Module 5 Project Deliverables: C&E Diagram, Pareto Chart, & 5 Whys
Lean Six Sigma Module 5 Project
Instructions
Submit the C&E Diagram, Pareto Chart, and 5 Whys deliverables of your project.
Project File and Student Guide
Download the project file and student guide by
visiting this page
.
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Case Study:
Lean
Process Improvement –
Nova Point
Tina Agustiady
Certified Six Sigma Master Black Belt
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Executive Summary
Nova Point is a growing product for a main ice-cream factory named Uncle T’s.
The product is selling extremely well, and sales have been rising for the past
year. Over the past year, with the increase of sales there also has been an
increase in complaints for thick or thin ice-cream. Customers felt that some ice-
cream was too thick losing the fluffy texture and some had thin ice-cream that
melted too quickly in their mouth making it feel like a liquid. Poor quality of the
Nova Point causes thick or thin product resulting in major quality variation in the
product due to materials, methods, machinery, measurements, manpower or
mother nature. The product is made in two main factories, but most of the
problems are coming from one factory. The product with the problems is made
on a production line where the temperature is warm within the factory. They are
also scrapping a great amount of product due to the product now being inedible.
It goes through a series of processes mainly kettles where raw materials enter
and then go through a series of mixing steps. The materials are then pumped out
onto a production line and packaged. The current First Pass Quality is 91% and
there are many holds on the product due to thick or thin product that is held
within the factory before it is sent to
the customer.
The goals of the project are to:
▪ Increase first pass quality from 91% to 99%
▪ Reduce holds by 10%
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Methodology
▪ Determine improved process for thick/thin issues while implementing
specifications for ingredients
▪ Determine the waste coming from the product/process
▪ Create standardized work and train all associates
▪ Determine proper preventative maintenance for equipment
▪ Determine possible equipment replacement and/or upgrades
What is Lean?
Lean is the pursuit of perfection via a systematic approach to identifying and
eliminating waste through continuous improvement of the value stream,
enabling the product and information to flow at a rate determined by the pull of
the customer.
The five principles of lean are:
• Identify Value
• Map the Value Stream
• Create Flow
• Establish Pull
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Figure 1. Lean System
Introduction
Tina Agustiady – Continuous Improvement Leader
Tom Jones – Operator
Michelle VanHutson – Operator
John George – Production Engineer
Nancy Feller – Maintenance Coordinator
Todd Peterson – Plant Manager and Project Champion
Andy Myers – Executive Sponsor
Master Black Belt – Michael Bell
The team was selected based on knowledge and expertise of the process.
The team did a great job and was proficient and organized during the project.
Identify
Value
Map the
Value
Stream
Create
Flow
Establish
Pull
Seek
Perfection
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IDENTIFY VALUE
A project charter is developed to show responsible personnel, problem
statements, goals, and timelines.
PROJECT CHARTER PURPOSE
The purpose of this Continuous Improvement project is to pilot the CI
methodology in a factory utilizing a structured approach and being able to
benchmark the findings across processes. We want to identify where we
can add value, and this can be seen through the project charter.
PROJECT EXECUTIVE SUMMARY
▪ Determine the improved process for thick/thin issues while
implementing specifications for ingredients
▪ Determine the waste coming from the product/process
▪ Create standard work and train all associates
▪ Determine proper preventative maintenance for machinery
▪ Determine possible equipment replacement and/or upgrades
PROJECT OVERVIEW
Business Justification consists of reducing thin/thick Issues associated on
the manufacturing line and increasing first pass quality (FPQ).
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PROJECT GOALS
Table 1. Project Goals
Goals Objectives
Increase first pass
quality (FPQ) to 99%
and reduce holds by
10%
▪ Determine manufacturing process along with
specifications and reduce thick/thin issues
▪ Determine if target specifications are accurate
or need to be revised
▪ Train all personnel on manufacturing process
and create manual
▪ Determine proper preventative maintenance for
machinery
▪ Measure initial viscosity and temperatures for
correlation vs 24-hour viscosity
Table 2. Milestones and Deliverables
Milestone Deliverable
1. Conduct Training • Identify training dates
2. Create Manual • Manual will be for documentation and training
purposes
3. Create preventative
maintenance (PM’s) for
main equipment
• PM’s will be established, and sign off sheets will be
available
4. Benchmark factory with
best practices
• Determine best in-class process and implement in
both manufacturing plants
5. Reduce holds and
consumer concerns by
10%
• Determine correlation between holds and consumer
concerns
6. Determine root causes
of each hold and
• Ongoing
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consumer concern and
document action plan
7. Maintain consumer
concerns under 2.5M
pounds, focusing on v-
line
• Ongoing
8. Reduce material waste
from icings and v-line
back to 2018 levels or
better
• Ongoing
9. Improve consistency
and reduce variation
from v-line process
• Ongoing
Deliverable Module 3
Please fill out a project charter from the Excel templates
provided.
Figure 2. Project Charter
Phase Start Finish
Identify Value
Map the Value
Stream
Create Flow
Establish Pull
Seek Perfection
Organization
Approval/Steering Committee Stakeholders & Advisors Project Team & SME’s
Name Organization Name Organization Name
High Level Project Timeline Constraints & Dependencies Project Risks Other Diagnostics
Project Goals Project Scope
Primary Metric Secondary Metric
Problem Statement Business Case
Project Title:
Black Belt Project Champion Executive Sponsor MBB/Mentor
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MAP THE VALUE STREAM
Three levels of process mapping can be utilized in order to visualize the process steps
as they occur, understand the process and to provide a baseline of the current process
as a starting point for improvements. Three levels of process mapping are:
• A high-level process map
• A
SIPOC
• A value stream map (VSM)
The manufacturing process is defined as the following:
• Place icing in Kettle 1
• Complete a shortening quality check
• Transfer icing
to Kettle 2
• Complete a viscosity check
• Transfer product to final assembly
• Perform final quality check
• Package product
HIGH-LEVEL PROCESS MAP
In a high-level process map, also known as a macro level process map,
the major process steps are defined in the order that they occur. Think of
this as a 50,000-foot view of the process. Additional detail can be added to
the high-level process map as needed as the project proceeds.
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SIPOC
SIPOC is an acronym that stands for supplier, input, process, output and customer.
A SIPOC is a process mapping variant that for each process step identifies the inputs,
the suppliers (internal or external) for those inputs, the outputs and the customers
(internal or external) for that output
VALUE STREAM MAPPING
A value stream map is a form of process mapping that identifies the flow of
information in addition to process flow. It is also designed to collect data about
process steps.
Here is information for the VSM map:
1. First, label the process steps with the steps from the High-Level Process Map.
You will have to add a couple more steps to the Value Stream Map template
2. Then, transfer the following data onto the Value Stream Map: Cycle Time
(C/T), Change-over Time (C/O time), FPY (First Pass Yield), and Percent
Holds. You will have to replace or eliminate some of the other symbols in the
data blocks (if you are curious what the existing data acronyms mean, see the
note at the end of this instruction)
Process Steps
(Value Added)
C/T
(hours)
C/O
(hours)
FPY
(%)
Holds
(%)
Icing in Kettle 1 6.0 0.5 98% 0%
Shortening
Quality
Check
1.0 0.0 85% 20%
Icing Transfers
to Kettle 2
3.0 0.5 98% 0%
Check Viscosity 1.0 0.0 76% 25%
Transfer to Final
Assembly
1.5 0.5 98% 0%
Final Quality
Check
0.5 0.0 95% 5%
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Package Product 2.0
0.25
96% 0%
For example, the data block for the first step will look like this:
C/T 6.0
C/O 0.5
FPY 98%
Holds 0%
3. Fill in the value-added times on the timeline below each step the map, using
the cycle time (C/T) for that step.
4. Add the inventories before each process step in the triangles, or right below the
triangles if you like.
Process Steps
(Value Added)
Inventory
before Step
(Non-Value
Added), in tons
Icing in Kettle 1 15
Shortening
Quality Check
3
Icing Transfers
to Kettle 2
5
Check Viscosity 3
Transfer to Final
Assembly
10
Final Quality
Check
5
Package Product 10
5. Fill in the non-value-added times below each inventory. You will have to
convert the tons of inventory before each step into hours of inventory. Assume
the customer demand is 50 tons per day. This is 2.08 tons per hour. Then for
the step Icing in Kettle 1, you would have 15/2.08 = 7.2 hours on inventory. Do
this same calculation for each inventory and put those values on the timeline.
6. Add up the value-added times from the timeline. Then add up separately the
non-value added (wait) times. Finally, calculate the total lead time for the
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process by adding the value-added and wait time totals. Show the total lead
time anywhere above the value stream.
Total Lead Time = Total Value- Added Times + Total Wait Times
7. Calculate the Cycle Efficiency and show this next to the total lead time:
Cycle Efficiency = 100% * Value Added Time
Total Lead Time
Deliverables Module 4
Please complete the three levels of process maps using the Excel template
provided :
• High-level process map of the current process
• SIPOC
• High -level value stream map (VSM)
ROOT CAUSE ANALYSIS (RCA)
RCA includes a very structured approach to investigating issues for a permanent fix of a
problem. What is sought is the true or root cause of the problem, which many people
mistake with short-term fixes. Guards put in place on manufacturing lines and buckets
put in place to eliminate waste are examples of short fixes. The problem still occurs,
there is just a measure put in place to try and eliminate the waste. The problem is not
prevented from happening as a result of short-term fixes.
RCA explores the possible causes of problems to determine the root cause. Even
though assumptions are utilized for RCA, they should be backed up with documentation
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and data. Data driven conclusions should be made. RCA can also point out possible
areas where data can be collected.
The three RCA tools that this project will use are
• Cause and effect diagram
• Pareto charts
•
5 Why’s
Cause and Effect Diagram
A Cause and Effect Diagram will examine the importance of the different
variables that play a part in the thin and thick holds.
Steps to conducting a Cause and Effect or Fishbone Diagram include:
• Brainstorm all possible causes of the problem or effect selected by classifying
ideas under the following categories (6M’s):
o Manpower
o Machinery
o Methods
o Measurements
o Materials
o Environment (Mother Nature)
• Focus on the quantity of ideas rather than quality. One person’s idea will
trigger someone else’s idea, and a chain reaction will occur
• No Criticism allowed, ALL team members must participate
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Deliverable Module 5
Please complete a Cause and Effect Diagram using the Excel template
provided.
Pareto Chart
A pareto chart is completed to see what the biggest reasons are for having
quality problems. A pareto chart is a visual root cause analysis tool that displays
the type of problem versus the frequency of them to determine which are the
biggest problems to focus on.
Data was collected about the problem:
Categories (Causes) # of Occurrences
Water in pipe 55
Liquid sucrose 25
Supplier providing out of spec materials 48
Clean out water not purged 32
Quality of shortening 41
Deliverable Module 5
Please complete a Pareto Chart using the Excel template and the
information provided.
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Automatically it could be seen according to the pareto chart that the water in the
pipe needed to be dealt with along with product specifications and the quality of
the shortening in that order.
Finally, specifications were gathered to ensure the process was on target:
▪ 83% of Holds in Factory A are for Viscosity
▪ Factory B has wider specs for Viscosity due to different Uses
▪ Factory B requires tighter spec range
▪ Factory A specs: Viscosity: 200,000 – 600,000 cps
▪ Factory B specs: Viscosity: 320,000 – 512,000 cps
5 Why’s
The 5 Why’s is a root cause analysis tool where the question why is asked 5
times to drill down from the symptom to the root cause of a problem.
A 5 Why’s analysis to understand why the water was clogging in the pipe can be
done by referencing the figure below.
Figure 3. Water Pipe
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Deliverable Module 5
Please complete a 5 Why’s analysis on the water in the pipe issue using the
Excel template provided.
CONCLUSION OF MAP THE VALUE STREAM
Data was taken of as many parameters as possible before changing any
variables. It was found that piping was making a significant impact on the
process and there needed to be analysis completed for that.
The following was accomplished during the mapping of the value system:
• Process Mapping
• Data Gathering
• Cause and Effect Diagram
• Root Cause Analysis
• Pareto Chart
• 5 Why’s
CREATE FLOW
WASTE WALK (GOING TO GEMBA)
It is important to understand the types of waste that were occurring in the
process. The team decided to do a floor walk (Go to Gemba) to find the main
types of waste according to the acronym DOWNTIME.
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Deliverables Module 6
• Please complete the Waste Walk tab in the Excel template provided.
Be creative here, there are no right or wrong answers!
• Please complete the RCA tab in the Excel template provided as to
why the water is clogging in the piping system. What is the key
factor for the root cause of the thick/thin product issue?
CONCLUSION OF CREATE FLOW
In Lean management, flow is a key concept. Since any kind of waiting is a waste,
when creating a flow of value, your goal is to ensure smooth delivery from the
second you receive an order to the moment when you deliver it to the customer.
Hints to improving flow:
• Map the process
• Talk to Subject Matter Experts about issues
• Identify all types of different waste in the current process
• Map an ideal state – the perfect process
• Develop an action plan
• Actively monitor the new processes put into place by creating performance
measures
• Think about places where batch processing can be changed to single
piece flow
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ESTABLISH PULL
The team decided to change the piping so that water could flow quicker through the
piping to make more consistent product that was in specification. The extra water in the
pipe could make the product thin by dispersing too much water from the pipe or too
thick by not having enough water because it was stuck in the pipe.
The changes to the piping were made immediately:
Figure 4. Changes to Piping
Ensure Pipe from Pipe #1 to Product is purged and has no residual
water
Changed pitchRemoved sweep
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Since the temperature of 235 degrees in Factory A seemed to have better specifications
than Factory B at a lower temperature, we decided to benchmark and make a Standard
Operating Procedure to heat the product to 235 degrees.
KANBAN
The team noticed that all of the raw ingredients were brought to the line at the
beginning of the shift. This caused some of the ingredients to start melting
before they were put in the kettle.
The team decided to setup a Kanban system in order to have the ingredients
come to the line at the proper temperature and just in time for them to use them.
Deliverable Module 7
Please complete the Kanban card(s) in the Excel template by filling out the
following information:
• Part Description/Picture if Applicable
• Part Number
• Profile
• Quantity
• Lead Time
• Due Date
• Supplier
• Location
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• Card Number (Generally two Kanban cards 1 of 2 and 2 of 2)
CONCLUSION OF ESTABLISH PULL
Many opportunities were identified, and action items were completed to improve
the variation issues for Nova Point.
• Piping changes to ensure water is not stuck in 3-way valve of pipe
• Benchmark Factory A
• Training to teach all operators how to make product properly and
consistently
• Temperature changes to Benchmark Factory A
The three major variables are:
Variable 1 – Piping
• After several tests and data analysis, the thin and thick issues
were minimized after the piping changes
• Therefore, the piping changes were significant and were an impact and
root cause of the thick/thin product issues.
Variable 2 – Specifications for Thin or Thick Product
• We also spoke to the supplier and changed our specification
ranges with them saying we would no longer take any raw
material out of specification because it was ruining our
reputation.
Variable 3 – Temperatures
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• The temperature of 235 degrees in Factory A seemed to have better
specifications than Factory B at a lower temperature.
SEEK PEFECTION
An audit checklist will be used to perform continual audits to ensure the improved
manufacturing process is sustained.
Deliverable Module 7
Please complete an Audit Checklist to ensure the process is sustained.
CONCLUSION TO PROJECT
One major change was made as a result of the project involving the piping. The water
was being trapped in a pipe, making the product thick or thin based on whether the
Target Area: Statement of Audit Objective: Auditor: Audit Date:
Audit Technique Auditable Item, Observation, Procedure etc.
Observation Have all associates been trained? YES NO
Observation Is training documentation available? YES NO
Observation Is training documentation current? YES NO
Observation Are associates wearing proper safety gear? YES NO
Observation Are SOP’s available? YES NO
Observation Are SOP’s current? YES NO
Observation Is quality being measured YES NO
Observation Is sampling being conducted in random fashion YES NO
Observation Is sampling meeting it’s sample size target? YES NO
Observation Are control charts in control YES NO
Observation Are control charts current? YES NO
Observation Is the process capability index >1.0? YES NO
#DIV/0!
Auditor Comments
Audit Checklist
Individual Auditor Rating
(Circle Rating)
Number of Out of Compliance Observations
Total Observations
Audit Yield
Corrective Actions Required
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water purged from the pipe. The pipe was changed and immediately the problem was
fixed.
The successes of the project include :
• Identified root causes for product quality variation
• Removed waste from the process
Lean Six Sigma Tools Used
• Project charter
• Process mapping
• SIPOC
• Value stream mapping
• Pareto charting
• Root cause analysis
• Cause and effect diagrams
• 5 Why’s
• Waste walk (Gemba)
• Kanban
• Audit
Project_Charter
DELIVERABLE
MODULE 3 – PROJECT CHARTER
Statement
Name Organization
Organization
VILLA
VA UNIVERSITY
High Level
Process
Map
| DELIVERABLE MODULE 4 – HIGH-LEVEL PROCESS MAP |
| Please add in extra processes and symbols as needed |
SIPOC
| DELIVERABLE MODULE 4 – SIPOC | |||||||
| Introduction and Instructions for SIPOC | |||||||
| SIPOC is an acronym that stands for supplier, input, process, output and customer | |||||||
| A SIPOC is a process mapping variant that for each process step identifies the inputs, the suppliers (internal or external) for those inputs, the outputs and the customers (internal or external) for that output | |||||||
| Using the template below, begin by filling in the “Process” column with the process steps identified in the high-level process map | |||||||
| Then, for each process step identify the inputs, the suppliers (internal or external) for the inputs, the outputs and the customers (internal or external) for the outputs | |||||||
| S.I.P.O.C. Template | |||||||
| Supplier | Inputs | Outputs | Customer |
VILLANOVA UNIVERSITY
Start
Step 1
Step 2
Step 3
Step 4
End
VSM
| DELIVERABLE MODULE 4 – VSM |
| Value Stream Map |
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Copyright 2016 GoLeanSixSigma.com. All Rights Reserved.
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TOTAL
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%C&A
Cause_Effect_Diagram
| DELIVERABLE MODULE 5- CAUSE AND EFFECT DIAGRAM |
| Instructions: |
| STEP 1 : Define the problem. What is the product, process or service that has failed. |
| STEP 2 : Starting with ‘Materials’ or any other label, ask: is there anything about materials that |
| might contribute to the problem. Record it next to one of the arrows under Materials. |
| STEP 3 : Repeat asking “is there anything about materials that might contribute to the problem” |
| Record each result next to an arrow. |
| STEP 4 : Repeat Step 2 & 3 for each successive category. |
| STEP 5 : Identify the candidates that are the most likely Root Cause |
| STEP 6 : If further “screening” is necessary, assess the likely Root Causes using the “Impact” |
| and “Implement” matrix, selecting items marked 1, then 2 . . . 4 as priorities. |
Pareto
| DELIVERABLE MODULE 5 – PARETO CHART | |
| Categories | # of Occurrences |
| Issue 1 | |
| Issue 2 | |
| Issue 3 | |
| Issue 4 | |
| Issue 5 |
5-Why’s
| DELIVERABLE MODULE 5 – 5 WHY’S |
| 5-WHY ANALYSIS SHEET |
| Note: Continue on separate page if 5-Whys are not enough to determine root cause. |
WHY ? #1:
WHY ? #5
WHY ? #2:
WHY ? #4
WHY ? #3
TEMPORARY Date:
COUNTERMEASURES
FINAL COUNTERMEASURE Name:
– PERMANENT CORRECTIVE ACTION Date:
VERIFICATION:
No Recurrence in Three Months? TBD Date:
Single-Point Lesson? _________ Date ________
DO THE 5 WHY’S MAKE SENSE WHEN READ BACKWARD?
Waste Walk
| DELIVERABLE MODULE 6 – WASTE WALK | |
| 8 Wastes/Waste Walks | |
| Defects | |
| Overproduction | |
| Waiting | |
| Non Utilized Talent | |
| Transportation | |
| Inventory | |
| Motion | |
| Excessive Processing | |
| Waste Type | Describe the waste you saw |
Root Cause Analysis
| Deliverable Module 6 Root Cause Analysis |
| Root Cause Analysis (Please state your conclusions) |
Kanban
| DELIVERABLE MODULE 7 – KANBAN | |||||
| KANBAN CARD | |||||
| Part Description/Picture if Applicable | Part Number | Profile | |||
| QTY. | Lead Time | Due Date | |||
| Location | Card # | ||||
| 1 OF 2 | |||||
| 2 OF 2 |
Audit_Checklist
| DELIVERABLE MODULE 7 – AUDIT | ||||||||||||||
| Audit Checklist | ||||||||||||||
| Target Area: | Statement of Audit Objective: | Auditor: | Audit Date: | |||||||||||
| Audit Technique | Auditable Item, | Observation | Individual Auditor Rating (Circle Rating) | |||||||||||
| Have all associates been trained? | YES | |||||||||||||
| Is training documentation available? | ||||||||||||||
| Is training documentation current? | ||||||||||||||
| Are associates wearing proper safety gear? | ||||||||||||||
| Are SOP’s available? | ||||||||||||||
| Are SOP’s current? | ||||||||||||||
| Is quality being measured | ||||||||||||||
| Is sampling being conducted in random fashion | ||||||||||||||
| Is sampling meeting it’s sample size target? | ||||||||||||||
| Are control charts in control | ||||||||||||||
| Are control charts current? | ||||||||||||||
| Is the process capability index >1.0? | ||||||||||||||
| Number of Out of Compliance Observations | ||||||||||||||
| Total Observations | ||||||||||||||
| Audit Yield | ERROR:#DIV/0! | |||||||||||||
| Corrective Actions Required | ||||||||||||||
| Auditor Comments |
VILLANOVA UNIVERSITY
Lean
Six Sigma
Creating Flow
Flow – the Third Lean Principle
Flow is the third of the 5 lean principles. Flow is how the product, patient, claim, service, or
sandwich – or whatever you do – moves through the value stream. Where there is a physical
output (a widget in manufacturing or a patient in the doctor’s office), it is easy to see the flow.
In information-based or transactional environments (such as call centers or insurance claim
processing), it is more difficult to see the flow.
Whether it is a tangible product or an intangible output, flow is fundamental to Lean
operations. In the absence of good flow, you have processes that are confusing, that perform
poorly, that mask problems, and just generally are loaded with muda!
Let’s explore a couple of examples.
Examples of Typical Situations
The Doctor’s Office Visit
We all occasionally go to the doctor’s office. From the initial contact to make an appointment
to the final step (depending on what you define as the final step), the visit is a series of steps
that are executed in some sort of flow. What might a typical visit look like?
• Call for appointment…and wait
• Check in at desk…and wait
• Nurse/tech takes vitals and gathers info…and wait
• Doctor comes in, diagnoses, and prescribes
• Send over to lab for test…and wait
• Draw sample for lab test…and wait
• And beyond!
You see lots of starts/stops and disruptions to the flow. Does this flow result in a satisfied
customer/patient? The answer probably depends on the customer/patient expectations, but it
is easy to see that there are opportunities for improvement once the value has been defined.
Lean Six Sigma
The Manufacturing Order
Now, let’s look at a manufacturing order. In a current state process, the value-added (VA) steps
are likely mixed in with many non-value-added (NVA) steps. If the flow is , messy, or
confusing, you can bet there will be opportunities for improvement with effective flow. What
might a typical order look like?
• Customer asks for quote…and wait
• Turn quote into production order…and wait
• Parts ordered from supplier…and wait
• First operation complete…and wait
• Second operation machine down…and wait
• Final operation complete…and wait
• Find missing shipping info…and wait
• And more!
Again, you can see many starts/stops and disruptions to flow. You can begin to imagine each of
the different eight wastes residing somewhere in that flow.
Both of these examples illustrate conditions where effective implementation of flow will
produce great benefits, regardless of industry or type of process.
Two Kinds of Flow
To better understand the power of flow, let’s break the flow topic into two different kinds of
flow. They are:
• Streamlined flow – the path the product or service takes to completion
• Continuous flow – once the product or service starts, it does not stop
Let’s look at each type of flow more closely.
Streamlined Flow
Streamlined flow deals with the path in which the work moves. Think of a two-dimensional
picture of the path of work – sounds like a spaghetti diagram!
Lean Six Sigma
What does the picture look like? Is it clear, concise, easy to understand, maybe even U-shaped?
Or does it wind around, crisscross, go from one end of facility to the other end, and then back?
We can look at the streamlined flow within a work area, within a facility, or even across an
entire extended value stream. Once you start to study and document the condition of
continuous flow in a process, you may find that it will be the first-time people working in and
supporting the process have ever given consideration the flow.
Continuous Flow
Continuous flow deals with the disruptions (or lack thereof) in the process. Let’s consider
manufacturing situation where there are four operations to make the part.
How many times do you pick it up and put it down? Does it move directly to the next operation,
or does it go to warehouse or WIP (work-in-progress) location – or wherever there is some
open space to sit and wait?
The alternative is for the layout to be designed so the part is picked up at the first operation,
then “handed” to the second operation without waiting and repeated until operations are
complete. In the ideal state, the part never touches the ground and never stops. Talk about WIP
reduction – throughput time decrease – and easy to control shop floor!
Now, let’s consider a service industry example, the sit-down mid-level restaurant. What might
the disruptions be to continuous flow in this environment?
Did you have to wait – either because there was no capacity or because the empty tables have
not been bussed? Is the server available promptly? Is there too much or too little time between
the salad and the main course? Did some of the food have to go back to kitchen, which gets
that person out of sync with rest of party?
Or is there a smooth, calm, predictable, continuous flow that results in a satisfied customer?
As with the rest of the lean ideas, continuous and streamlined flow transcend industry
boundaries.
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Slow Down to Speed Up?
When was the last time your boss told you to slow down? This sounds counter-intuitive! But
sometimes that is exactly what should be done.
Consider a process with four operations again. If Operation #3 produces at 70% rate of the
other three operations, what happens? Operation #2 buries Operation #3 because #2 is faster
than #3, and Operation #4 is starved because it produces faster than #3 – resulting in lots of
muda.
So, what might the countermeasure be to achieve balanced streamlined one-piece continuous
flow? Assuming that the pace Operation #3 is running is satisfactory to meet the customer
demand, you could slow down the whole process to match the constraint (Operation #3). If the
whole operation needs to run at the pace of Operations #1, #2, and #4, then you must figure
out how to get more resource (capacity) for Operation #3 (after you have eliminated all the
muda, or course!).
In short, sometimes it does make sense to slow down to make the overall process more
effective and efficient.
Batch and Queue
Our traditional ways of operating with batch and queue practices automatically build in
disruptions to flow. We take a batch of 5 or 50 or 500 parts or claims or patients – whichever is
relevant to your industry. Batch and queue instills a very lumpy and disrupted process; that is
one of our great opportunities for improvement!
The following example Illustrates the impact batch and queue versus one-piece flow. Note that
the batch of 10 takes 40 minutes for the entire 10 pieces to complete, while the one-piece flow
takes 13 minutes for all 10 pieces to complete.
Lean Six Sigma
How Does Flow and Pull Affect Speed?
Batch & Queue with Poor Flow
I
Inv = 1
0
Oper.
#
1
Finished
Goods
I
Inv =
10
Ope
r.
#2
I
Inv = 10
Ope
r.
#3
I
Inv = 10
Oper.
#4
• Lot of congestion and
crossing intersections
• Difficult to see flow
• Introduces muda of
transportation and
motion
• Difficult to communicate
between processes
Push!!!
How Does Flow and Pull Affect Speed?
One-Piece Flow in U-Shaped Cell
I
Inv = 1
Oper.
#1
I
In
v
=
1
O
pe
r.
#2
I
In
v
=
1
O
pe
r.
#3
I
Inv = 1
Oper.
#4
Finished
Goo
ds
• U-shaped cell defines
flow
• Easy to see the process
• Transportation and mo-
tion muda reduced
• Upstream and down-
stream operators can
communicate Pull!!!
Lean Six Sigma
(Mfg Leadtime – Assuming Cycle Time = 1 Min and Use FIFO)
Batch & Queue with Poor Flow One-Piece Flow in U-Shaped Cell
I
Inv = 10
Oper.
#1
Finished
Goods
I
Inv = 10
Oper.
#2
I
Inv = 10
Oper.
#3
I
Inv = 10
Oper.
#4
MFG LT for 1 piece or entire lot =
10 + 10 + 10 + 10 = 40 min.
MFG LT for 1 piece =
1 + 1 + 1 + 1 = 4 min.
MFG LT for entire lot = 13 min.
I
Inv = 1
Oper.
#1
I
In
v
=
1
O
pe
r.
#2
I
In
v
=
1
O
pe
r.
#3
I
Inv = 1
Oper.
#4
Finished
Goods
Lean Six Sigma
Spaghetti Mapping
Spaghetti mapping is a tool in Lean Six Sigma that can be used to expose
inefficient process layouts, unnecessary travel, and overall process
waste. This Lean technique uses a line to trace the path of a person or
object throughout a process to create a spaghetti diagram.
The steps for aping a spaghetti diagram are as follows:
1. Create a map of the work area layout
2. Observe the current workflow and draw the actual work path from
the very beginning of work to the end when products exit the work area
3. Analyze the spaghetti chart and identify improvement opportunities
Lean Six Sigma
Quick Changeover
Introduction
This lecture will discuss single minute exchange of die (SMED). At the
end of this lecture, students should be able to:
• Discuss the history of SMED and its importance
• Identify the eight steps of SMED implementation
• Describe the different wastes addressed by SMED
Definition
Quick changeover refers to the amount of time it takes for operators to
set up equipment to move from processing one type of product to
another.
History
Shigeo Shingo working for Toyota, one of the architects of Toyota
Production System (TPS), is recognized as the developer of single minute
exchange of die (SMED).
• Observed that long changeovers resulted in long lead times, large
lot sizes, and reduced utilization
Figure 2: Toyota Production System Model
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• At the time, Toyota’s objective was to reduce set-up time by
59/60ths of a minute, or 1 (one) minute. SMED approach
creates process for and expectation of changeover is less than 10
minutes.
• SMED is important because it adds value, reduces waste, and allows
to produce optimum lots sizes based on the organization.
Changeover Time Definition
• Last good part of previous run to first good part of next run
• More than just sliding old die out – new die in.
• Includes tweaking, finding tooling, and other NVA tasks
Importance of SMED
• Changeover time is not value-added
• Expensive resources not producing
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• Opens capacity and relieves constraints
• Allows to make what we need, not what is determined by economics
of long changeover
8 Techniques to SMED
• As with many of the lean methods and tools, a defined approach
or structure is helpful to be consistent and effective
• With SMED, there are eight steps or techniques
• Each step builds on the previous step in a logical way
1. Separate Internal from External
• Internal is work done while the machine (or process) is stopped
• Cannot unclamp die set while ram is still going up and down
• Study the process to understand which is internal and which is
external
• Capitalize on the low-hanging fruit!
2. Convert Internal to External
• Evaluate work that is internal for opportunities to convert to
external
• Look for opportunities such as pre-set tools and robust locators to
eliminate tweak/adjust
• Ideal changeover time is ZERO…through ideas like
universal fixtures
3. Standardize
• Look for ways to standardize the changeover work
• The way parts are fixtured, the way materials are presented, and
the way information is delivered might be done in standard ways
• Standardization removes the need for judgement, second-
guessing, and confusion
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4. Clamping and Fastening
• Securing the part(s) is essential to producing quality products
(weld, machining, or assembling)
• Are clamps and fasteners manual (tightened by hand), or are they
quick clamp pneumatic or magnetic?
• Are connections quick-connect/disconnect or individual
threaded connections – manifold connector or one-at-a-time
connectors?
5. Intermediate Positioning
• Look for ways to position the work prior to stopping the machine,
especially for work that requires manual attention
• Use a duplicate jig or fixture to prepare the next work piece
• Move some of the loading time from internal to external
6. Parallel Operations
• Sometimes, the changeover time can be reduced by having two
people concurrently work
• Think of a machine or process where there are front and back
sides
• Instead of one person going back and forth, have two work
concurrently
7. Eliminate Adjustments
• Think of all the waste involved in set-up: run a piece, check the
piece, adjust, run another piece, check the piece, adjust, and
repeat!
• The Lean practitioner is always looking for ways to eliminate the
adjustments since this may account for 50% of the internal
changeover time
• Tool setting, positive locators, standard process, and proper
training are all ways to reduce and eliminate adjustments
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8. Mechanize and Automate
• The final step in SMED may involve spending capital, which is
why the other steps should be done first
• Consider earlier industrial technology that may have required run,
check, shim, and run again versus more current technology that
can self-probe and adjust during a machine cycle
• Be creative with Steps 1 through 7 before spending money on
Step 8
Recognizing the Eight Wastes
• Understanding the eight wastes is foundation for the lean body
of knowledge
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• You will see each of the eight wastes as you implement SMED
and quick changeover
• Challenge the changeover task and look for solutions through the
lens of eight wastes
Quick Changeover for Non-Manufacturing
• Turnaround time for room in ER
• Moving from last quote to next quote
• Changing from breakfast menu to lunch menu
Lean Six Sigma
Using
Takt Time
and Cycle Time
Some Operational Questions
Regardless of your industry, how do you answer these operational questions?
• How fast do we need to run?
• Are operations balanced?
• Where is the constraint?
• Do we need to add a machine, person, or shift?
• Can we meet our customers’ demand?
Is it anecdotal based on past experience? What does the “wisest” person in the operation
think? Or what do the supervisors believe? Making these decisions with data instead of gut
instinct is critical to a Lean operation. Takt time (TT) and cycle time (CT) help to make data-
based decisions.
Definitions
Are you a musician, or do you have family members who are musicians? If so, you can probably
relate to the comparison of the metronome to takt time. Simply put, takt time is the pace you
need to produce to meet your customer demand. The equation is takt time equals available
time divided by units of demand. The result is time per unit of demand.
Cycle time is the pace you are really running at. A best practice when trying to understand cycle
is to go to the gemba to “go see.” Also, it would be a good idea to take along a stopwatch to
measure the cycle time firsthand.
Takt time and cycle time are independent of one another, but, when together, tell a story.
When the takt time (pace to meet customer demand) is compared to the cycle time (pace you
Takt Time =
Available Time
Units of Demand
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are actually producing at), you have the information to assess whether or not you can meet
your customer demand.
Chart 1: Takt Time / Cycle Time Chart
You can see that the takt time / cycle time chart pulls these critical and independent pieces of
together in one place. Let’s assume this is a cell with three operations. The columns show the
cycle times for Operations A, B, and C. The horizontal line shows the takt time for this example.
An informed picture about the cell begins to emerge.
Observations include:
• Operation A’s cycle time is greater than takt time (cycle time = 90 seconds, and takt
time = 70 seconds). That indicates a problem because Operation A cannot produce
enough to meet demand
• Operation B and C cycle times are both at or below the takt time (Op. B cycle time = 50
seconds and Op. C cycle time = 60 seconds). You should be okay to meet the demand,
although you might consider some line balancing to optimize the cycle time closer to the
takt time
• Assuming the demand is fixed and that you cannot move part of Op. A’s work to Op. B
and Op. C, then you must create more available time. This could be increased by adding
another machine, person, or partial/extended shift, for example
The takt time / cycle time chart provides a visual representation of the data that is of utmost
importance to the supervisor, planner, plant manager, and others who have a vested interest in
the cell’s ability to produce what is needed to satisfy your customers.
0
20
40
60
80
100
A B C
Cy
cl
r T
im
e
S
ec
on
ds
Operation
Takt Time / Cycle Time Chart
Takt Time
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Factors Influencing Takt Time
The ingredients in the takt time calculation require decisions to operational matters that are
often addressed in non-disciplined manners. The takt time calculation flushes out these issues
and makes management/leadership input an absolute necessity. As you look at the factors that
influence the takt time, you will take a more disciplined and “scientific” approach to managing
the machine, work cell, or even the overall operation.
Some factors that influence the available time (the numerator in the takt time equation)
include:
• People-paced operation – the number of people. If you add one person for an eight-
hour shift, then the available time increases, which results in takt time increase
• Machine-paced operation – If you pick up four hours from another machine that is
under-utilized, then the available time increases and the takt time increases
• Shift adjustments – Add a shift, and available time increases
• Overlapped work schedules – Change the shift time start and/or end so that you gain
additional clock hours during the workday
Some factors that influence the units of demand (denominator in the takt time calculation)
include:
• Variation in demand pattern during a period – For example, demand might be higher on
Monday and Tuesday before tapering off during the rest of the week
• Seasonal demand differences – Classic example is a company that manufactures lawn
care equipment. This company may have heavy demand in late winter and spring
followed by light demand in late summer and fall
• Specific marketing or sales effort – This effort might artificially cause the demand to
spike during the promotion effort, but might also influence a drop in demand if sales are
artificially pulled forward
• Simply not knowing what the demand will be – This might happen with a new product
launch. There may be differing opinions on the potential demand. Further, there may be
hesitancy to commit to a level of demand for fear of repercussions if wrong
Each of these available time and demand scenarios must be thoroughly considered because any
changes will affect the resulting takt time. You can see that some of the decisions required to
address the available time and demand inputs should have the attention of management and
leadership.
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Optimal Staffing
Once you have the takt time and cycle time information, you can use the optimal staffing
calculation to determine a theoretical staffing level. This is useful in situations where there
might be multiple operations in a cell or where you have multiple stations on an assembly line.
The optimal staffing number provides a target level of staffing to work from.
The calculation is optimal staffing equals the sum of the cycle times divided by the takt time.
You have already either gathered or figured these values as you created the takt time / cycle
time chart. The optimal staffing is an extension of the analysis.
Let’s continue the previous example and assume that the cycle times identified are valid. In this
case, the optimal staffing for the cell is (90 seconds + 50 seconds + 60 seconds) divided by 70
seconds. The result is 2.9 people. This analysis could be useful when setting up a new cell or
relocating an operation. The optimal staffing calculation helps to make the decision objective
rather than subjective.
Example of Takt Time / Cycle Time Analysis
Let’s consider a hypothetical situation. You have an assembly line that has eight assemblers in
the current state operation. You are going to move the line into a new building and have
decided to study the operation and make modifications prior to landing in the new spot.
You have observed the operation and identified several obvious examples of muda (remember
the eight wastes?). Using the lean methods, tools, and techniques you have learned throughout
your lean journey, you reduced the cycle time on several operations by driving out the muda.
As a result, the new cycle times by operation from Operation 1 through Operation 8 are:
OP CT
1 18
2 15
3 20
4 13
Optimal Staffing =
Sum of Cycle Times
Takt Time
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5 14
6 18
7 12
8 17
The demand for this product is consistently 20 units per day. You run a one-shift, eight
hours/shift operation and have 40 minutes of planned downtime (20-minute lunch and two 10-
minute breaks). Therefore, the takt time is 22 minutes/unit (Calculation is 440 minutes/day
divided by 20 units/day.). The results are shown in Chart 2: Example Takt Time / Cycle Time
Chart.
Chart 2:
Example Takt Time / Cycle Time Chart
Observations from the takt time / cycle time chart include:
• Takt time (the red line at 22 minutes) is greater than each of the cycle times. Therefore,
you can meet your customers demand
• The operations are not balanced. The minimum gap between cycle time and takt time
two minutes at Operation 3 and the maximum gap is 10 minutes at Operation 7. The
other cycle times are spread between these two extremes
Now, you are faced with the question about staffing. Do you move the line “as is” with the eight
assemblers, or do you try to optimize by using fewer fully loaded workstations? If you are going
to dun with fewer, then what is the number? Is it four people, six people, or maybe seven
people? This is where optimal staffing can help to set an objective target.
0
5
10
15
20
25
1 2 3 4 5 6 7 8
M
in
ut
es
Assembly Operation
Example Takt Time / Cycle Time Chart
Lean Six Sigma
The inputs to optimal staffing are sum of the cycle times (18 + 15 + 20 + 13 + 14 + 18 + 12 + 17 =
127 minutes). The takt time is 22 minutes. Optimal staffing is 127 minutes / 22 minutes = 5.8
people. In this case, you will round up to six people.
With six people as your optimal staffing target, you will begin to look for ways to combine tasks,
move tasks around, create shared work, or otherwise develop methods to move toward staffing
with six or seven people. Without the takt time /cycle time and optimal staffing analysis, you
may well have simply said (or listened to your production supervisor/manager say) we must
stay at eight people!
Lean Six Sigma
Cellular Design
Terminology
• Water spider: somebody who is supplying material to the cell
o The water spider is actually non-value-add. They are keeping
the value-add employees inside of the cell, adding value at
the highest possible percentage by supplying them with the
material they need
• Work in process (WIP): a type of inventory
o WIP is work in process inventory as well as finished goods
inventory
o A good cellular design minimizes work in process inventory
• Takt time: takt is the German word from taktzeit, or the conductor’s
baton or rhythm
o Takt time is the customer demand rate or the rhythm we need
to produce
• Single piece flow or single unit flow: the concept of having things
always flowing instead of making things in batches
Creating Flow
A good cellular design is all about creating flow, and a good Lean
system will create flow and eliminate waste. An excellent way to create
flow is through a good cellular design. A cellular design is U-shaped, and
the reasons for that are:
• No corners. Corners impede flow, so that is why there are no corners
in a U-shape
• With a U-shape, material can be delivered to, and finished goods can
be picked up from, the same point.
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• The U-shaped cell points toward the aisle where material handlers
can enter. We keep working and add value within the cell
• With a U shape, the space in between equipment can be minimized
by keeping the equipment tightly grouped together, meaning there
will not be a lot of room for inventory
• A U shape means there will be constant motion, so there is no
waiting. Machines will not be waiting, operators will not be waiting,
and inventory will not be waiting
Goals of Good Cellular Design
• The goals of a good cellular design are flow characterized by
continuous motion and zero work between value-add operations
• Single piece flow, not batches
• The goal is to get to a single piece flow from step to step. That
means no waste or waiting
• No operators waiting, no materials waiting, and no inventory
waiting. Minimal transportation and motion waste
• The other advantage that comes with single piece flow is immediate
feedback to the previous operation
• Errors are immediately identified at the next operation, and they are
contained by immediate feedback that says, “Stop, there’s a
problem,” rather than making an entire batch of product and passing
it on to the next operation
• When using cellular design and single piece flow, lead times are
drastically reduced
• Smaller lot sizes are completed and passed on at each step
• Lead times are drastically reduced because all operations are being
done in parallel instead of waiting and doing the entire batch
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• This means we drastically improved productivity
Production Planning & Scheduling
Heijunka is a Japanese term for “leveling.” The concept is used for leveling the rate
of production regardless of fluctuation in demand. It is meant to utilize maximum
plant capacity and to maintain workforce levels. This can lead to stockpiling if
customer demand drops off. So, care must be taken to prevent the waste of
overproduction and inventory. A heijunka box is a visual scheduling tool used in
production.
In traditional scheduling, parts or products are scheduled by day, batches, or lots,
regardless of demand. This results in stockpiling inventory with the expectation of
filling future orders. It takes neither changes in resources nor customer demand
changes into consideration. Notice that specific parts or products are scheduled
exclusively for a specific day. When using leveling, all parts or products are
scheduled for each day, not at just one specific part or product per day. This allows
for rapid adjustment in volumes and changes due to resource constraints, supplier
issues, and customer demand. It allows adjustments that respond better to
customer demand and results in less inventory. This levelling works with
Kanban
and pull systems to support Just-In-Time manufacturing.
Lean Six Sigma
Takt Time and Cycle Time
Takt time is customer demand rate. Here is an example for how to
calculate this.
• If an organization demanded 1,000 units a day and there were
two shifts, each eight hours long, then that would be two times
eight hours times 60 minutes
• However, if each shift took a 20-minute lunch break and two 10-
minute breaks, that means there are 40 minutes in each shift that
are nonproductive, or 80 minutes total
• So, subtract that from the total amount of available time and
divide by a thousand, and that equals 0.88 of a minute, which is
the takt time
• This is the rate at which that organization needs to be producing
to keep up with customer demand. And it is crucial that you never
round up with this number
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Next, plan the cycle time, which should be something slightly faster
than takt time, and that increase in speed depends on how much waste
is in the system. The more waste and unplanned downtime there is, the
faster the planned cycle time needs to be.
Workload Balancing and the Time Observation Form
Workload balancing involves observing the process using a time
observation form. Let’s talk about the steps to workload balancing,
which is the real magic behind cellular design.
1. Watch the process go through a few cycles and record each of
the steps down the left side of the form. Then, across the top,
number 1, 2, 3, 4 for the number of cycles you are going to
watch
2. You want to observe not less than 10 full cycles
3. Observe the process with a running stopwatch, recording the
time at which each step ends
4. Do the math to find out how long each step took. Take the
running time when that step finished and subtract the running
time when the previous step finished. That is the cycle time for
that step for that cycle
5. The goal of this is to get the lowest repeating amount of time
that that step can be done in
6. Then repeat that as part of the standard work
Cycle Time Bar Chart
Organizations use this data to create a cycle time bar chart. Here is an
example. In this scenario, you observed a five-step process, and these
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were the lowest repeating times that were achieved for the five steps:
Step A, 70 seconds; Step B, 25 seconds; Step C, 60 seconds; Step D, 10
seconds; and Step E, 15 seconds. So here are the steps:
1. Create a bar chart with these five steps on it
2. Put a horizontal line at your takt time of 52.8 seconds
3. Put another horizontal line at your planned cycle time, which is 45
seconds
4. To rebalance the workload of the steps, combine steps D and E
into one bar, which would be 25 seconds long
5. Then, rebalance the workload across the remaining four steps, the
ABC and the DE combinations
6. Shift 20 seconds from Step C to the DE combination, take five
seconds from Step B and move it to Step C, and take 25 seconds
from Step A and move it to Step B
7. By doing that, you have rebalanced all of the workload to 45
seconds for each of the four steps
Cross-Functional Teams
When using and designing a good cell, it is important to use cross-
functional teams. In order to rebalance the workload, organizations
need to have employees who are cross-trained and able to
do different jobs, different functions. So, it is critical that value-add
employees from both within and outside the cell are part of designing
the cell.
Kaizen Events
• One method you might use to implement a good cellular design is a
five-day kaizen event
Lean Six Sigma
• It is not the only way to design and implement a cell, but it is
something to consider
Cellular Design in a Service Industry
• Let’s talk about a few examples. We used the manufacturing
example to go through the cycle time bar chart, but what if I worked
in the service industry? Think about health care
o For example, patients must continually flow from step to step
to step
o We want to come in, get treated, and go out the door
• Do not dismiss cellular design just because you are not
manufacturing parts
Conclusion
• Cellular design is characterized by a constant state of flow
• Everything is always in motion. We have eliminated the waste of
waiting for inventory, machines, and people
• The goals of a good cellular design include the elimination of the
waste of waiting, the virtual elimination of work in process
inventory, and the drastic reduction in lead times
Lean Six Sigma
Overall Equipment Effectiveness (OEE)
Introduction
Overall equipment effectiveness (OEE) is a performance measure that
encompasses three elements of flow:
• Availability
• Performance
• Quality
It is a percentage of how much quality product a machine actually
produced divided by the most quality product that equipment is
capable of producing:
OVERALL EQUIPMENT EFFECTIVENESS
Lean Six Sigma
OEE = Number Produced/Number Capable of Being Produced
• OEE can also be applied to work cells and departments as well
as people and manufacturing in the service industry.
Availability = Number of Hours Running/Number of Planned
Hours Running
• Availability is the number of hours the equipment is running
divided by the total number of hours the equipment was
planned to run:
Performance = Equipment Run Rate/MDPR
• While the machine or equipment is running, performance is the
average rate divided by its maximum demonstrated production
rate (MDPR)
• One way to determine an MDPR is to look at a year’s worth of
data and determine which day this machine produced the most
product. Just be sure it is consistent
• Then you lock that in as your MDPR. There are a couple of
different ways to do this, but as long as you are consistent,
then your OEE will be useful
Quality (Yield) = Amount of Good Product/Total Product
Produced
• Quality is the amount of good product divided by total product
produced
Lean Six Sigma
OEE is an important measure in Lean and Six Sigma, because each
element of OEE affects flow:
• Availability stops flow
o If the machine is not running, then product does not
move through it
o This can block upstream suppliers and starve downstream
customers
• Performance slows flow
o If a machine is not running as efficiently as possible, it can
slow the customer down
o There are different ways to calculate. It is important to be
consistent
• Quality reverses flow
o If there is scrap, then you must start all the way over at
the beginning
o If there is rework, you have products or clients that must
move backward in the process
Lean Six Sigma
Example: Credit Card Manufacturer
A credit card manufacturer wants to know what yesterday’s OEE was
for a work cell. The work cell applies the white plastic backing, the
magnetic strip, and a protective coating.
Here is the data associated with this example:
• The coating machine had one hour of unplanned downtime
• The coating machine is the bottleneck, so that is how we will
measure availability
• While the machine was running, it produced 95 cards per minute
• The maximum demonstrated production rate of the machine is
100 parts per minute
Here are how the numbers calculate:
• Availability: one hour of downtime
o 23 hours of runtime/24 hours in a day = 96 percent
• Performance: while the machine was running, it was running at a
rate of 95 cards per minute, and the MDPR is 100 cards per
minute
o 95/100 = 95 percent
• Quality: 128,000 good cards produced that day out of a total of
131,000 cards
o 128,000/131,000 = 98 percent
• Multiply these together to get an overall equipment effectiveness
of 89 percent.
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Losses That Do Not Affect OEE
There are two major losses that do not affect OEE performance:
1. Performance losses due to customer demand
2. Planned downtime for regular maintenance
OEE = 96% X 95% X 98% = 89%
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For example, two hours of planned downtime for a server would be
subtracted from the denominator in the availability calculation. If in the
same day you had .1 hours of unplanned downtime, here is what it
would look like:
• Your availability would be 22 hours minus the .1 hour of
unscheduled downtime for 21.9 hours available.
• Your total hours in a day would not be 24 hours; it would be 24
minus the two hours of planned downtime: 21.9 divided by 22
is a 99.5 percent availability
Six Major OEE Losses
In downtime, there is unplanned downtime, and then there is
downtime due to product changeover.
1. Unplanned downtime is mostly controlled within the organization
or within the department
2. Downtime due to product changeover is a commercial decision
a. If commercial decides to make a new product, operations
needs to satisfy that need
The next two major OEE losses are performance losses:
3. Small downtime
a. Cleaning machines
b. Bathroom breaks
c. Waiting on an upstream or downstream process
4. Reduced performance or reduced speed
a. Old and worn machines
b. Inefficient operators
Two major loss categories within quality are:
5. Rejects due to product changeover
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6. Quality losses during processing. Similar to downtime, we
differentiate these two because one is associated with a
commercial decision – rejects due to product changeover.
Often, when a machine or a department is switched over from
making one product to another, the first hour or so of product is
off-grade or out-of-spec.
a. An example would be the first hour of changing a plan for
making a non-ethanol-based fuel to an ethanol-based fuel
b. The first hundred tons may be off-spec. Quality losses during
processing results in scrap and rework
In Conclusion, you can see how measuring and improving OEE helps
improve flow and the process by improving availability, performance,
and quality. These are the factors that stop, slow, or reverse flow. In
addition, if your organization has the same machines or processes
at multiple locations, OEE is a great way to benchmark performance
and identify best practices between those locations.
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Losses to Overall Equipment Effectiveness
(OEE)
One of the great things about Lean is that the tools are like a project
that has been done a hundred times before, probably more like a
thousand. So, you do not have to reinvent the wheel every time an
issue comes up. If you have lots of motion, use 5S. If you have lots of
transport, use a spaghetti map.
Overall, equipment effectiveness is the same. If you start measuring
OEE and see that it is an issue, then you are already halfway to the
solution because there are basically six root causes of OEE issues:
• Planned downtime, for any reason will impact availability
o Maintenance
o Changeovers
o Breakdowns
• Minor stops will impact performance
o Supervisor questions
o Bathroom breaks
o Any other unscheduled reason
• Speed law
o Poor lubrication (for machines)
o Fatigue (for people, OEE is not just for machines)
• Production rejects
• Start-up waste
o Machines need to warm up or be calibrated before they get
rolling
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• A person can be subject to these same factors as well, especially if
it is a critical function or a highly skilled individual
• Production rejects, another possible root cause of low overall
equipment effectiveness
• Start-up waste – if a machine needs to warm up or be
calibrated before it really gets rolling
Overall, equipment effectiveness is the same for machine or people.
In conclusion, here are a few suggestions to improve OEE:
• Make an Ishikawa diagram, or a fishbone diagram, and label
each of the major stems or bones with those six major
categories of root causes. Then, use it to generate the sources
• When you are working with OEE, those six root causes help you
identify solutions and improve your overall equipment
effectiveness quickly
Lean Six Sigma
Theory of Constraints
Introduction
The concept of “flow” embodies Lean’s focus on reducing waste
and elevating value. In Lean, flow means moving materials,
information, and people through a process as quickly and efficiently
as possible without risking quality, customer satisfaction,
or safety. Tools, such as The Theory of Constraints, help with the
analysis, detection and management of flow. The Theory of Constraints
places emphasis on addressing impediments to flow.
Every process has a weakest, or slowest, link. This weak link could be a:
• Process
• Person
• Machine
• Policy
• Procedure
The Theory of Constraints is a five-step process with the goal of
optimizing a process’ throughput time.
The Goal
The Theory of Constraints is based upon a book by Eli Goldratt called
The Goal. According to Fortune Magazine and Business Week, this book
is one of the most important business books ever written.
• Goldratt’s method identifies the most limiting factor in the flow of
work and focuses the attention of every worker on systematically
removing that constraint
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• Once the constraint is removed, workflow is again analyzed, the
next constraint identified and removed, and the steps are
repeated until the entire process is optimized
• This method achieves a high level of process optimization in a
short period of time because every worker is focused on the
same constraint; time and resources are not wasted on analyzing
steps in the process, which are not problematic.
The steps, known as the Five Focusing Steps, for achieving this goal are
these:
1. Identify: Find the step in the process that is the most significant
impediment to flow. Think about what needs to be changed, how it
should change, and what actions are needed to make the
change. These three questions are called “The Thinking Processes”
2. Exploit: Find any immediate improvements that will improve flow
3. Subordinate and Synchronize: Look at upstream and downstream
processes and align them to help support the improvements
4. Elevate: Re-evaluate the constraint. If it has not moved, conduct
further, in-depth analysis to understand and remove the
bottleneck. Continue until the step is no longer impeding flow.
5. Repeat: Look for the next most significant constraint and once
again apply the five steps.
In conclusion, as with other improvement methods, the Theory of
Constraints offers tools and tips to improve real-time workflow to the
next step. This method achieves a high level of process optimization in
a short period of time because it enlists the efforts of every worker.
Lean Six Sigma
Introduction to Pull Systems
Introduction
The fourth principle of Lean is pull. Pull is responding to a request from
a customer for a product or service (as opposed to pushing products
and services onto them.) It could be an external customer or
an internal customer. Overproduction is when you push more than
people need and sooner than they need it. This can lead to all the other
forms of waste.
This section will go over kanban and other visual management tools
that help to start pulling upon customer requests, rather than pushing
unnecessary products or services. When pull is established, the
customer decides when to receive the next product or service
by pulling what’s needed when it is needed.
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Lean Six Sigma
Scheduling Pull System
Introduction
There are three basic types of pull systems: replenishment pull,
sequential pull, and mixed pull.
• Replenishment pull is a signal used to show that there is a need
for material. This is called a kanban. Kanbans are communication
signals that control inventory levels, while ensuring even
and controlled production flow
• A sequential pull system is when there is an overabundance of
part numbers to hold in inventory. Products are made to order to
minimize inventory. The scheduling department must define the
correct mix and quantity of items in production
• A mixed pull is when a small percentage of part numbers account
for the majority of production volume. Analysis is necessary to
sort part numbers into high, medium, and low orders
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In conclusion, there are three basic types of pull systems:
replenishment pull, sequential pull, and mixed pull. Kanbans are
communication signals that are used to control inventory levels.
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Kanban
Definition
Kanban is a Japanese word that literally means “signboard” or “billboard”. It’s a signal to
act. The term was developed by Taiichi Ohno, the father of Lean in the 1940s. He was
inspired to create the concept while observing grocery stores in the United States. He
noticed that, as people would buy things at the supermarket, the items would be
replenished on the shelves.
Kanban
The wastes that are most affected by kanban are overproduction and inventory.
• Overproduction is virtually eliminated because a kanban system will only allow
production or replenishment of what’s been consumed
• Inventory is minimized because a kanban system will control the amount of work in
process (WIP) inventory
Types of Kanbans
• Replenishment kanban: reacts to a signal sent by the customer
– Indicates that the customer has consumed the product
– Creates an authorization for the supplying process to replace what has been
consumed
• Transportation kanban: authorizes the product to be moved to the next step
– Usually comes from a planner saying that it is time to transport something
– May not be required if the consuming process and the producing process are in
close proximity
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Kanban Signals
• Kanban cards – production units are relatively large
• Kanban bins- products units are small, e.g. nuts, bolts, etc.
• Electronic signal that authorizes action to be taken, e.g. check-out scanners in stores
Rules for Kanban
1. The consuming process takes the number of items that are indicated on the kanban
from the producing process.
2. The producing process makes items only in the quantity and sequence indicated by
the kanban.
3. No items are produced or moved without a kanban. There is no action without the
signal.
4. Always attach a kanban to the product.
5. Never pass defects along. It will distort the count from the kanban.
6. Reducing the number of kanbans increases the sensitivity of that system.
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Lean Six Sigma
Kanban – Establishing A System
Kanban Signals:
• In manufacturing, kanban systems are used to minimize and level
the work-in-process inventories that are on the production floor
o Kanbans signal
that a customer has purchased a product and that
downstream assemblies and materials must be
replenished
o This is also known as “pull”
• Level loading inventories ensure product is at the end of the line
when the customer needs it
o Reducing work-in-process inventory reduces cycle
times and carrying costs
What Is the Material Doing When it’s in Inventory?
• Kanban signals:
o Reduce work-in-process (WIP) inventory reduces cycle times
and carrying costs
o Eliminate the waste, such as waiting
o Result in servicing more clients in less time
• Assumes inventory is where you have created it.
o If inventory is transported, there is even more waste.
o The same is true for
service processes in healthcare, finance, and IT
• Continuously flowing value to the client by load leveling
internal resources reduces waste
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o Pulling WIP when ready for the next step reduces wait times
and allows you to service more clients in less time
Steps to Establishing a Kanban System
There are six steps to establish a kanban system
1. Conduct the Supply Survey, which:
• Lists the make and buy items in your process, given your
industry
• Includes:
o The item numbers
o The description
o The usage rates
o Comments
2. Establish Reorder Quantities and Points
• Reorder quantity = your daily usage × your lead time in days
• Reorder point = reorder quantity + your safety stock
Safety stock can be a percentage of your reorder stock, or it can
be a function of usage variability plus or minus one standard
deviation from the average.
SAFETY STOCK EXAMPLE
• In our previous example, we consumed 21,000 resistors a month,
which roughly equates to 700 per day
• The lead time for a resistor is seven days, and that means it takes
seven days to receive resistors from the factory once we place
the order
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• Therefore, the reorder quantity is 700 resistors per day times
seven days, or 4,900.
• Now, calculate the reorder point, which is the inventory level
where it will trigger a reorder. Remember, the reorder point is
equal to reorder quantity plus some safety stock. Well, we
know the reorder quantity is 4900, so let’s determine our safety
stock.
• Assume we want at least two weeks of resistors in safety stock
because they’re inexpensive and they’re easy to order. Safety
stock is 700 × 14 days or 9,800 resistors.
• The reorder point equals 4,900. That’s
the reorder quantity plus 9,800, our safety stock, or 14,700.
• We don’t count individual resistors, so let’s say 500 resistors per
pack. Round up our reorder quantity to 10 packs in a reorder point
of 30 packs.
3. Create the Supply Order Form
• A supply order form includes:
o Part image
o Part number with descriptions
o Supplier location (internal or external)
o Number of kanban cards in circulation
o Replenish quantity in customer or consumer location
4. Create Kanban Cards
• An example has a picture, the part number with the
description, the supplier location, how many kanbans exist,
replenishment amount, and location(s) of where they are
consumed.
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5. Training
• Elements of good kanban implementation training:
o Include everyone involved in handling the kanban
o Train by doing. Set up a demonstration or Gemba
o Cross-train employees in one upstream and one
downstream process and use kaizen to continuously
eliminate the waste
6. Implementation
• Other factors in good kanban systems are:
o Continuously flowing value
o Minimized inventory
o Elimination of waiting
o Pull instead of push
Conducting a Supply Survey
Following the six steps, conducting supply surveys, establishing reorder
points and quantity, creating a supply
reorder form, creating kanban cards, training the
affected employees, and implementing it will ensure your organization
continually satisfies your customers.
CONCLUSION
We learned that kanban systems reduce work-in-progress
inventory, which improves flow and reduces costs. We also
learned other benefits of implementing a kanban: it reduces inventory,
exposes inefficiencies in the process, and is critical to achieving pull.
Lean Six Sigma
Visual Workplace
Introduction
A visual workplace is a self-ordering, self-explaining, self-regulating, and self-
improving work environment that utilizes visual cues.
Benefits of a Visual Workplace
• Training is simplified
o Because the visual workplace and the work instructions are so
easy to understand, training is simplified and takes less time
• Variation is reduced
o The work is done the same way every time because there
are simple visual instructions and Standard Operating
Procedures
• There is an impact on the 8 WASTES
o Less variation equals less defects
o Less variation and less defects allow processes to be more
predictable, resulting in less over-overproduction.
o Less over-production results in a reduction in waiting
because scheduling is more predictable and customers aren’t
kept waiting
o If there is a diverse workforce and English is not everyone’s
first language, pictures depicting processes will be more easily
understood than text, resulting in less over-production and
defects. The old adage applies – A picture is worth a 1000 words
o Non-utilized talent is reduced because good visual workplace
tools are developed and instructions are written by people who
do the work
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• The well-designed and implemented visual workplace results in less
overproduction. The labor, time, and costs associated
with transportation, inventory, motion, and extra processing are lessened
because of a reduction in errors and rework.
Visual Workplace Examples
•
Tool shadow boards
o Cutouts of where every tool goes so employees can see what is
missing
• Signage that is easy to see and understand
o Process flow directions, exit signs, and fire extinguishers
• Work instructions that are posted right above the working surface
o This could include pictorial work instructions that show what
happens in each step of the process
•
Performance metrics
• Andon: A Japanese term literally translated as “paper lantern”
o In Lean, it’s a signal of manufacturing status.
o It is usually used on pieces of equipment
o It has a green, yellow, or red light, which tells employees the status
of the piece of equipment
• Kanban: A Japanese manufacturing system in which the supply of
components is regulated through the use of an instruction card sent along
the production line
o Kanban can utilize electronic boards and other media.
• Total productive maintenance and tool readiness
o Tools that are ready for use have a green tag on them
o Tools that need work have a red tag on them with instructions
about what needs to be done to them
• Cellular designs
o Job element sheets or visual work instructions abound in a good
cell
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Visual Workplace EXAMPLES
Visual workplace examples
Tool shadow boards
Little cutouts of where every
tool goes so employees can
see what is missing
Performance metrics
Key Performance
Indicators
Work instructions that are
posted right above the
working surface
This could include pictorial
work instructions that show
what happens in each step
of the process
Kanban
Can be cards or empty
tray which is then taken
to be filled
Andon
A signal for how things are
performing
Usually used on pieces of
equipment
Has a green, yellow, or
red light,
which tells employees the
status of the piece of
equipment
Kanban
These can be
cards or empty
tray which are
taken to be filled
Electronic Kanban
Uses technology
to replace
traditional
elements, like
Kanban cards
Provides real-
time information
- Module 5 Topic 1 – Creating Flow
- Module 5 Topic 2 Spaghetti Map
- MODULE 5 TOPIC 3 QUICK CHANGEOVER
- Module 5 Topic 4 Using Takt Time and Cycle Time
- MODULE 5 TOPIC 5 CELLULAR DESIGN
- MODULE 5 TOPIC 6 OVERALL EQUIPMENT EFFECTIVENESS OEE
- MODULE 5 TOPIC 7 LOSSES TO OEE
- MODULE 5 TOPIC 8 THEORY OF CONSTRAINTS
- MODULE 5 TOPIC 9 INTRODUCTION TO PULL SYSTEMS
- MODULE 5 TOPIC 10 SCHEDULING PULL SYSTEMS
- Module 5 Topic 11 Kanban
- MODULE 5 TOPIC 12 KANBAN_ESTABLISHING A SYSTEM
- MODULE 5 TOPIC 13 VISUAL WORKPLACE
Creating Flow
Flow – the Third Lean Principle
Examples of Typical Situations
The Manufacturing Order
Two Kinds of Flow
Slow Down to Speed Up?
Batch and Queue
Introduction
Definition
History
Changeover Time Definition
Importance of SMED
Recognizing the Eight Wastes
Quick Changeover for Non-Manufacturing
Some Operational Questions
Definitions
Factors Influencing Takt Time
Optimal Staffing
Example of Takt Time / Cycle Time Analysis
Cellular Design
Terminology
Creating Flow
Goals of Good Cellular Design
Takt Time and Cycle Time
Workload Balancing and the Time Observation Form
Cycle Time Bar Chart
Cross-Functional Teams
Kaizen Events
Cellular Design in a Service Industry
Conclusion
Overall Equipment Effectiveness (OEE)
Introduction
Example: Credit Card Manufacturer
Losses That Do Not Affect OEE
Six Major OEE Losses
Losses to Overall Equipment Effectiveness (OEE)
Kanban