Six Sigma is an approach to eliminate defects based on data for the development of reliable processes so that they deliver the intended results. It is a way to measure quality and performance.
Six Sigma is a structured and data-driven process of solving problems and determining critical issues in the business. It's a method of measuring processes. It is not an add-on to business activities but a part of it. We can measure how many defects we have in a process.
6 Sigma = 3.4 defects per million = 99.999997% accurate
It is all about reducing variation.
Lean means continuously improving through eliminating waste and cost and shortening circle times. e.g. reduced inventory, floor space, quicker response time, decreased defects, reworks, and increased productivity.
We follow the five simple steps:
Define the value of our product - Make it according to customer needs and customer-defined;
Identify the value stream of the product - follow the product and identify the unnecessary actions;
Study the flow of your product - eliminate all waste;
Make only what the customer orders - produce just in time for demand;
Strive for perfection - Continuous improvement. Good enough is never enough.
The methods contain some basic principles:
CHALLENGE - form a long-term vision, meet challenges with courage and creativity
KAIZEN - improve your business operations continuously, always driving for innovation and revolution
GENCHI GENBUTSU (GO AND SEE) - go to the source to find the facts and make correct decisions
RESPECT - respect others, make every effort to understand each other, take responsibility and do your best to build mutual trust
TEAMWORK - stimulate personal and professional growth, share development opportunities, and maximise individual and team performance.
Toyota's way
* We are to make decisions based on a long-term philosophy and align the organisation towards a common purpose. We are to instil the importance of generating value for the customer society and the economy.
* People must continuously improve their skills.
* We are to create continuous flow and bring problems to the surface.
* We need to use the pull system to avoid overproduction to provide the customer with what they want when they want it and the amount they want.
* We are to minimise the inventory and frequently restock.
* We need the culture to stop to fix problems and get the quality right the first time. We are to have the capacity to see the problems and all employees the authority to stop the process to signal quality issues. It is ok to stop and slow down to get the quality right.
* Tasks are to be standardised for continuous improvement. Although it may have a bureaucratic system, it allows for continuous improvement from the people affected.
* We are to use visual controls so that the issues are not hidden.
* Include the principles of the 5S program and make all spaces efficient and help people to share workstations, sort out unneeded items, have a plan for everything, keep the areas clean and create rules and SOPs.
* We are only to use reliable and tested technology to help the people and processes. Technology is there to support people and not to replace them. New technology is often unreliable and difficult to standardise. We are to conduct tests before adopting new technologies, rejecting or modifying technologies that conflict with our culture, and disrupt stability, reliability and predictability.
* We are to grow the leaders to understand and teach the work to others. Employees must be educated and trained and maintain a learning organisation. A good leader must understand the daily work in great detail before teaching others. Success is based on the team and not the individual.
* We are to extend the network of partners and suppliers by challenging them and helping them improve. We are to have respect for the partners and treat them as an extension of your business. They are to be challenged to develop and grow.
* We need to go and see for ourselves to understand the situation. We are to make decisions through consensus and slowly. We are to consider all options and then implement decisions rapidly.
* We are to determine the root cause, consider a broad range of alternatives and use efficient communication tools. We do not pick one direction and go with one path, but we are to move quickly through it when we have picked the way.
* We are to become a learning organisation through continuous improvement. We are to clarify the problem and investigate the root cause, countermeasure, evaluate and standardise.
* Once we have established a stable process, we use continuous improvement tools to determine the root cause of inefficiencies and apply effective countermeasures.
TPS House
The TPS house is strong in structure. It starts with the best quality, lowest cost and shortest lead time - the roof. Two main pillars are holding it together - JIT (Just-in-time) and Jidoka. They never let defects pass to the next station.
Jidoka means that employees stop the line and try to solve a defect themselves when they spot a defect. If they can't then they will call their supervisor. If there is no solution to the problem, we will not be able to continue with the manufacturing. All manufacturing lines have problems and TPS wants them to surface to solve them. Changing the mentality is the key.
Kaizen means continuous improvement. It aims to eliminate waste through standardised activity. It has several stages:
Identify an opportunity;
Analyse the process;
Develop the optimal solution;
Implement the solution;
Study the results;
Standardise the solution;
Plan for the future.
* We are to replace conventional fixed ideas with fresh ones and start by questioning current practices or standards.
* We are to seek advice from as many associates s possible.
* We are to think about how to do something and not why it cannot be done.
* We cannot make excuses and make the execution happen.
* We are not to seek perfection and implement the solution right away, even if it only solves 50% of the target.
* We are to correct something right away if a mistake happens.
The foundation of the TPS house is the Heijunka which means eliminating waste. The principle is to produce adequate goods at a steady rate and allow further processing to be carried out at a stable and predictable rate. This will prevent spikes in production and eliminate inventory to a minimum.
Because customer demands fluctuate, we have two types of levelling: demand levelling and production levelling.
The five principles of lean business
Value
The value of the product can only be realised from the customer's point of view and we need to figure out the 'voice of the customer". This can be done by recognising what are we failing short of in determining the customer needs and what are the new needs of the customer. We need to be ready to adapt to trends and find out whether we are falling behind the competition. We also need to listen to the 'internal voice' for defects and delays and listen to the employee's concerns.
The first step in removing non-value activities from a process is to map the process and walk the full path yourself. We may need to calculate the time and distance travelled.
When the customer placed an order then the process is triggered by obtaining raw materials from suppliers immediately, and workers immediately fill the order with components, it flows immediately to the plant where workers assemble the product and the order flows immediately to the customer.
Every customer has a unique preference and a product has a different value to a different customer. We need to characterise the product into 3 classes:
Must-be attributes - basic musts and functions;
Performance attributes - relative to quality and customer willingness to pay;
Surprise and delight factors - their presence increases satisfaction and their absence does not decrease it.
We can identify the satisfies of the product, including surveys, questionnaires or customer forums. We can also recognise the 'delighters' through field research, marketing vision, industrial design, site logs and call centre data.
From the input gathered we can brainstorm the features and functionality of the product that we want to improve.
Waste
Waste does not give anything to the product and customers would not pay for it if it was given a choice. All waste has a cost that is a loss to the company. Waste does not give value to the product through unnecessary motions, waiting for work or materials, overproduction, transportation, inventories, rework and scrap.
Waste is also the uneven and unbalanced work on machines for example when employees rush all morning to stand around in the evening and do nothing.
Waste is also putting excessive demand on equipment, facilities and people through waste. Overburdening people causes safety and quality problems, breakdowns and defects.
There are also wastes of untapped human potential, inappropriate systems, energy and water, materials, customer time, defective customers and unused creativity.
Variation
Variation is the deviation of expectation. The size, trends, nature, causes, effects and control is the variation in Six Sigma. Defining the variability over time helps to understand how the system is working and allows us to predict how it will work in the future.
Statistics is the key to technology as a catalyst for economic development.
When variation is produced in the system it is called common cause variation. We can act to reduce the common causes. There are also special causes caused directly by something special.
Sometimes we a trying to improve a process when it does not need an adjustment. If the measured outcome does not meet the target. It is called the response to a false alarm when we think that the process has shifted when it hasn't.
Complexity
A product or service that is complex adds more non-value, higher costs and more work than slow processes. The complexity is more expensive.
There are two contributors to complexity:
Differentiation - it occurs when we try to develop a variety of offerings, features and attributes.
Back-operational work - many engineering specifications that need to come together to make a product.
Those create strategic risks when faced with a less complex competitor.
Complexity reduction is central to Six Sigma and Lean Thinking. We can use:
* Standardisation. Standardisation of internal tasks and components so fewer number of them can be assembled into many different products.
* Optimisation. Eliminating offerings that generate a loss, especially with a declining market and products that do not generate profits.
Continuous Improvement
In the world of lean, good enough is never good enough. We have to challenge ourselves every day to see whether we are making progress and achieving our goals. We also need to remember that no process can ever be perfect and operations must be improved continually. We must also always go to the source to evaluate and make the right decisions, create consensus and attain the best possible speed.
Pull
Push is a traditional manufacturing philosophy where we produce based on the estimated forecast of demand. The opposite is Pull Production, where the customer demand triggers the part being pulled from the upstream, resulting in continuous flow. This reduces the cycle time, and inventory and improves the customer service level.
PDSA Circle ( Plan, Do, Study, Act)
the PDSA is a way to test our improvements on a small scale before implementing them across the board. We:
Plan the change. Establish the objectives and processes necessary to drive results. We set the expected outcome.
Implement the change on a small scale and a small group of people to test the change.
Study the results. Measure the new process and compare the results against the expected results.
Act on what was learned. Analyse the differences to determine their cause and determine whether to apply changes that will include the improvement.
DMAIC Method
*We define, identify and state the practical problem.
*We then establish who wants the project and why.
*We define the scope of the project for improvement.
*We define the key members and resources for the projects. We define the critical milestones and allocate budgets.
*We measure the performance by collecting and validating the data and preparing the data collection plan.
*We need to know how many data points we need to collect, what are the sampling methods, and who will collect the data.
*We then analyse the data and finally, establish how well the processes work against the targets.
* We define the statistics goals and statistical solutions.
* We may not focus on symptoms but find the root cause and present the solutions to the process owner.
*We run a Pilot test and analyse its results, present a final recommendation then change the policy and procedure.
The improvement toolkit
There are some basic methods for Six Sigma implementation.
Gemba
Gemba is Japanese for 'actual place'. The idea is that when a problem occurs, the engineers must go to the Gemba, the source and root and understand the full impact of the problem.
There are five rules of Gemba management:
When the problem arises, go to the source and do not try to make the diagnosis on the phone!
Check the relevant objects because 'seeing is believing;
Take temporary countermeasures to resolve the problem;
Find the root cause of the problem;
Standardise procedure to avoid reoccurrence.
Genchi Genbutsu
Genchi Genbutsu means 'go and see for yourself'. This means that any information about the process will be simplified and abstracted from its context when reported. By observing the actual process the problem solver can obtain the actual data or facts which will improve the chance of a better solution. We do not make decisions from a desk!
Womack's Principle
The five-step thought process for guiding the implementation of Lean techniques are:
Specify the value from the customer's standpoint for each product family;
Identify the steps in the value stream for each product family, eliminating those steps that do not create value;
Make the value-creating steps occur in a tight sequence so that the product will flow smoothly to the customer;
Let the customer pull value from the next value activity;
As the value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced we begin the process again until perfection with no waste.
Kaizen
The process of becoming a Kaizen learning organisation involves criticising every aspect of what we do. The general problem-solving technique includes:
Identify problem perception;
Clarify the problem;
Locate the area or point of cause;
Investigate root cause (5Whys);
Countermeasure;
Evaluate;
Standardise.
A Roadmap for Implementation
A Sig Sigma initiative begins with the deployment program from the top down. Individuals must go through the required training. The Six Sigma initiative starts with the major steps:
Establish goals and install infrastructure;
Deploy the initiative by assigning, training and equipping the staff;
Implement projects and improve performance;
Expand the scope of the initiative to include additional organisational units;
Sustain the initiative, through re-alignment, re-training and re-evolution.
When the organisation is ready and trained, there is time for the project.
A Sig Sigma project should have:
Financial impact or significant strategic value
Produce results that exceed the amount of effort required to obtain the improvement
Require analysis to uncover the root cause of the problem
Solve a problem that is not easily or quickly solvable using traditional methods
Improve performance by greater than 70% over existing performance level
The focus of the project should be on business success, costs, employee or customer satisfaction, process capability, and output capacity. cycle time and revenue potential.
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