Lean Processes

LEAN SIX SIGMA BUSINESS PROCESS/APPROACH

PROCESS/APPROACH The key principles of Lean Six Sigma Business Transformation are:
  1.    Focus on the customer
  2.    Identify and understand how the work gets done (the value stream)
  3.    Manage, improve and smooth the process flow
  4.    Remove Non-Value-Added steps and waste
  5.    Manage by fact and reduce variation
  6.    Involve and equip the people in the process
  7.    Undertake improvement activity in a systematic way.

Design for Six Sigma (DFSS) is a business-process management method related to traditional Six Sigma. It is used in many industries, like finance, marketing, basic engineering, process industries, waste management, and electronics.

Example Application: Elimination of Waste in Healthcare
Lean helps generate savings by decreasing waste, decreasing medical errors and refining quality. It can also help in improving patient report conclusions and recognizing, preventing, and managing prolonged disease.

The three types of waste in health care—administrative, operational, and clinical. Both administrative and operational waste are constituents of inefficient production. Clinical waste is a type of allocative waste.
  •    Administrative waste is the excess administrative overhead.
  •    Operational waste denotes to other aspects of inefficient production processes.
  •    Clinical waste is waste created by the production of low-value outcomes.

Lean Six Sigma Approach to Managing Projects (DMEDI)
The five phases for managing projects include:
  •    Define the project purpose, establish goals, structure and identify the value for the customer and company
  •    Measure throughout the process and project completion by determining how you will quantify success
       Explore new ways to accomplish completion of the project to continually improve the process
  •    Develop a comprehensive plan, including personnel and financial resource needs, to organize and implement the project as identified in the define phase
  •    Implement the project plan for completion
A variety of management tools and techniques are used within the DMEDI overall guiding framework and continuous improvement approach.

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There are many views of what constitutes Lean and related processes.  These views vary from a lengthy, statistics based, efficiency improvement process to a method for quickly identifying and eliminating unnecessary features/actions to reduce the “bottom line”.  Various descriptions and opinions abound. A number of bodies offer advice on Lean and related method.

Lean enables organizations to optimize across the value stream for value delivery, improving speed, quality, and organizational health. The Lean method is a philosophy centered around eliminating waste and providing the best customer experience. According to the Lean method, there are eight kinds of waste that can occur at the work site and in the office:
  1.     Defects
  2.     Overproduction
  3.     Waiting
  4.     Non-Utilized Talent
  5.     Transportation
  6.     Inventory
  7.     Motion
  8.     Extra Processing. 
Linking Lean and Six Sigma
Six Sigma is a data-driven problem-solving methodology. The focus is on process variations and emphasis is given to customer satisfaction. The goal of Six Sigma is to make a process effective with - 99.99996 % defect free. This means a six sigma process produces in 3.4 defects per million opportunities or less as a result. Problem-solving in Six Sigma is conducted using the DMAIC framework. There are five stages in this framework. DMAIC is the more well-known and most-used Lean Six Sigma project methodology and is focused on improving an existing process,
   D     Define the problem with the product or process.
   M    Measure the current process and collect data.
   A     Analyze the data to find the root causes of defects.  
    I     Improve the process based upon the data analysis and test it.
   C     Control new process and monitor for defects.

For creating a new product or process, the DMADV steps are used:
   D      Define process and design goals
   M     Measure critical-to-quality aspects of the proposed new process/product, including risks and production capabilities
   A     Analyze to develop process designs and evaluate to select the best design for the new process
   D     Design process details and optimize your design. Test your design(s)
   V     Verify the chosen design for your process with pilot-testing. Implement and monitor the new process

Lean Production
Lean manufacturers arrange production in closely located ‘cells’ so that work flows continuously, with each step adding more value to the product. The standard time for all activities is known and the objective is to totally eliminate all stoppages in the entire production process. However, only optimum stocks of material are kept as buffers between processing stages.

For this system to be effective, every machine and worker must be completely capable of producing repeatable perfect quality output at the exact time required. Workers are responsible for checking quality as the product is assembled, and in some instances given authority to stop production if defects arise. In this way, quality problems are exposed and rectified as soon as they occur.

The workforce is kept informed of progress towards their production and cost targets by use of information displays so that everyone is able to see the status of all operations at all times. Work teams in lean manufacturing are highly trained and multi-skilled, and many of the traditional supervisory and managerial functions have been devolved to them.

Lean manufacturing is based on the elimination of waste, including time lost waiting for missed/delayed supplies, unnecessary storage and the value tied-up in large stocks of parts waiting for assembly. ‘Just in time’ (JIT) delivery is therefore a vital element, and to deliver this lean manufacturers have had to develop their network of suppliers. Significant efforts are applied to encourage them to adopt the same lean manufacturing principles and systems, often company-wide, rather than solely related to that part of the suppliers’ operations that affect the manufacturer.

Lean manufacturers are moving away from traditional relationships with their suppliers to partnering arrangements with a smaller number based on good communications and open-book accounting. These relationships work by both parties sharing philosophies of continuous improvement (especially in the area of defect reduction, cost and timeliness of delivery) and sharing business and development strategies sufficient for both parties to know enough about each other to make forward planning effective.

Lean Construction
The Lean principles are applied in construction by focusing on improving the whole process. This means all parties have to be committed, involved, and work to overcome obstacles that may arise from traditional contractual arrangements.
   Design
  •    Use of visualisation techniques such as Virtual Reality and 3D CAD to fully define the product requirements from the customer’s perspective.
  •    Value Management to achieve more understanding and focus on client value.
  •    Use of integrated design and build arrangements (including partnering) to encourage close cooperation between designers, constructors and specialist suppliers.
  •    Design for Standardisation and Pre-assembly - both of components and processes to achieve higher quality and cost and time savings.     
   Procurement
  •    Supply chain management and rationalisation of the supply chain to integrate all parties who contribute to the overall customer value into a seamless integrated process.
  •    Transparency of costs - the elimination of waste in both processes and activities requires a clear and complete understanding of costs to ensure decisions on customer value can be taken. Confidentiality of cost and cash flows must be addressed.
  •   The concept of partnering, all involved parties contributing to a common goal with the boundaries between companies becoming less critical.     
   Production Planning
  •    Benchmarking to establish ‘best in class’ production methods and outputs
  •    Establishment of a stable project programme, with clear identification of critical path.
  •    Risk management - to manage risks throughout the project     
   Logistics
  •    Just-in-time delivery of materials to the point of use eliminates the need for on-site storage and double handling     
   Construction
  •    Clear communication of project plans
  •    Training, teamwork, multi-skilling
  •    Daily progress reporting and improvement meetings
  •    A well motivated, well trained, flexible and fully engaged workforce.

A good overall approach to Lean in construction includes:
  • Product and process benchmarking and recommendations
  • Strategy development programme – leadership, business planning tools, policy deployment
  • Process improvement masterclass
  • Supply chain and supplier development programme
  • Communications, teamwork and team-leader training
  • Lean assessment
  • Company and project team roll-out programmes.

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USEFUL REFLECTIONS RELATING TO LEAN PROCESSES
Acknowledgement.  The following has been adapted from Value Engineering the Forgotten Lean Technique; University of Idaho, Industrial Technology Program, PTTE434, J. R. Wixson, Instructor. Circa 2006.

Some Thoughts on Lean
The cause of poor performance is wasteful activity. Lean is a time-based strategy and uses a narrow definition of waste (non- value-adding work) as any task or activity that does not produce value from the perspective of the end customer. [1] Increased competitive advantage comes from assuring every task is focused on rapid transformation of raw materials into finished product.
[1] James P. Womack, Daniel T. Jones. "Lean Thinking," Simon & Schuster; 1st edition (1996)

Lean Strengths
      Provides a strategic approach to integrated improvements through value stream mapping and the focus on maximizing the value-adding-to-waste ratio.
  •    Directly promotes and advocates radical breakthrough innovation.
  •    Emphasis on fast response to obvious opportunities. (just go do it)
  •    Addresses workplace culture and resistance to change through direct team involvement at all levels of the organization.
Stephen W. Thompson - Lean, TOC or Six Sigma: Which tune should a company dance to?, Lean Directions, Society of Manufacturing Engineers, Aug. 11, 2003

Lean Weaknesses
  •   May promote risk taking without reasonable balance to consequence.
  •    May not provide sufficient evidence of business benefit for traditional management accounting.
  •     Has a limitation when dealing with complex interactive and recurring problems (uses trial and error problem solving).
Stephen W. Thompson - Lean, TOC or Six Sigma: Which tune should a company dance to?, Lean Directions, Society of Manufacturing Engineers, Aug. 11, 2003

Comparing Lean to VE
      Lean reduces waste over time. VE, on the other hand, finds and fixes wasteful effort very quickly, but generally does so on an occasional, intervention basis, not on a continuous or systematic basis.
  •    VE does not require the encompassing and persistent level of support that an effective Lean effort requires.
  •    VE’s value approach and tools help teams focus on the high payoff areas first and generates larger savings sooner than are otherwise attainable through Lean.

Lean and VE Similarities
  •    Both VE and Lean rely extensively on transforming operations into alternative forms of visual information.
  •    A Lean team uses a variety of visual analytical tools to identify waste. “Spaghetti diagrams”, flow diagrams, bar charts, standard work sheets, production control boards and Value Stream Mapping , are all part of the Lean analytical toolkit.
  •    VE uses function analysis and FAST diagramming to describe the functional relationship of the product, process, project or service and identify functions where the team should focus and prioritize on improving value.
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Lean and Six Sigma (6s) 
Lean is often linked with Six Sigma. The cause of poor performance is variation in process and product quality. Random variations result in inefficient operations causing dissatisfaction of customers from unreliable products and services. [2] Increased competitive advantage comes from stable and predictable process allowing increased yields, improved forecasting and reliable product performance.
[2] George Eckes. "General Electric's Six Sigma Revolution:
How General Electric and Others Turned Process Into Profits," John Wiley & Sons; 1 edition (2000)
6s Strengths
  ❖    The rigor and discipline of the statistical approach resolves complex problems that cannot be solved by simple intuition or trial and error.
  ❖    The data gathering provides strong business cases to get management support for resources.
  ❖    The focus on reduction of variation drives down risk and improves predictability.
Stephen W. Thompson - Lean, TOC or Six Sigma: Which tune should a company dance to?, Lean Directions, Society of Manufacturing Engineers, Aug. 11, 2003
6s Weaknesses
  ❖    Statistical methods are not well suited for analysis of systems integration problems. (sigma can be calculated for a product specification, but how is sigma established for process interactions and faults.
  ❖    The heavy reliance on statistical methods by its very nature is reactive, as it requires a repetition of the process to develop trends and confidence levels.
  ❖    The strong focus on stable processes can lead to total risk aversion and may penalize innovative approaches that by their nature will be unstable and variable. S
tephen W. Thompson - Lean, TOC or Six Sigma: Which tune should a company dance to?, Lean Directions, Society of Manufacturing Engineers, Aug. 11, 2003
VE, Lean and Six Sigma
  ★   Successful VE results are largely dependent on the quality of information brought to the VE workshop.
  ★    Six sigma can provide the statistical evaluation necessary to support VE solutions.
  ★    Lean can provide Value Stream information that can lead to improved quality and throughput.
  ★    In combination with VE, Lean and Six Sigma provide a suite of tools that can lead to superior value through innovative solutions to problems in design, quality, and productivity.

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