Lean is basically a set of organization processes required to develop a product or service from initial concept to the final delivery to the customer by reducing waste and adding customer defined value. Lean means doing more with less while doing it better.
Why implement Lean
Usually more than 90% of any process is wasted time and activity. In today’s competitive marketplace many companies are continually looking for ways to win the race. Every new product idea must have a solid business case to back it up. Otherwise, management would not allow that project to continue. On several occasions, the fate of a project has rested upon cost versus market value. Lean is all about adding value to the product while eliminating waste.
Lean helps identify eight types of waste:
1.Motion: Unnecessary motion of personnel, equipment or information due to inadequate workspace layout, missing parts or tools and ergonomic issues
2.Transportation: Transporting items or information that is not required to perform the process from one location to another
3.Waiting: Time waiting for parts, tools, supplies or the previous process step
4.Overproduction: Producing more product than what is required to meet current demand
5.Defects: Non-conforming products or services requiring resources to correct
6.Inventory: Inventory or information that is being stored or not being processed likely due to line imbalance or overproduction
7.Unrecognized talent: Failure to effectively engage employees in the process and fully utilize their knowledge and skills
8.Non-value processing: Activity that is not adding value or required to produce a functioning part, product or service
By continually identifying and eliminating waste in our processes, we can lower costs and increase margin. Lean, done properly, enables an organization to be more adaptable to changes in the market and the economy. The development of a continuous improvement company culture is also an outcome of Lean. These organizations will not merely survive; these organizations will grow and given that, create additional jobs.
The five principles of Lean are as follows;
• Identify customer value
Remove non-value or waste activities from customer perspective.
• Map the value stream
No matter how efficient your process currently is, it most likely can be improved. Any step or operation that does not add value is waste. One method used to discover waste is the Value Stream Map. The Value Stream Map depicts how materials, parts and processes flow through the organization and on to the customer.
Through examination of the map, your team can identify which actions and processes add value and which are wastes. The team can then develop a “future state” map with as many of the non-value added actions and processes excluded.
• Create flow by eliminating waste
As you develop the new value stream, look for ways to change to a pull system where production is based on customer demand without the wait time and eliminate the waste.
• Respond to customer pull
Produce what the customer wants and when.
• Continuous improvement
There must be a commitment from management to provide the proper resources and on-going support to implement a Lean program that will stand the test of time. At the heart of Lean is gradual continuous improvement or Kaizen. An organization cannot expect to implement Lean overnight. It will require time, resources and hard work to build a robust and effective Lean program.
Comparison of traditional and lean process improvements
As can be seen from the above picture, in case of traditional process improvements along the small reduction in Non-value added(NVA) activities there is a certain reduction in Value added(VA) activities as well. But in case of Lean implementation, there is no reduction in Value Added(VA) activities while a huge reduction is NVA is achieved thus reducing the lead time.
Kaizen is a key building block for a robust sustainable Lean initiative. Kaizen philosophy empowers everyone to assume responsibility of their work processes and improve them. With Kaizen, workers at all levels of the organization are engaged in constantly watching for and identifying opportunities for change and improvement. Kaizen is a culture change that supports gradual continuous improvement on a daily basis. When everyone is working to reduce waste and improve processes the organization becomes Lean.
There are various approaches as to how Kaizen is implemented, a couple are listed as follows;
• Daily event: Improvement ideas implemented by everyone everyday.
• Blitz event: Rapid improvement workshop designed to produce results in a few days.
Six Sigma is a methodology focused on creating breakthrough improvements by managing variation and reducing defects in processes across the enterprise. It is a proven data driven structured process improvement methodology for sustainable business improvement, driven by business and customer expectations. If we can measure process variations that cause defects i.e. unacceptable deviation from the mean or target, we can work towards systematically managing the variation to eliminate defects.
It is extremely important to remember that Six Sigma is not just about product quality where only three products in a million are defective. It is about what is important or critical to the customer, whether internal or external. It is focuses on value in context of the customer and the market.
Six sigma goals
• Reduce process variation
• Shift the process mean to the center ,i.e., move the average process performance to the target
As depicted by the below picture, in case of variation which is out of the customer expectation range or in case the mean is not centered it is considered as defective and the goal would be to reduce the variation and center the mean as per customer expectations.
Six sigma approach
• All work occurs in a system of interconnected processes.
• Variation exists in all processes, whose characteristics can be measured, analyzed, controlled and improved.
• Understanding cause of variation and continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of vital importance to business success.
• Reduced variation results is improved customer satisfaction.
Lean Six Sigma DMAIC Methodology
DMAIC is a data-driven quality strategy used to improve processes. It is an integral part of a Six Sigma initiative, but in general can be implemented as a standalone quality improvement procedure or as part of other process improvement initiatives such as lean.
DMAIC is an acronym for the five phases that make up the process:
•Define the problem, improvement activity, opportunity for improvement, the project goals, and customer (internal and external) requirements.
•Measure process performance.
•Analyze the process to determine root causes of variation, poor performance (defects).
•Improve process performance by addressing and eliminating the root causes.
•Control the improved process and future process performance.
The PDCA-Cycle, also called the Deming-Cycle or Shewhart-Cycle, is the classic problem-solving approach in a LEAN environment. PDCA is used for medium sized problems and the Act-phase implies that the PDCA-Cycle should start again in the sense of a continuous improvement process. Basically, DMAIC is a 5-Step PDCA used for large problems where typically a huge amount of data is available.
The funneling effect of DMAIC
The Six Sigma process seeks to improve processes by eliminating variation and defects, the opportunities for variation and defects in the process, and all non-value added activities. The DMAIC process begins with clearly defining the problem by way of a formula, called the ‘Y Statement,’ where the process output “Y” is a function of one or more inputs, or “Xn”: Y = f(X1, X2, X3…Xn)
The DMAIC process is designed to provide a systematic method to reduce the number of key inputs down to a manageable set that have: a) a statistically significant impact on the process output, and b) a definable action plan. This “funneling effect” is illustrated as below.
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