Lean Six

Sigma

Lean Six Sigma

DMAIC Approach

Copyright 2005, AIT Group Inc. All rights reserved. 1

 Lean Six
High Level DMAIC Approach Sigma

Define Measure Analyze Improve Control

• When did it happen?
• Where did it happen?
• What is the success criteria?
Preliminary
Data Analysis
• Where in the process do
we need to scope efforts?
• What is the target value?
• What are the specs?
SIPOC
• How much waste is in
this process?
• What is our value
added percentage?
Value Stream
Mapping
• How will we address
• What does the DOE Org. issues?
• How often does this happen? • What is the sub-
process plan look like? • How will we address
• What trends have we grouping strategy?
•What responses are we Behavioral issues?
observed relative to the target?
interested in (Average,
Range)?
NEM • Is the • What variables do we
Advanced Classification
Baseline measurement want to optimize? Why?
NEM Of Control
(IMR) process capable?
(XbarR) Issues
• Is the test a
• Is the process destructive test? • What variables do
• What variables are DOE Planning
capable? we need to control?
contributing to mean Template
• Do we want to Measurement shifts?
reduce variation? System • What control
• What variables are
• Do we want to Analysis • What observations methods will be used
contributing to
shift the mean? did we have during the to ensure gains are
variation?
experiment? sustained?
Process Components • What roles need to
Capability Of Variation be established to run Control
/ ANOVA the DOE? Methods
• What changes have been
made to the process? • What is causing failure? DOE •Who is responsible
• What possible variables • What is the impact of Execution for implementing the
relate to the change ? failure? control?
• How do we mitigate the risk • What variables are
Process of failure? critical to the process? •Who is accountable
Mapping • How should the for the process
critical variables be results?
FMEA set?
• What does the process
look like? Operator & Control
• What does the process Product DOE Analysis Plan
look like from the Activity Analysis & Results
product’s view?

Copyright 2005, AIT Group Inc. All rights reserved. 2

Funnel-Down Many Variables to the Critical Few! VELOCITY Lean Six
VARIATION
OPPORTUNITY
OPPORTUNITY
(Reduce Waste) Sigma
(Reduce Variation)
Thought Map

x x x xxx x xx x x x x Value Stream

TMAP
Define x x x x
x x x x x x xx x x x x x
Mapping
SIPOC
Product Families

x’s
Detailed Process Map
x x
x x x x
PMAP
x x Product Flow

ny
x xx x x x x x
Analysis
Failure Modes Analysis

Ma
Measure x Employee Activity FMEA
Analysis
Measurement System
Set-up MSE

x x x x x Reduction
Numerical Evaluation

Analyze x xx x x of Metrics (NEM)

X’s
T-Test, Chi Square,
Material ANOVA, COV
x xx

w
Replenishment
Design of Experiments
xx
Fe
Improvement DOE
Considerations
Improve Regression Analysis
Workplace Design

5S Implementation
xx Control Strategies
Control x x Standard Work
Mistake Proofing
Performance
Metrics
Y=f(x)

Copyright 2005, AIT Group Inc. All rights reserved. 3

 Lean Six
Define Measure Analyze Sigma
Project Charter
Numerical Evaluation Measurement System Hypothesis
of Metrics How is the
Evaluation Testing
What
process
Gage name:
Date of study:

variables
Gage R&R (ANOVA) for Labor Cost/T Reported by:
Tolerance:

performing
Misc:

Components of Variation By Sample

100
%Contri bution
%Study Var
500

are
today? Chi-
400

Percent
50

causing
300
Gender

Square
200
0
Gage R&R Repeat Reprod Part-to-Part Sample 1 2 3 4 5

50
R Chart by Administrato
1 2 3
UCL=43.76
500
By Administrato
variation?

Sample Range
40

30 400

20
R=17 300

Thought Map
10

ANOVA
0 LCL=0 200

T-Test
0 Administ rato 1 2 3

Project Justification
Xbar Chart by Administrato Administrato*Sample Interaction
1 2 3 500
Administrato
500 One-way ANOVA:
1 Total No E rrors versus Hiring Location (Site)

Sample Mean
2
Weekly vs. Quarterly Grant Date Source DF SS MS F P

Av erage
400 400 3 Hiring Loc 3 2.12 0.71 0.31 0.821
UCL=365.8 1/1/02 – 12/31/03 Error 117 269.95 2.31
Mean=348.4
LCL=331.1 Total 120 272.07
Two-Sample T-Test and CI : Weekly , Quarterly
300 300
Problem Resolution 6σ Project Phases W eekly
N
105
Mean
55.41
StDev
8.63
SE Mean
0.84
S = 1.519 R -Sq = 0.78% R-Sq(adj) = 0.00%

Production Market Methodology

200 200 Quarterly 8 55.50 8.21 2.9 Boxplot of Total No Errors by Hiring Location (Site)

Product Line Sales $ (YTD) Gross Margins 0 Sample 1 2 3 4 5 Estimate for difference: -0.089083
10

Volumes Comments 95% CI for difference: (-7.056468, 6.878301)

T-Test of difference = 0 (vs not =): T-Value = -0.03 P-Value = 0.977 DF = 8
8
Hiring location is
not a significant
contributing factor

Data
High vol -Growing Establish Project Scope

Total No Errors
6 to error s!
Brackets $ 70.3 Million $ 2.8 M / 39% 80 Million X W = 55.41 X Q = 55.50

Cylindrical Define Conc lusions:

4

There is no significant difference 2

High vol. Growing Baseline Process σˆ = 5.63 σˆ between weekly and quarterly
Wheels $ 60 Million $ 2.3 M / 38% 94 Million
W
Q = 8.21
0

Integrity
grant dates.

Autom.
Field Sales TO TO - RML
Hiring Location (Site)

Large Diameter
Closures $ 31.1 Million $ 1 M / 33% 15 Million Characterize Processes
Old Equip. Measure
Shafts $ 21.5 Million $ 1 M / 40% 5.4 Million
Hydraulic
?
What is
ID Process
Small batches Failure Modes
High Labour
Separated Operations $ 1.7 Million $ 0.3 M / 19% 1.3 Million
Old equip.

$
Evaluate

Seals $ 5 Million $ 0.7 M / 7% 4.5 Million Automotive

Analyze Measurement Systems

ID Critical Variables
my
Other Products $ 4 Million $ 0.3 M / 17% 9.3 Million

Improve Implement
project
strategy?
Process Improvements

Control Control/Maintain

Failure Modes &

Process Improvements

SIPOC Process Map

Process Name: Copper Tolling
Business
Effects Analysis
Failure Modes and Effects Analysis:
Process Owner: Eric Sandford Product P ortfolio
Plan Plan
Suppliers Inputs Process Outputs Customers Quote
(Providers of the (Resources required by (Top level des cription of the activity) (Deliverables from the (Stakeholders who place the requirements Part/process Failure Failure Effects S Causes O Controls D R Actions
Identify Determine Customer Business Proceed
required res ources ) the process ) proces s ) on the outputs)
Product Business
Yes Yes
With
(What is the Mode (How does the failure E (What is the root C (What controls E P (What actions are
Requirements Requirements
Portfolio Plans Opportunities Directed? Pursued? Sourcing function of each (Describe what affect the function of V cause reason for C are currently in T N being done to
No Quote
Copper Manager Orders quantity Quantity per merchant. Requirements Copper delivered Cathode delivered N Vehicle Volume N! Custom er D irected Busine ss C Profit M argin Letter to step?) could go the step?) the failure?) place to catch eliminate the cause?)
received from
from Delphi plants Delivered/Timing
Delphi Plants
to suppliers for on time, quantity, Fabrication Suppliers N Vehicle Timing S CI0 (Budge t, Resources)
No No C Costs to Do Ford
wrong.) or prevent this
to merchant transformation N Content S PI (Budget, Resources)
right brand, and quality
N Ford Goals & Objectives N! ‘In You r Head’ failure?)
N Personalitie s/Relationship s S Opportunity Screener (Budget, Resourc es)

Critical X’s
No Quote
C Customer Strategy/Portfolio Price, Quantity or Need to study dispute
C Doesn’t F it Divisio nal
C Divisional Strate gies
S Divisiona l Processes
Product Strate gy Customer disputes Work-scope does issues for reduction in
Delphi accounting Index used, timing & Accuracy C Doesn’t F it Pursuit
purchasing quantity's delivered &
N Divisio nal Inte lligence Execute Plan Invoice is invoice delaying not agree with Pricing 8 disputes, Focus on
S Divisiona l Quoting Philosophy Apply
reported. Business No Yes Divisional C Poor Busine ss Ca se Issue Invoice incorrect payment (40 days) 5 quote 4 database 4 0 Price
Copper Tolling Lessons
Pursued? Strategic
Delphi Plants Forecast from D Plants Level & Stable
Learned Mis- Strengthen ATL
Analysis
PC&L (Customer) C Budget Disconne cts
Customer has Delay in payment communication communication with

VOC
C Resourc e Disconnects N! Relationships
Shared Information
C Poor Docum entation N! Strategic Im portance
Forecast Leve l Knowledge Base Review and dispute with due to invoice between ATL and 7 Billing by incentivised
N ROLR (Right of Last Refusal)
C Red Flags Strategy Leve raged Sy nergies confirm invoices invoice dispute (40 days) 5 Billing 3 None 5 5 roles
C Strengths Note: Not part of
Continuous strategic analysis
Improve ment
C Divisional Prod uct S trategy Heavy workload
Merchants Global sourcing Selection of merchants C Pursuit Plan for selling process
supply quotes quotes based on Dispute Slow response Delay in payment creating
resolution & re- by business due to dispute (40 conflicting 7 Reduce disputes to
Delphi legal risk Bailment contract Risk protection Info Identify
management (t.o), Shared Yes Relationship issue unit days) 5 priorities 3 None 5 5 alleviate workload
When
purchasing Between Broker -or-Share
fabricated
product is Divisions? Knowledge Lack of funds Limited budget Work with Customer to
Buyer and receipt Dacor invoices, plant Accurate Payment to fabrication Approve budgeted for Delay in payment allocation for Accounts 6 increase budget

How do
paid Unified Front to Custom er
clerk receipts, fabrication supplier Per terms correct C T ech S how s
buyer P.O. 's +
Strategic Analysis for S ellin g (compariso n & synergies applied) C Custom er Contact Calls payment payment process (30 days) 4 weekly payments 3 payable policy 5 0 allocation for payments
amount Divisional Intelligence & L essons Learn ed (com parison & sy nergies applied)
No C Influe nce Peddling
Philosophy of Quoting Techniques (comparis on & sy nergies applied)
Delphi cost Delphi inventory records Inventory Reconciliation Inventory accounting Key: C! Divisional S trategic Analysis

accounting and costs Accurate quantity's Delphi Complete Actions for improvement and next focus area identified
! - Critical

we
Supplier cost and value Fabrication Suppliers Delphi Selling
accounting +
N - Noise Strategy • ATL’s compensation will be dependent on customer satisfaction scores to provide incentive for improved communication

What is
P.O. price entry P.O. price and market Accurate Payment to merchant C Linked Divisional Strategic Analysis
Platts index, quantity S - Standard Operating Procedure C! Unlinke d Divisional Strat egic Analysis • Measure occurrences of no payment due to lack of funds, communicate to customer with disciplinary action of shipment hold

What does
Per terms correct Merchants
=
C - Controllable

mitigate
amount
All-In Costs • Need to further study source of disputes to resolve disputes

the the process

project process risk?
scope? look like?
Process Flow & Employee
Value Stream Map Activity Analysis
Product Families
AREA NAME: BEFORE - Car rier Asse mbly - Ball Bearings PREPARED BY:
SUPERVIS OR: DATE:

Where
NOTE: Depict rough scale o f equip ment layout; a nd, dra w a point to poi nt diagr am of t he com plete pr oduct flow

PC & L
4 week rolling foreca st 40 The Seven Wastes
should
Customer
Customer/
Weekly Order
6 week rolling foreca st Weekly Orde r Distributor
35
Supplier
Daily Ship Schedule
OVEN 33
Demand/week:

D - Defective Production
we
Part A = 500
50
Weekly Build Schedule Part B = 1200
120 31
Part C = 700
70
Bench
Tool O - Over Production
focus? Press
21
19
23
39
Box 26
14
22 8
2 4 9
24 Trash
6 10
T - Transportation
13 3018 12 16 20
44 34 38
2x/
2x/
week day

42 32

Vice
28
41
Part 15 W - Waiting
Box17
Anneal Pickle Straightening Point/Chamfe r Shipping
Draw
36
I
60 coils

Takt = 240 min

Where is
Takt = 240 min
6 coils

Takt = 19 min
20 coils

Takt = 20 sec Takt = 20 sec

I
3000 pcs
37 27
29 25 3 1
11
5
43
7 I - Inventory
M - Motion
the
C.T. = 200 mi n C.T. = 200 mi n C.T. = 20.4 sec C.T. = 10 sec
C.T. = 15 min
D.T. = 0.5% D.T. = 1% D.T. = 3.1% D.T. = 1%
D.T. = 4%

Parts Rack
FTQ = 100% FTQ = 100% FTQ = 99% FTQ = 99% FTQ = 100%
C/O Time = 1 5 min

P - Processing
C/O Time = 3 0 m C/O Ti me= 10 min C/O Time = 3 0 min C/O Ti me =1 hr

waste
Lot Size = Lot Size = Lot Size = Lot Size = Lot Size =

# of Shifts = 2 # of Shifts = 2 # of Shifts = 2 # of Shifts = 2 # of Shifts = 2

WIP = 3 coils WIP = 4 coils WIP = 18 coils WIP = 1500 pcs WIP = 100 pc

occurrin
Copyright 2005, AIT Group Inc. All rights reserved. Copyright 2005, AIT Group Inc. All rights reserved.4
g?
 Lean Six
Improve Control Sigma
Control Strategies
Design of Experiments Type of Control
(Fix, M inimize, Standardize,
Measure & Monitor,
Communicate , Audit) Detailed Description of Cont rol
Facility Affected (Gas,
Electric, Wate r)
Setting or Tolerance
Prior to Cont rols
Control Set Point or
Range

All computers with screen

Management Requirements or
Organization al C hange s

Comm unicated at DRL meeting, part of

Date Implemented or
Projected to be
Implemented
Responsible
Individual

Jacovides, Director
Fix , Communicate, Audit Install or en able screen savers on all computers Electric Random im plementation savers securit y audit April, 2002 Steve, Security

Design of Experiments: ANOVA: Standardize, Audit

Establish a F acilities Coordinator to be responsible f or DRL
facilities needs Gas, Electric, Wat er No indiv idual responsible
Personal Business Plan and
Six Month Reviews Change in job de scription, PBP's May, 2002 John Biaf ora

Price Variance = f(OTD, Sp Price, LT, Profile)

Pareto Chart of the Standardized Effects

Factor Type Levels Values Reduce wat er flow through SEM by replum bing and John Biafora, Chri s
(response is Var, Alpha = .10) Customer Profile fixed 2 Tier 1 Tier 2 Fix, Measure installing chiller Water 5 gal/ min, continuous 0 gal /min Authorize chiller rep air June, 2002 Thrush

Special Price fixed 2 N Y John Biafora, Chri s

OTD Lead Time fixed 2 Post LT Prior LT Fix, Measure Reduce wat er flow through v acuum chamber Water 2 gal/min, continuous 1 gal/min, as needed Authorize replumb June, 2002 Thrush

On-Time Delivery fixed 2 N Y

Temperature control, now
flow only when using Authoriz e purchase of temperature John Biafora, Tom
Fix, Measure, Communicate Thermostat control of outgoing water on MTS unit Water 2.4 gal/min, continuous instrument sensor June, 2002 Ellis

Sp Pric e
2.5 gal/mi n, unit on only Authorize replumb, communicat e need John Biafora,
Fix, Measure Reduce flow through Hall Ef fect system Water 4 gal/min, continuous when doing measurem ent s to have flow only during usage June, 2002 Joseph Heremans

LT
Source DF SS MS F P
Customer Profile 1 473 473 0.04 0.845 John Biaf ora,
Fix, Measure Reduce flow through e-beam ev aporator Water 8 gal/min, continuous 6 gal/min Authorize replumb June, 2002 Chris Thrush
Special Price 1 40905 40905 3.45 0.090

Regression
Profile
Lead Time 1 13053 13053 1.10 0.316 3 gal/mi n, flow only during John Biaf ora,
Main Effects Plot (data means) for Var Fix, Measure Reduce flow through environmental test cham ber Water 4 gal/min, continuous testing Authorize replumb June, 2002 Tom Ellis

0.0 0.5 1.0 1.5 2.0 2.5

On-Time Delivery 1 75488 75488 6.37 0.028 94 k ft^3/min 36% of total John Biafora, all lab

Error 11 130267 11842 Fix, Measure, Communicate Manual operation of exhaust hoods Gas, Electric 94 k ft^3/min continuous time Placard June-July, 2002 users

Tie
r1
Tie
r2
N Y Pri
or
LT
Po
st
LT
N Y Total 15 260186 Fix, Measure, Communicate Adjust pre temperature air box per season Gas, Electric
Random excursions in
temperature 65 - 72 F Authorize facilities study June-July, 2002
John Biaf ora, Fred
Scott

Turn of f specific exhaust John Biafora and

170
and return air systems that Jones Lange and
do not jeopardize safet y Lab Director authorize and LaSalle

Special Pricing and On-Time

Fix, Standardize, Communicate Turn off unused equipment at 7:00 PM Gas, Electric, Wat er None requirements comm unicate at group meet ing May, 2002 representative
140
John Biafora and
Var

Shutdown specif ic exhaust Jones Lange and

110
Delivery are Significant Sources of Standardize, Monitor, Measure
Program controls of specif ic exhaust and return air units that
can be s hutdown from 6:00 p.m. to 6:00 a.m . Mon. - Fri. Gas, Electric None
and return air units from
6:00 p.m. to 6:00 a.m . Lab Director autho rize June-July, 2002
LaSalle
representative

Price Variation in the Co-Op System

80
Fix , Standardize, Audit, Measure & Curtail all no n-essential po wer usage during peak electrical Call f rom Detroit Edison to Lab Director authorize and
Monitor draw from the grid. Credit from electric supplier. Electric None implement power curtailment comm unicate at group meet ing July-August, 2002 John Biaf ora
50
Profile Sp Price LT OTD

How do
we sustain
How do the gains?
we
optimize
critical Standard Work
inputs? Standard Job Sheet
Part N umber Part D escri pti on Part F amil y Dat e: Revisi on:

Cell or Process
2400172-1 Impell ar Casti ngs B

Design/To-Be Work Flow 15s 200s 350s 62s 401s

Oper ator

245s
Oper ator 1
Oper ator 2 3

190s 25s 33s 161s 191s

Quality Standard Wor k Number of

Safet y Takt T ime Lead Ti me
Chec k in Proc ess Operators
600s 3

Measure & Monitor

Liner Web Break Downtime (min) by Month
98 99
Individual Value

What
1000

does the
Material Replenishment
500
1 3.0SL=253.4

future Subgroup
0
0 10 20
X=167.4
-3.0SL=81.44

work flow Month

600
10/98
99
Moving Range

look like? 500

400
300
200 3.0SL=105.6
100 R=32.33
0 -3.0SL=0.00E+00

Have we
met our
goals?

Copyright 2005, AIT Group Inc. All rights reserved.

Copyright 2005, AIT Group Inc. All rights reserved. 5
 Author Lean Six
Sigma

Steven Bonacorsi is a Senior Master Black Belt instructor and

coach. He has trained hundreds of Master Black Belts, Black Belts,
Green Belts, and Project Sponsors and Executive Leaders in Lean
Six Sigma DMAIC and Design for Lean Six Sigma process
improvement methodologies. Steven is a board member for the
Boston Chapter of the Industry of Industrial Engineers.
Full Bio: http://www.linkedin.com/in/stevenbonacorsi

Lean Six Sigma White Belt Certification:

• Add Lean Six Sigma White Belt (Basic Awareness) Training and Certification to
your Resume or Job Skills.
• Learn topics from one of the original Master Black Belts and world experts on
Value Stream Mapping, 5s, Process Capability, Deployment Planning, Roles and
Responsibilities, FMEA Risk Analysis, Control Plans and more.
• Certificates will be signed for all who complete the 2 hour training session.

Copyright 2005, AIT Group Inc. All rights reserved. 6

Learn More about The AIT Group Lean Six
http://www.theaitgroup.com Sigma

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 Lean Six
Who is AIT? Sigma
• AIT is a premier provider of Lean, Six Sigma and The AIT Group is an international
Supply Chain solutions. consulting firm that has been
specifically designed to help
• Solutions are customized to the customer – not
companies increase profitability by
one size fits all.
improving overall business
• The company was started in 1998 by three performance and customer satisfaction
individual that recognized extremely early in the through the integrated application of:
industry how well Lean, Six Sigma and Supply
Chain disciplines integrate.
• Our goal is the complete transfer of knowledge
via client specific solutions – not training.
Lean Supply
• Your instructors from AIT are Certified Master
Chain
Black Belts and Lean Experts.
Mgmt.
• We have worked with many different clients and Value
some of the largest companies in the world. $
• We have Offices in the US, Europe, Mexico and
China.
Six Sigma

www.theAITgroup.com

The AIT Group excels in implementation … not recommendation!

Copyright 2005, AIT Group Inc. All rights reserved. 8