Adapting “other industry/sector
technologies/approaches
•Example: “Lean”/JIT/Single-piece-
flow/Pull Systems in health care
Breakthrough &
Disruptive
Innovation
•Fundamentally new
technologies/approaches
•Implementing things
previously thought to be
not possible
•Often a birthplace of
Distinctive & Incremental
Innovation
•Can fuel and clash with
Conti. Impr. and process
discipline
Supplier
“Push”
“Customers gambling in
Nevada have figured out
how to develop an
application for counting
cards beyond what Apple
imagined”
Customer
“Pull”
• New colours
• Video features
• More memory
• Longer battery life
• Predictive text
Ideas Inventions Innovation Operations
Production
Service
The Ideas-Inventions-Innovation-Operations-Service (IIIOS) Roadmap:
Sales &
Marketing
Research &
Development
Product
Development
Operations
Production
Customer
Service
The Hydrogenics Business Flow:
Productive creativity and focused process discipline
will lead to a successful sustainable harvest of results
•To help explain the
Toyota Production
System to employees
and suppliers, the
“House of Toyota”
graphic was created by
Taiichi Ohno and Eiji
Toyoda.
•They chose the house
shape because it was a
familiar one – and also
conveyed stability.
•The roof contains the
primary goals of TPS:
superior quality, cost
and delivery through
waste elimination
Change Management Teams
TPM JIT
Point-of-Use
Poka-yoke
Pull System and KanbanCellular and Flow
Autonomation
Standard Work
Self inspection
Visual Workplace
Quick Changeover
Layout
Batch Size Reduction
5S VSM
Continuous Improvement Kaizen Blitz
“Future competition will not be
between products and services…
… it will be between processes.”
Dr. Robert Gee, National Graduate School
“In order to develop a culture
that consistently improves
performance, you have to
focus not just on the end
result (solution focus) but also
on how you get there (process
focus).”
Michael Kukhta, Master Black Belt
PDSA Cycle:
Plan, Do, Study, Act
 Plan a step
 Take a step
 Study the outcome
 What worked?
 What didn’t
work?
 What did we
learn?
 Act on the difference
between what you
expected & what you got
 Keep learning
This Way:
Plan
Do
Act
Check
Plan
Do
Re-Act
Check
Not this Way:
Dr Edwards
Demming:
Lack of
knowledge… that
is the problem
There is no
substitute for
knowledge
Study
Analyze
Study
Analyze
From Dr. Joseph Juran’s teaching:
 Removal of Special Cause only
brings to system back to where it
should have been in the first place
 The important problems of
improvement commence once you
achieve statistical control
 “There is here, the same widespread
unsupported assumption that the
bulk of defects are operator
controllable, and that if operators
would only put their backs in to it,
the plant’s quality problems would
shrink materially”
◦ (J. Juran, Industrial Quality Control 1966)
Juran’s Trilogy:
1) Quality Planning
Develop Standards, Designs
Processes & Systems that
enable the possibility of
compliance
2) Quality Compliance
Use the Processes & Systems
to measure performance
to Standards
3) Quality Improvement
Improve Performance to
standards (compliance)
Improve Standards, Designs,
Processes & Systems
SCOR Model
Customer’s
Customer
Supplier’s
Supplier
Supplier
Internal or
External
Customer
Internal or
External
Your Company
Plan
Make DeliverSource Make /
Repair
DeliverMakeSourceDeliver SourceDeliverSource
Return Return Return
Return Return Return Return Return
Plan Plan
Provides Framework for your Transformation / Improvement Projects.
• Defining the boundaries / scope of the supply chain .
• Evaluate the supply chain’s strengths and weaknesses.
• Industry benchmarks, standardized terms, metrics,
Enables a total enterprise view of a supply chain
 The systematic elimination of waste and re-alignment of resources to
deliver value to the customer faster, better, & more consistently
 Lean also is:
◦ Pursuit of excellence
◦ Continuous Improvement of performance and quality
◦ .
◦ Increasing inventory “turns” and throughput
◦ Simplifying and redefining processes
◦ Measuring & monitoring processes
◦ Empowering the workforce
Leading to Leading to
Eliminate
Waste
Reduced Cycle
Times
Increased
Capacity
Focus: Eliminate waste, non-value add steps, process
constraints and bottle necks that cause problems in work
throughput
Approach: Intuitive and broad - “inch-deep, mile wide”
The Five Principles of “Lean Thinking”
1. Define value from the perspective of the Customer
2. Map the value stream
3. Get the stream to “flow” by eliminating waste
4. Allow the customer to “pull” value from the stream
5. Pursue perfection (continual improvement)
MEASURE
•Map/measure the
process
•Collect lots of data
ANALYZE
•Organize and analyze the
data and information to
Identify failure modes,
problems, root causes
CONTROL
•Maintain, monitor and
control variation
•Preventively fix root causes
IMPROVE
•Plan, apply, deploy Improvement Tools
•Correctively fix failure modes
DEFINE
•Identify standards, metrics, objectives, CUSTOMER PROBLEMS
Define
Measure
AnalyzeImprove
Control
Results
Define
Measure
AnalyzeImprove
Control
Results
σ Use data-driven, measurement-based, statistical methods
σ Think critically, deeply and analytically to improve performance
σ Eliminate non critical business issues and concerns
σ Focus: Surgical “inch-wide, mile-deep” investigation and resolution
σ Approach:
σ Solve problems at the system and root cause level
σ Relentlessly pursue drastic reductions in variation then control and manage
whatever variation is left over
Applied projects
following the
DMAIC Model
 In the 1980’s, Engineers and
Management at Intel and Motorola -
realized that variance reduction and
lower defect rates were one of the
keys to the success of Japanese
competitors
 Is “Six Sigma Quality” – 3 DPM –
good enough for your process? (e.g.
producing semiconductors?)
 Dr. Mikel Harry researched these
successes in variance reduction and
formed them with others into the
“Six Sigma” programs that we are
familiar with today
“Sigma” Quality Level 1 2 3 4 5 6 7
Cost of Poor
Quality
(COPQ)
$’s
?
% First Pass Yield (FPY) 68 95 99
99.977
99.99966
99.379
Defects/million (DPM) 690K 308K 67K 6K 230 3.4
“Sigma” Quality Level 1 2 3 4 5 6 7
Cost of Poor
Quality
(COPQ)
$’s
?
% First Pass Yield (FPY) 68 95 99
99.977
99.99966
99.379
Defects/million (DPM) 690K 308K 67K 6K 230 3.4
Accurate
Precise
Processes Processes Process
Start
Process
Finish
Process
Steps
Processes Processes
Organization Customers End-use
Customers
Suppliers
Sub-
Suppliers
Process
Steps
Return Return
Plan
Make DeliverSource Make/Repai
r
DeliverMakeSourceDeliver SourceDeliverSource
Return Return Return Return Return
Return
SCOR Supply Chain Model
Single Piece Flow Just-In-Time Eliminate Waste
•Process parts one-at-a-
time or in small lots
instead of in large
batches or economies of
scale
•Quick changeovers
•Balanced and
continuous flows instead
of stop and start
processing
•Have just the right
amount of inventory you
need, when you need it,
where you need it
•Optimize the amount
of inventory required
•Ensure that your
resources are ready to
support the flow
•Never knowingly pass
on a defect
•Improve the capability
of your processes
•Fix failure modes
when they occur
•Determine and resolve
the deeper root causes
= =
The Toyota Production System
Model by Michael Kukhta Reference: Senji Niwa, from the
Shingijutsu Organization. Niwa-san also worked directly for
Toyota’s Taiichi Ohno (TPS creator) for 18 years.
“Classic Lean”
Strength
“Supply Chain
Management” Strength
“Classic Six
Sigma” Strength
Numbers, words, quantities,
values stored sitting in piles or
queues waiting for future use
Charts, summaries, spread
sheets, etc. that organize the
data
Presentations, plans and tools
that explain and communicate
the information
Processes, organizations and
team using the information to
improve, manage, build
systems and develop cultures
Push the data “up” to become Wise
Always
loop
back to
check
the data
Wisdom
Knowledge
Data
Information
Where are you
looking from?
The WISDOM TOWER: Changing Perspectives
2) Clearly Define your problem
Example:
Too many mistakes in purchase request specifications are causing rework rates of
34%, high costs and late deliveries (less than 50% on time) to our customers
1) Find:
•Customer Issues
•Performance
Reviews
•Meetings
•New Projects
•Failures, Re-work
•Projects
•Continuous
improvement activities
•Champions
•Stakeholders
•Employees
•SCOR Maps
•Research
•Brainstorm
•Wait until the crisis
hits you
•Value Stream Maps
3) Clearly State the Initial Charter for your
project
(Set targets and timelines!)
Example:
This first phase of this project – by 3Q 2004 - will identify problems and root
causes in the purchase request process, target first pass yield rates of 95%, target
a 50% reduction in the Cost Of Poor Quality and increase on-time deliveries to our
customers to greater than 90%
4) Link improvement targets to customer
needs and organizational objectives
5) Create a Project Charter -
Resources, Milestones
 What are we Mapping? The flow or path of:
◦ People, Parts, Paper, Information, Electrons (IT, networks, computers)
 What status is the Map we are making?
◦ “As Was” – a historical reference or how the process used to be
◦ “Should Be” – the way documentation says it is supposed to be or the way you
think it is working
◦ “As Is” or “Current State” - an accurate reflection of how the process is actually
working. You must “walk” the process on the ground at the working level to
validate the “real” way
◦ “Future State” – a projection of how you would like the process to work
◦ “Utopian State” – the way the process could work if there were no restrictions or
boundaries on time and resources
Represents...
Some
Examples
are...
This
Symbol….
Start / Stop
* Receive
Trouble
Report
* System
Operable
Decision
Point
Approve /
Disapprov
e Accept /
Reject
Yes / No
Activity
Process
Step or
Activity
Connecto
r (to
another
page or
part of
the
diagram)
A
A
B
Represents
direction
of flow
Enjoy!
Fill kettle
with water &
plug in
Get coffee
from cupboard
I’m going
to have a
coffee
Instant
or
Brewed
Put coffee
into mug
Get mug
from cupboard
Pour hot
water into mug
A
Add cream
& sugar
Is it
to
taste
?
Yes
No
InstantBrewed
Process Flow Diagram:
Morning Coffee Flow Chart
High-Level Process Map
 Can show the link from
suppliers outside your
organization to the customers
you deliver your product or
service to
Mid-Level Process Map
 Can show your organization
within the larger organization
you work in
Detail-Level Process Map
 Show s the process within your
organization that you wish to
investigate further
Stop
Start
Stop
Start
Start
Stop
Stop
Product and Services
Cash/Funding
Information
Customer’s
Customer
Supplier’s
Supplier
SupplierSupplier CustomerCustomerYour Company
PlanPlan
Make DeliverSourceSource Make /
Repair
DeliverMakeSourceDeliver SourceDeliverDeliverSource
ReturnReturn ReturnReturn ReturnReturn
ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn
PlanPlan PlanPlan
VA/NVA Ratio= 46%
DPU = ____
RTYield = _____
SCORE CARD:
I’m going to
have coffee
Fill c.
maker
with
water
Scoop
Coffee
into
c. maker
Get &
place
Filter in
c. maker
Drink
coffee
Is
taste
OK
Brew
coffee
Pour c.
into cup
Add
cream &
sugar
Water Supply
Process
Shopping
Process
Electricity
Supply
Process
Eating
Equipment
Supply
Process
Tasting
Process
Housekeeping Processes
NVA = Non-value Added Time
VA = Value Added Time
VA Time
NVA Time
Temp of Water= ___
Quality of Water= ___
Pressure of Water= ___
Amount of Coffee= ___
Quality of Coffee= ___
Type of Coffee= ___
Defective Coffee= ___
60 sec 30 sec 60 sec 360 sec 10 sec 60 sec
10 sec 10 sec 5 sec 600 sec 30 sec
Is your error in the process or in the way you measure it?
Could it be that you actually are “good” but the error in the measurement
system shows that you are not “good”?
Overall Variation
Occurrence-to-
Occurrence ( or Piece-
to-Piece) Variation
Measurement System Variation
Repeatability:
Variation due to gage
or measurement tool
Reproducibility:
Variation due to people or
operators who are measuring
3) Who?
4) When?
5) How Much?
6) How?
2) Where?
1) What?
6) How will you collect it?
Sample Data Collection sheet
Data Collection Sheet
Process Name:
_____________
Process Step:
_____________
Location of
Measurements:
_____________
Measurement
Tool Used:
______________
Measurement
System Error:
_____________
Measurement
Number
Value Units
(e.g. inches)
Time of
Measurement
Person who
measured
1
2
3
4
5
Data Collection Sheet
Create a Data
Collection Plan:
The Seven “Muda” (the Japanese word for any activity that consumes resources
but adds not value; also known as “waste”)
◦ According to Taiichi Ohno’s enumeration of the types of waste commonly
found in physical production of tasks and conversion of activity into
services
1. Overproducing ahead of demand
2. Waiting for the next process step
3. Unnecessary transport of materials [and information]
4. Over-processing of parts due to poor tool and product design [extra and
over processing documents and approvals]
5. Inventories [of parts, data, information, people, electrons, cash] more than
the absolute minimum
6. Unnecessary movement of people [parts, data, information, electrons, cash],
during the course of work or processing (looking for things, drawings,
technical help, etc.)
7. Production of defective parts [and services]
8. Not Fully Utilizing your People : (The Greatest Waste of All)
◦ Under-Utilizing:
 Not applying and harvesting the full capabilities of your
employees
 Training but not using the capabilities learned
 Expecting high-performance from untrained or inadequately
trained people
◦ Over utilizing and over-relying on a few employees
 Over relying on a select few
 High overtimeIncessantly increasing time demands
 Unsteady flow and non-level loaded work- hurry-up and
wait
 High variation in processes – pressure and stress for people
◦ Uncertainty and conflict versus confidence and trust in the workplace
◦ How are you managing changing business and economic climate?
◦ The organizational culture is different, even within the parts of an organization:
Are you thriving, striving, dormant or
dying?
Observation
IndividualValue
464136312621161161
200
150
100
50
0
_
X=100.4
UCL=114.0
LCL=86.8
Observation
IndividualValue
464136312621161161
200
150
100
50
0
_
X=98.7
UCL=187.5
LCL=9.8
1
Process A shows controlled variation
Process B shows uncontrolled variation
A B
Common Causes
•Consistent
•Often
Special Causes
•Sporadic
•Sudden
Time Scale 
Histogram
Frequency
LSL USL
2 4 6 8 10 12 14 16 18 20
y
Unit of time
e.g. hours, months
 a bar chart for numerical
categories
bars need not be in
descending order
shape provides a form of
distribution of data
central tendency and
variability are easily
estimated
specification limits can be
superimposed to estimate
process capability
•time
•distance
•dimension
A method to display the “vital few” from the “trivial many.” These
charts are based on the Pareto Principle – 20% of the problems
have 80% of the impact. The 20% represents the “vital few.” The
Pareto chart helps you to arrange data in order of priority or
importance. 90
30
20
10
5
Frequency
Categories
Percentage
75%
25%
50%
20
180
140
100
60
TITLE
n = sample size
(time period)
LEGEND
REFERENCE INFO
date
initials
source
100 %
Types of Correlation
Strong Weak None
Positive
Negative
Y=f(x) Y=f(x)Y=f(x)
x x x
Method
Time Other
Environment
Criteria
Card
Face
Down
and On
Target
EFFECTCAUSES
“Card Drop” Process
where the desired
output is to drop cards
face down onto a target
WHY DOES IT
TAKE SO LONG
TO MASK PART?
TAPE DOES
NOT STICK
WHY DOES
TAPE NOT
STICK?
PART HAS
SOAP
RESIDUE
WHY IS
THERE SOAP
RESIDUE?
RINSE CYCLE
INADEQUATE
POWER
WASHER RINSE
CYCLE
BROKEN
WHY IS POWER
WASHER
BROKEN?
WHY IS RINSE
CYCLE
INADEQUATE?
OLD MACHINE
NOT REPLACED
WHY IS OLD
MACHINE NOT
REPLACED
CONGRESSIONAL
BUDGET PROCESS IS
FLAWED
Overview of How FMEA Works
Process
Step or
Input
Potential
Failure
Mode
Potential
Failure
Effects
Potential
Causes
of
Failures
Current
Process
Controls
Severity
Rating
(SEV)
Occur-
rence
Rating
(OCC)
Indetect-
ability
Rating
(DET)
Risk
Priority
Number
(RPN)
What
is the
Input?
What
can go
wrong
with
the
Input?
What
is the
Effec
t on
the
Out-
puts?
How
bad is
it?
What are
the
Causes?
How
often
do they
Occur?
How can
they be
found or
prevent-
ed?
How
well can
they be
prevent
-ed?
Where is
our
greatest
Risk?
Item
No. Problem/Opportunity Benefit
Person(s)
Responsible
Due
Date
%
Complete Comments
1
2
3
4
5
6
7
8
Kaizen Event Newspaper
Team: Kaizen Event:
Team/Work Group Members
Wwww, Xxxx, Yyyy, Zzzz
Updated:___/___/___
Display Board for _____ Team
Pareto DiagramFrequency
Histogram
Frequency
LSL USL
y
Control Chart
UCL
CENTRELINE
LCL
Seiri Seiton Seison Seiketsu Shitsuke
Sort Straighten Shine Standardize Sustain
( )
Separate the necessary from the
unnecessary
Organize in your layout in a logical
sequence
Clean, fix and change your
workplace
Build systems and processes to
support 5S activities
Ensure that the
standardized methods,
tasks and techniques
are followed
Organize by
frequency
of use
Set
Baseline
Contin-
uously
Improve
Keep?
Place in
Local 5S
Holding
Area
Place in
“Last Chance”
5S Holding Area
Record,
Archive
records
Clean, Label, Tidy
Fix, Map, Paint, File,
Systematize,
Standard
Operating
Procedures
Audit,
Monitor
No
Yes
…improve our
workplace
organization
and safety
We want
to:
Allocate
time &
Resources
Develop
5S Plans
&
Standards
Separate
/Sort Keep?
Destroy,
Scrap,
Dispose
No
Yes
 Level 1 (Workstation Achievements)
◦ Data and reports (hard & soft) are sorted into piles, sections, drawers and
multiple file locations: Cluttered
 Level 2 (Workstation Achievements)
◦ Data & reports are sorted into files, binders and single locations
◦ Metrics, basic labelling, some visual controls
◦ Appearance is cleaner and more organized
 Level 3 (Workstation Achievements)
◦ All files, data and reports are organize and labelled
◦ Metrics, information and 5S maps are available and posted
◦ Maintenance of 5S activities, audits of 5S performance
 Level 4 (Work Group Achievements)
◦ Common standards for metrics, filing, labelling, file naming
◦ Simple, clear and effective Visual Controls & Driver Measure Boards
◦ Maintenance of Work Group 5S activities, audits of 5S performance
 Level 5 (Site and Business Unit (BU) Achievements)
◦ Common standards for metrics, filing, labelling, file naming
◦ Simple, clear and effective Visual Controls
◦ Maintenance of 5S activities, 5S audits
Can usually find
things
Can find things in
a reasonable
amount of time
Can find any file
or doc. In 30
seconds
Close colleagues
can find any file
or doc. In 30
seconds
Any colleague
can find any file
or doc. In 30
seconds
1. Specify value from the standpoint of the end customer by
product family.
2. Identify all the steps in the value stream for each product
family, eliminating every step and every action and every
practice that does not create value.
3. Make the remaining value-creating steps occur in a tight
and integrated sequence so the product will flow smoothly
toward the customer.
4. As flow is introduced, let customers pull value from the next
upstream activity.
5. As these steps lead to greater transparency, enabling
managers and teams to eliminate further waste, pursue
perfection through continuous improvement.
 Cycle Time is the actual production rate – It is the time
between two successive finished items coming out of your
production cell.
 Cycle Time is dictated by the slowest (longest) operation
in the cell.
40
min
20
min
25
min
15
min
30
min
1
54
3
2
•What operation controls the
cycle?
•What is the Critical Path?
•How can you relieve or shift the
bottleneck?
Source: Improve Phase 26jul07
 Bottleneck
◦ The point which is currently reducing the flow or slowing
the entire process
◦ A managed buffer before a bottleneck is necessary
◦ A bottleneck WILL exist in every process
◦ Bottlenecks move !
◦ High WIP can mask the bottleneck
◦ Flex to the bottleneck
◦ The people working at the bottleneck take breaks, not the
bottleneck
Pull Systems
Production scheduling method used to link downstream
activities to upstream activities
Work begins based upon a demand signal (kanban) from a
downstream customer, either internal or external
Avoids overproduction, work backlog, and disconnects within a
process
Nothing is produced until the downstream customer signals a
need
 Takt Time
◦ Drum beat of production
◦ Based on actual internal or external demand
Available production time
customer demand
Takt Time =
 Kanban
◦ A signal to produce
◦ An empty square, bin, shelf, cart, or kanban card
◦ Response time should be worked out & agreed in advance
◦ Compensates for inability to pull
◦ Can extend through electronic notification to suppliers
using automatic messaging and triggers
 Setup Time
◦ Tool changes & preparation to process first piece
◦ Starts when last piece of previous job is complete; ends
when first good piece of next job is complete
 Internal set-up: While machine is shut-down
◦ Strive to minimize this as process is not producing parts
 External set-up: While machine is working
◦ Maximize through kitting, point-0f use tools/parts and
preparation
Mistake proofing
◦ Eliminate/minimize chance for human error
◦ Poka yoke =
 to avoid (yokeru) inadvertent errors (poka)
◦ Detection Poka yoke
 Notifies of imminent process failure but requires
operator interaction to avoid mistakes
◦ Prevention Poka Yoke
 Stops the process before failures occur
 Does not allow defects to pass through the process
 Elements of Lead Time
◦ Lead Time = total process time from initiation to design to
build to ship to payment
◦ Batch & Queue – Accumulate orders, then wait to be
processed
◦ Setup time – prepare to process next job
◦ Run time – processing time per unit
 Often less than 1% of cycle time
 Only value added step of Lead time
◦A cell organizes
equipment and
operations in a process
sequence for a specific
output
◦This is opposite
“Process centered
Islands” where
equipment / activities
are grouped by
functional operations
Bottleneck Management:
• Maintain buffer in front of
bottleneck
• (never starve the bottleneck
!)
• Improve bottleneck operation
• Cross train on bottleneck
• Creates a visual work place
• Continuous Improvement
• Cell technical & logistical
support
• Balance activities / operations
• Focus on balanced, continuous
pull through the cell
•Only after specifying value and mapping the
stream can lean thinkers implement the third
principle of making the remaining, value-creating
steps flow.
•Such a shift often requires a fundamental shift
in thinking for everyone involved, as functions
and departments that once served as the
categories for organizing work must give way to
specific products; and a "batch and queue"
production mentality must get used to small lots
produced in continuous flow.
•“Flow" production was an even more valuable
innovation of Henry Ford¹s than his better-
known "mass" production model.
Item
No. Problem/Opportunity Benefit
Person(s)
Responsible
Due
Date
%
Complete Comments
1
2
3
4
5
6
7
8
Kaizen Event Newspaper
Team: Kaizen Event:
Kaizen Newspaper
“It isn’t the changes that do you in, it’s the
transitions.”
(From: “Managing Transitions: Making the Most of Change” by William Bridges)
Time
What is your path? Who is with you?
How many are with you?
Ending,
Losing,
Letting Go
The
Neutral
Zone
The New
Beginning
• “Before you can begin
something new, you have
to end what used to be”
• “Before you can learn a
new way of doing things,
you have to unlearn the
old way isn’t the changes
that do you in, it’s the
transitions.”
• “Change causes transition,
and transition starts with
an ending”

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Innovation training

  • 1. Julian Kalac, P.Eng Lean Six Sigma Master Black Belt June 2012
  • 2.  Focus and align the flow of ideas, processes, performance and profitability within the business  Learn how to find new opportunities, organize the concepts learned and prioritize and/or defer others Objectives:  Enable more product launches with shorter lead times  Increase first-time quality and on-time deliveries  Enhance and sustain productivity improvements ◦ Output and “Value-add” per worker ◦ Output and “Value-add” per dollar invested
  • 3. What: A process of ongoing, non-static, constantly renewed mindset of adding business value and increased productivity How: Trough demonstrated creativity and significant changes getting ideas & turning them into reality Where: in everything we do, enterprise-wide
  • 4. Risk & Reward Continuous Improvement •Everyday culture of change in how and what we do •Focus on maintaining & improving process precision, accuracy and discipline •Often savings are not strictly monitored but just put back into the business •Can support & narrow Breakthrough Innov. Amount of Resources and Activity Incremental Innovation •Relatively small improvements that are faster, better cheaper, •Savings show up in bottom & top line Distinctive Innovation •Significant advances and improvements by extending existing technologies/approaches •Adapting “other industry/sector technologies/approaches •Example: “Lean”/JIT/Single-piece- flow/Pull Systems in health care Breakthrough & Disruptive Innovation •Fundamentally new technologies/approaches •Implementing things previously thought to be not possible •Often a birthplace of Distinctive & Incremental Innovation •Can fuel and clash with Conti. Impr. and process discipline
  • 5. Supplier “Push” “Customers gambling in Nevada have figured out how to develop an application for counting cards beyond what Apple imagined” Customer “Pull” • New colours • Video features • More memory • Longer battery life • Predictive text
  • 6. Ideas Inventions Innovation Operations Production Service The Ideas-Inventions-Innovation-Operations-Service (IIIOS) Roadmap: Sales & Marketing Research & Development Product Development Operations Production Customer Service The Hydrogenics Business Flow: Productive creativity and focused process discipline will lead to a successful sustainable harvest of results
  • 7. •To help explain the Toyota Production System to employees and suppliers, the “House of Toyota” graphic was created by Taiichi Ohno and Eiji Toyoda. •They chose the house shape because it was a familiar one – and also conveyed stability. •The roof contains the primary goals of TPS: superior quality, cost and delivery through waste elimination
  • 8. Change Management Teams TPM JIT Point-of-Use Poka-yoke Pull System and KanbanCellular and Flow Autonomation Standard Work Self inspection Visual Workplace Quick Changeover Layout Batch Size Reduction 5S VSM Continuous Improvement Kaizen Blitz
  • 9. “Future competition will not be between products and services… … it will be between processes.” Dr. Robert Gee, National Graduate School “In order to develop a culture that consistently improves performance, you have to focus not just on the end result (solution focus) but also on how you get there (process focus).” Michael Kukhta, Master Black Belt
  • 10. PDSA Cycle: Plan, Do, Study, Act  Plan a step  Take a step  Study the outcome  What worked?  What didn’t work?  What did we learn?  Act on the difference between what you expected & what you got  Keep learning This Way: Plan Do Act Check Plan Do Re-Act Check Not this Way: Dr Edwards Demming: Lack of knowledge… that is the problem There is no substitute for knowledge Study Analyze Study Analyze
  • 11. From Dr. Joseph Juran’s teaching:  Removal of Special Cause only brings to system back to where it should have been in the first place  The important problems of improvement commence once you achieve statistical control  “There is here, the same widespread unsupported assumption that the bulk of defects are operator controllable, and that if operators would only put their backs in to it, the plant’s quality problems would shrink materially” ◦ (J. Juran, Industrial Quality Control 1966) Juran’s Trilogy: 1) Quality Planning Develop Standards, Designs Processes & Systems that enable the possibility of compliance 2) Quality Compliance Use the Processes & Systems to measure performance to Standards 3) Quality Improvement Improve Performance to standards (compliance) Improve Standards, Designs, Processes & Systems
  • 12. SCOR Model Customer’s Customer Supplier’s Supplier Supplier Internal or External Customer Internal or External Your Company Plan Make DeliverSource Make / Repair DeliverMakeSourceDeliver SourceDeliverSource Return Return Return Return Return Return Return Return Plan Plan Provides Framework for your Transformation / Improvement Projects. • Defining the boundaries / scope of the supply chain . • Evaluate the supply chain’s strengths and weaknesses. • Industry benchmarks, standardized terms, metrics, Enables a total enterprise view of a supply chain
  • 13.  The systematic elimination of waste and re-alignment of resources to deliver value to the customer faster, better, & more consistently  Lean also is: ◦ Pursuit of excellence ◦ Continuous Improvement of performance and quality ◦ . ◦ Increasing inventory “turns” and throughput ◦ Simplifying and redefining processes ◦ Measuring & monitoring processes ◦ Empowering the workforce Leading to Leading to Eliminate Waste Reduced Cycle Times Increased Capacity Focus: Eliminate waste, non-value add steps, process constraints and bottle necks that cause problems in work throughput Approach: Intuitive and broad - “inch-deep, mile wide”
  • 14. The Five Principles of “Lean Thinking” 1. Define value from the perspective of the Customer 2. Map the value stream 3. Get the stream to “flow” by eliminating waste 4. Allow the customer to “pull” value from the stream 5. Pursue perfection (continual improvement)
  • 15. MEASURE •Map/measure the process •Collect lots of data ANALYZE •Organize and analyze the data and information to Identify failure modes, problems, root causes CONTROL •Maintain, monitor and control variation •Preventively fix root causes IMPROVE •Plan, apply, deploy Improvement Tools •Correctively fix failure modes DEFINE •Identify standards, metrics, objectives, CUSTOMER PROBLEMS Define Measure AnalyzeImprove Control Results Define Measure AnalyzeImprove Control Results σ Use data-driven, measurement-based, statistical methods σ Think critically, deeply and analytically to improve performance σ Eliminate non critical business issues and concerns σ Focus: Surgical “inch-wide, mile-deep” investigation and resolution σ Approach: σ Solve problems at the system and root cause level σ Relentlessly pursue drastic reductions in variation then control and manage whatever variation is left over Applied projects following the DMAIC Model
  • 16.  In the 1980’s, Engineers and Management at Intel and Motorola - realized that variance reduction and lower defect rates were one of the keys to the success of Japanese competitors  Is “Six Sigma Quality” – 3 DPM – good enough for your process? (e.g. producing semiconductors?)  Dr. Mikel Harry researched these successes in variance reduction and formed them with others into the “Six Sigma” programs that we are familiar with today “Sigma” Quality Level 1 2 3 4 5 6 7 Cost of Poor Quality (COPQ) $’s ? % First Pass Yield (FPY) 68 95 99 99.977 99.99966 99.379 Defects/million (DPM) 690K 308K 67K 6K 230 3.4 “Sigma” Quality Level 1 2 3 4 5 6 7 Cost of Poor Quality (COPQ) $’s ? % First Pass Yield (FPY) 68 95 99 99.977 99.99966 99.379 Defects/million (DPM) 690K 308K 67K 6K 230 3.4 Accurate Precise
  • 17. Processes Processes Process Start Process Finish Process Steps Processes Processes Organization Customers End-use Customers Suppliers Sub- Suppliers Process Steps Return Return Plan Make DeliverSource Make/Repai r DeliverMakeSourceDeliver SourceDeliverSource Return Return Return Return Return Return SCOR Supply Chain Model
  • 18. Single Piece Flow Just-In-Time Eliminate Waste •Process parts one-at-a- time or in small lots instead of in large batches or economies of scale •Quick changeovers •Balanced and continuous flows instead of stop and start processing •Have just the right amount of inventory you need, when you need it, where you need it •Optimize the amount of inventory required •Ensure that your resources are ready to support the flow •Never knowingly pass on a defect •Improve the capability of your processes •Fix failure modes when they occur •Determine and resolve the deeper root causes = = The Toyota Production System Model by Michael Kukhta Reference: Senji Niwa, from the Shingijutsu Organization. Niwa-san also worked directly for Toyota’s Taiichi Ohno (TPS creator) for 18 years. “Classic Lean” Strength “Supply Chain Management” Strength “Classic Six Sigma” Strength
  • 19. Numbers, words, quantities, values stored sitting in piles or queues waiting for future use Charts, summaries, spread sheets, etc. that organize the data Presentations, plans and tools that explain and communicate the information Processes, organizations and team using the information to improve, manage, build systems and develop cultures Push the data “up” to become Wise Always loop back to check the data Wisdom Knowledge Data Information Where are you looking from? The WISDOM TOWER: Changing Perspectives
  • 20. 2) Clearly Define your problem Example: Too many mistakes in purchase request specifications are causing rework rates of 34%, high costs and late deliveries (less than 50% on time) to our customers 1) Find: •Customer Issues •Performance Reviews •Meetings •New Projects •Failures, Re-work •Projects •Continuous improvement activities •Champions •Stakeholders •Employees •SCOR Maps •Research •Brainstorm •Wait until the crisis hits you •Value Stream Maps 3) Clearly State the Initial Charter for your project (Set targets and timelines!) Example: This first phase of this project – by 3Q 2004 - will identify problems and root causes in the purchase request process, target first pass yield rates of 95%, target a 50% reduction in the Cost Of Poor Quality and increase on-time deliveries to our customers to greater than 90% 4) Link improvement targets to customer needs and organizational objectives 5) Create a Project Charter - Resources, Milestones
  • 21.  What are we Mapping? The flow or path of: ◦ People, Parts, Paper, Information, Electrons (IT, networks, computers)  What status is the Map we are making? ◦ “As Was” – a historical reference or how the process used to be ◦ “Should Be” – the way documentation says it is supposed to be or the way you think it is working ◦ “As Is” or “Current State” - an accurate reflection of how the process is actually working. You must “walk” the process on the ground at the working level to validate the “real” way ◦ “Future State” – a projection of how you would like the process to work ◦ “Utopian State” – the way the process could work if there were no restrictions or boundaries on time and resources
  • 22. Represents... Some Examples are... This Symbol…. Start / Stop * Receive Trouble Report * System Operable Decision Point Approve / Disapprov e Accept / Reject Yes / No Activity Process Step or Activity Connecto r (to another page or part of the diagram) A A B Represents direction of flow
  • 23. Enjoy! Fill kettle with water & plug in Get coffee from cupboard I’m going to have a coffee Instant or Brewed Put coffee into mug Get mug from cupboard Pour hot water into mug A Add cream & sugar Is it to taste ? Yes No InstantBrewed Process Flow Diagram: Morning Coffee Flow Chart
  • 24. High-Level Process Map  Can show the link from suppliers outside your organization to the customers you deliver your product or service to Mid-Level Process Map  Can show your organization within the larger organization you work in Detail-Level Process Map  Show s the process within your organization that you wish to investigate further Stop Start Stop Start Start Stop Stop
  • 25. Product and Services Cash/Funding Information Customer’s Customer Supplier’s Supplier SupplierSupplier CustomerCustomerYour Company PlanPlan Make DeliverSourceSource Make / Repair DeliverMakeSourceDeliver SourceDeliverDeliverSource ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn ReturnReturn PlanPlan PlanPlan
  • 26. VA/NVA Ratio= 46% DPU = ____ RTYield = _____ SCORE CARD: I’m going to have coffee Fill c. maker with water Scoop Coffee into c. maker Get & place Filter in c. maker Drink coffee Is taste OK Brew coffee Pour c. into cup Add cream & sugar Water Supply Process Shopping Process Electricity Supply Process Eating Equipment Supply Process Tasting Process Housekeeping Processes NVA = Non-value Added Time VA = Value Added Time VA Time NVA Time Temp of Water= ___ Quality of Water= ___ Pressure of Water= ___ Amount of Coffee= ___ Quality of Coffee= ___ Type of Coffee= ___ Defective Coffee= ___ 60 sec 30 sec 60 sec 360 sec 10 sec 60 sec 10 sec 10 sec 5 sec 600 sec 30 sec
  • 27. Is your error in the process or in the way you measure it? Could it be that you actually are “good” but the error in the measurement system shows that you are not “good”? Overall Variation Occurrence-to- Occurrence ( or Piece- to-Piece) Variation Measurement System Variation Repeatability: Variation due to gage or measurement tool Reproducibility: Variation due to people or operators who are measuring
  • 28. 3) Who? 4) When? 5) How Much? 6) How? 2) Where? 1) What? 6) How will you collect it? Sample Data Collection sheet Data Collection Sheet Process Name: _____________ Process Step: _____________ Location of Measurements: _____________ Measurement Tool Used: ______________ Measurement System Error: _____________ Measurement Number Value Units (e.g. inches) Time of Measurement Person who measured 1 2 3 4 5 Data Collection Sheet Create a Data Collection Plan:
  • 29. The Seven “Muda” (the Japanese word for any activity that consumes resources but adds not value; also known as “waste”) ◦ According to Taiichi Ohno’s enumeration of the types of waste commonly found in physical production of tasks and conversion of activity into services 1. Overproducing ahead of demand 2. Waiting for the next process step 3. Unnecessary transport of materials [and information] 4. Over-processing of parts due to poor tool and product design [extra and over processing documents and approvals] 5. Inventories [of parts, data, information, people, electrons, cash] more than the absolute minimum 6. Unnecessary movement of people [parts, data, information, electrons, cash], during the course of work or processing (looking for things, drawings, technical help, etc.) 7. Production of defective parts [and services]
  • 30. 8. Not Fully Utilizing your People : (The Greatest Waste of All) ◦ Under-Utilizing:  Not applying and harvesting the full capabilities of your employees  Training but not using the capabilities learned  Expecting high-performance from untrained or inadequately trained people ◦ Over utilizing and over-relying on a few employees  Over relying on a select few  High overtimeIncessantly increasing time demands  Unsteady flow and non-level loaded work- hurry-up and wait  High variation in processes – pressure and stress for people ◦ Uncertainty and conflict versus confidence and trust in the workplace ◦ How are you managing changing business and economic climate? ◦ The organizational culture is different, even within the parts of an organization: Are you thriving, striving, dormant or dying?
  • 31. Observation IndividualValue 464136312621161161 200 150 100 50 0 _ X=100.4 UCL=114.0 LCL=86.8 Observation IndividualValue 464136312621161161 200 150 100 50 0 _ X=98.7 UCL=187.5 LCL=9.8 1 Process A shows controlled variation Process B shows uncontrolled variation A B Common Causes •Consistent •Often Special Causes •Sporadic •Sudden
  • 32. Time Scale  Histogram Frequency LSL USL 2 4 6 8 10 12 14 16 18 20 y Unit of time e.g. hours, months  a bar chart for numerical categories bars need not be in descending order shape provides a form of distribution of data central tendency and variability are easily estimated specification limits can be superimposed to estimate process capability •time •distance •dimension
  • 33. A method to display the “vital few” from the “trivial many.” These charts are based on the Pareto Principle – 20% of the problems have 80% of the impact. The 20% represents the “vital few.” The Pareto chart helps you to arrange data in order of priority or importance. 90 30 20 10 5 Frequency Categories Percentage 75% 25% 50% 20 180 140 100 60 TITLE n = sample size (time period) LEGEND REFERENCE INFO date initials source 100 %
  • 34. Types of Correlation Strong Weak None Positive Negative Y=f(x) Y=f(x)Y=f(x) x x x
  • 35. Method Time Other Environment Criteria Card Face Down and On Target EFFECTCAUSES “Card Drop” Process where the desired output is to drop cards face down onto a target
  • 36. WHY DOES IT TAKE SO LONG TO MASK PART? TAPE DOES NOT STICK WHY DOES TAPE NOT STICK? PART HAS SOAP RESIDUE WHY IS THERE SOAP RESIDUE? RINSE CYCLE INADEQUATE POWER WASHER RINSE CYCLE BROKEN WHY IS POWER WASHER BROKEN? WHY IS RINSE CYCLE INADEQUATE? OLD MACHINE NOT REPLACED WHY IS OLD MACHINE NOT REPLACED CONGRESSIONAL BUDGET PROCESS IS FLAWED
  • 37. Overview of How FMEA Works Process Step or Input Potential Failure Mode Potential Failure Effects Potential Causes of Failures Current Process Controls Severity Rating (SEV) Occur- rence Rating (OCC) Indetect- ability Rating (DET) Risk Priority Number (RPN) What is the Input? What can go wrong with the Input? What is the Effec t on the Out- puts? How bad is it? What are the Causes? How often do they Occur? How can they be found or prevent- ed? How well can they be prevent -ed? Where is our greatest Risk?
  • 38. Item No. Problem/Opportunity Benefit Person(s) Responsible Due Date % Complete Comments 1 2 3 4 5 6 7 8 Kaizen Event Newspaper Team: Kaizen Event: Team/Work Group Members Wwww, Xxxx, Yyyy, Zzzz Updated:___/___/___ Display Board for _____ Team Pareto DiagramFrequency Histogram Frequency LSL USL y Control Chart UCL CENTRELINE LCL
  • 39. Seiri Seiton Seison Seiketsu Shitsuke Sort Straighten Shine Standardize Sustain ( ) Separate the necessary from the unnecessary Organize in your layout in a logical sequence Clean, fix and change your workplace Build systems and processes to support 5S activities Ensure that the standardized methods, tasks and techniques are followed
  • 40. Organize by frequency of use Set Baseline Contin- uously Improve Keep? Place in Local 5S Holding Area Place in “Last Chance” 5S Holding Area Record, Archive records Clean, Label, Tidy Fix, Map, Paint, File, Systematize, Standard Operating Procedures Audit, Monitor No Yes …improve our workplace organization and safety We want to: Allocate time & Resources Develop 5S Plans & Standards Separate /Sort Keep? Destroy, Scrap, Dispose No Yes
  • 41.  Level 1 (Workstation Achievements) ◦ Data and reports (hard & soft) are sorted into piles, sections, drawers and multiple file locations: Cluttered  Level 2 (Workstation Achievements) ◦ Data & reports are sorted into files, binders and single locations ◦ Metrics, basic labelling, some visual controls ◦ Appearance is cleaner and more organized  Level 3 (Workstation Achievements) ◦ All files, data and reports are organize and labelled ◦ Metrics, information and 5S maps are available and posted ◦ Maintenance of 5S activities, audits of 5S performance  Level 4 (Work Group Achievements) ◦ Common standards for metrics, filing, labelling, file naming ◦ Simple, clear and effective Visual Controls & Driver Measure Boards ◦ Maintenance of Work Group 5S activities, audits of 5S performance  Level 5 (Site and Business Unit (BU) Achievements) ◦ Common standards for metrics, filing, labelling, file naming ◦ Simple, clear and effective Visual Controls ◦ Maintenance of 5S activities, 5S audits Can usually find things Can find things in a reasonable amount of time Can find any file or doc. In 30 seconds Close colleagues can find any file or doc. In 30 seconds Any colleague can find any file or doc. In 30 seconds
  • 42. 1. Specify value from the standpoint of the end customer by product family. 2. Identify all the steps in the value stream for each product family, eliminating every step and every action and every practice that does not create value. 3. Make the remaining value-creating steps occur in a tight and integrated sequence so the product will flow smoothly toward the customer. 4. As flow is introduced, let customers pull value from the next upstream activity. 5. As these steps lead to greater transparency, enabling managers and teams to eliminate further waste, pursue perfection through continuous improvement.
  • 43.  Cycle Time is the actual production rate – It is the time between two successive finished items coming out of your production cell.  Cycle Time is dictated by the slowest (longest) operation in the cell. 40 min 20 min 25 min 15 min 30 min 1 54 3 2 •What operation controls the cycle? •What is the Critical Path? •How can you relieve or shift the bottleneck?
  • 44. Source: Improve Phase 26jul07  Bottleneck ◦ The point which is currently reducing the flow or slowing the entire process ◦ A managed buffer before a bottleneck is necessary ◦ A bottleneck WILL exist in every process ◦ Bottlenecks move ! ◦ High WIP can mask the bottleneck ◦ Flex to the bottleneck ◦ The people working at the bottleneck take breaks, not the bottleneck
  • 45. Pull Systems Production scheduling method used to link downstream activities to upstream activities Work begins based upon a demand signal (kanban) from a downstream customer, either internal or external Avoids overproduction, work backlog, and disconnects within a process Nothing is produced until the downstream customer signals a need
  • 46.  Takt Time ◦ Drum beat of production ◦ Based on actual internal or external demand Available production time customer demand Takt Time =
  • 47.  Kanban ◦ A signal to produce ◦ An empty square, bin, shelf, cart, or kanban card ◦ Response time should be worked out & agreed in advance ◦ Compensates for inability to pull ◦ Can extend through electronic notification to suppliers using automatic messaging and triggers
  • 48.  Setup Time ◦ Tool changes & preparation to process first piece ◦ Starts when last piece of previous job is complete; ends when first good piece of next job is complete  Internal set-up: While machine is shut-down ◦ Strive to minimize this as process is not producing parts  External set-up: While machine is working ◦ Maximize through kitting, point-0f use tools/parts and preparation
  • 49. Mistake proofing ◦ Eliminate/minimize chance for human error ◦ Poka yoke =  to avoid (yokeru) inadvertent errors (poka) ◦ Detection Poka yoke  Notifies of imminent process failure but requires operator interaction to avoid mistakes ◦ Prevention Poka Yoke  Stops the process before failures occur  Does not allow defects to pass through the process
  • 50.  Elements of Lead Time ◦ Lead Time = total process time from initiation to design to build to ship to payment ◦ Batch & Queue – Accumulate orders, then wait to be processed ◦ Setup time – prepare to process next job ◦ Run time – processing time per unit  Often less than 1% of cycle time  Only value added step of Lead time
  • 51. ◦A cell organizes equipment and operations in a process sequence for a specific output ◦This is opposite “Process centered Islands” where equipment / activities are grouped by functional operations Bottleneck Management: • Maintain buffer in front of bottleneck • (never starve the bottleneck !) • Improve bottleneck operation • Cross train on bottleneck • Creates a visual work place • Continuous Improvement • Cell technical & logistical support • Balance activities / operations • Focus on balanced, continuous pull through the cell
  • 52. •Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the remaining, value-creating steps flow. •Such a shift often requires a fundamental shift in thinking for everyone involved, as functions and departments that once served as the categories for organizing work must give way to specific products; and a "batch and queue" production mentality must get used to small lots produced in continuous flow. •“Flow" production was an even more valuable innovation of Henry Ford¹s than his better- known "mass" production model.
  • 53. Item No. Problem/Opportunity Benefit Person(s) Responsible Due Date % Complete Comments 1 2 3 4 5 6 7 8 Kaizen Event Newspaper Team: Kaizen Event: Kaizen Newspaper
  • 54. “It isn’t the changes that do you in, it’s the transitions.” (From: “Managing Transitions: Making the Most of Change” by William Bridges) Time What is your path? Who is with you? How many are with you? Ending, Losing, Letting Go The Neutral Zone The New Beginning • “Before you can begin something new, you have to end what used to be” • “Before you can learn a new way of doing things, you have to unlearn the old way isn’t the changes that do you in, it’s the transitions.” • “Change causes transition, and transition starts with an ending”