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Lean Six Sigma, Kaizen and Kata for Chemical Engineers AIChE and ABEQ Oct 2016 Lean Six Sigma, Kaizen and Kata for Chemical Engineers Ms. Janet L. Hammill Leadership Career with Dow Chemical, GE Plastics and Alcoa Six Sigma Master Black Belt (6σ MBB) Director, J L Hammill Consulting, [email protected] Agenda Focus Lean Sigma, Kaizen and Kata Getting Started in 2016 Proven Success Take Aways Observation: This Document contains 5 Messages from Mars 2 Message One: Focus At some point, everything's gonna go south on you and you're going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That's all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And if you solve enough problems, you get to come home. 3 World Class Manufacturing Pillars are not just for Manufacturing We are talking about Excellence: You remember Jack Welch’s book Get Better or Get Beaten? and Bill George’s book True North? 4 Business Process Excellence Journey Six Sigma Roadmap (Apply the Pareto Principle: 80/20 Rule) Process Gap Implement Sustain & Benefits Realized Vision Analysis Plan Translate (To Be) Define Measure/Analyze Improve Control (Six Sigma Project) Process Vision Gap Analysis Implementation Plan Sustain & Translate • Vision • Baseline key metrics • Project Plan . Process Performance Reports • Executive Summary • Diagnostic tools . Template . Global Template & ERP • Business Value • Process assessment . Organizational Model . Governance • Project Scope • Data quality report . Business Decisions & Policies . Sharing Mechanisms • Project Tracker • Cause – Effect chart . Electronic invoicing . FMEA for sustaining reduction • Resources engaged • FMEA, risks . Training & education . Control charts • Key Metrics Tracker • Job Aids, Agreements . Root Cause Correct Action . Control audits • High level Process • Troubleshooting guide . Celebrate . Project close and celebration • Collaboration Tools • Critical Success Factor • Quality Functional Deployment 5 Know Your Performance Capability Six Sigma improvement strives for precision and accuracy by reducing the deviation or spread and meeting the target. 6 What is 6 Sigma Quality Performance? To create this chart, all you need is performance measurements (the more the better). Then, you calculate the average and the standard deviation. Sigma is a measure of spread or variation or deviation. Analysis of improvement and process capability is based on this distribution. 7 Why 6 Sigma Quality Performance? 1 Sigma: 470 empty coffee SIGMA % GOOD % BAD DPMO pots at work /year (who didn’t fill the coffee pot, again?) per 1 30.9% 69.1% 691,462 680 opportunities /year. 2 69.1% 30.9% 308,538 2 Sigma: Putting performance of Tiger Woods. He misses 3 93.3% 6.7% 66,807 approximately 1 out of every 3 putts. 4 99.38% .062% 6,210 3 Sigma: 1,970 U.S. flight 5 99.9777% 0.023% 233 cancellations per day 6 99.9997% 0.00034% 3.4 6 Sigma: 10 U.S. flight cancellation per day 8 BPE Journey and Kaizen Roadmap Apply the Fit-for-Purpose, Good Change Principle Lean and Kaizen Process Define Measure Analyze Improve Control Define Product Map the Determine the Streamline Develop System Group and Identify Product and Bottleneck and Process Flow to Meet Tak the Customer Information Process and Eliminate Time and zero Demand Flow Efficiency Waste WIP Benefits Realized 9 Kaizen and Lean Tools and Process Apply the Fit for Purpose Principle 10 BPE Journey and Kata Roadmap Apply the KISS Principle Benefits Realized 11 What Do Six Sigma, Lean / Kaizen and Kata All have in Common? + RIP David Bowie, Jan 1947 to Jan 2016 Benefits + + Realized 12 Excellence Roadmap has Many Faces The Ford Motor Company developed the 8D (8 Disciplines) Problem Solving Process (PSP), and published it in their 1987 manual, "Team Oriented Problem Solving (TOPS)." 13 Long Proven History Six Sigma 14 Long Proven History The Toyota Way (Lean, Kaizen and Kata, plus more) 15 Application and Success using the Toyota Production System (TPS) spans decades 16 Most Relevant is Your History Six Sigma and It’s Precursors in the Rohm and Haas History 17 Message Two: Lean Sigma, Kaizen and Kata In the face of overwhelming odds, I'm left with only one option, I'm gonna have to science the shit out of this. 18 Six Sigma and Voice of the Customer How to Know What to Work on at the Enterprise Level Surveys, interviews and data collection was completed to gather the Voice of the Customer (Chief Finance Officer). He wanted the working capital reduced, including the time to get paid by customers (Days Sales Outstanding). He also told us the factors that define success, the Critical to Quality (and Success Factors) or CTQ’s as shown here in this house of quality. 19 Six Sigma and the Charter How to Know What to Work at the Project Level Problem: Working capital was too high. Goal: Reduce Accounts Receivables. Starting Point: When orders were shipped. Stopping Point: When the payment was verified. Timeframe: 6 months per team. Team: A finance group in a business unit in North America that had completed the IT installation of ERP. Process Importance: Executive level attention. Process problem: Develop full use of new metrics and process and automated business rules. Project Goals: Drove days sales outstanding down by 10 days with a savings of $9 mm. Process Measurements: Delays, daily automated rule override, Error rate, Time to resolve disputes. 20 Six Sigma and SMART Metrics How to Know Your Control and Status Relative to the Goal Moneyball’s Billy Beane: You get on base, we win. You don't, we lose. And I *hate* losing, Chavy. I *hate* it. I hate losing more than I even wanna win. (Quote from the movie Moneyball) Metrics should be defined, gathered and analyzed for each process to gauge the success of process implementation and to provide a basis for improvement. A metric is a standard measure and reported to help manage a process and to assess performance in a particular area. They are a foundation for assessing a process and the basis for any improvement. Metrics need to be consistent and reliable. Note: Bring out the Geek in your MBB and ask about Balanced Scorecard, Critical to Success Factors, Causal Variables, Gauge R&R, Basic Statistics, Graphing, Process Capability, Gaussian and Non-Parametric Distributions, ANOVA, Regression, Statistical Process Control, Simulations, Modelling, Design of Experiments 21 Graph the Metrics to See Progress 22 Six Sigma and Process Map How to Define the Integrated Process Important to the Customer 23 Six Sigma and the Defect How to Know What Goodness Look Like in Inventory Management Key Metrics SCOPE Owner KPIV´S Working Capital, Cost of $MM Supply Director Fix the new Safety Stocks Inventory Weekly Inventory Reports For Business Production Batch Report Consignments Settings New Procedures Follow up the Sales and Forecasting Training to Sales organization System settings Inventory Days Days Finance Fix the safety stocks in Manugistics Reports More communication Slow Moving and $ MM Warehouse Slow Moving Report Overage Provision lead Analysis of the data and RCCA More communication with the whole organization including quality, manufacturing and sales Training Procedures DFC, Days Forward Days Warehouse New report Coverage lead New procedure New Metrics by subfamily Communication Stock out/stock high This table links the performance variables (Key Metrics) with the process variables (Key Input Variables [KPIVs]). Each measureable KPIV has a upper and lower limit or a date when this process variable was changed. Each Key Metric has an upper and lower specification limit. When outside the allowable range, a defect was recorded. 24 Six Sigma Control Chart (Minitab Chart) How to show reduction in slow moving inventory (metric tons) within each of 4 project phases I - M R C h a r t of s l o w mo v i n g p r ov i s i o n b y p h a s e s 1 2 3 4 2,0 e u l a 1,5 1 1 1 V l a u d i 1,0 v i d UCL=0,712 n _ I 0 , 5 X= 0 , 49 3 L C L= 0 , 2 7 4 1 2 3 4 5 6 7 8 9 1 0 1 1 12 1 3 1 4 1 5 Mo nt hs f r o m w h e n w e s t a rt t he p r o j ec t 1 2 3 4 0,8 e g 0,6 n a R g 0,4 n i v UCL=0,2690 o 0,2 M __ M R = 0 ,0 8 2 3 0 , 0 L C L= 0 1 2 3 4 5 6 7 8 9 1 0 1 1 12 1 3 1 4 1 5 O b s e r v a t i o n 25 Kaizen and the A3 Report Out How to Tell the Kaizen Event Story once Completed 26 Kaizen and Value Stream Map (VSM) How to Reveal the Hidden Factory in Fabricating an Aluminum Part 3 Classifications of Activities: Value Add, Non-Value Add & Business Value Add 27 Kaizen Event 4 Phase Structure 28 Planning the Kaizen Event 29 Kaizen Conducting the Event How to Conduct a Kaizen Event 30 Kaizen and 8 Wastes (Muda) How to Know When Cost is NOT adding Value, DOWNTIME 31 Kaizen and the Gemba Walk How to See Opportunities and Successes with Leaders Gemba Walk – When? Timing and frequency is a function of “Who”. VP of Operations – Quarterly Plant Manager – Monthly Manufacturing Director - Weekly Team Leader - Daily Operator Genba (現場 ?, also romanized as gemba) is a Japanese term meaning "the real place." In business, genba refers to the place where value is created; in manufacturing the genba is the factory floor.
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