AIChE and ABEQ Oct 2016

Lean , 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 . 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 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,

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 (Minitab Chart) How to show reduction in slow moving inventory (metric tons) within each of 4 project phases

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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.

32 Kaizen and the ’s How to Know Uncover Risks, Issues and Demonstrate Quality

 Sort: When in doubt, move it out  Set in Order: A place for everything and everything in it’s place  Shine: Clean and inspect or inspect through cleaning  Standardize: Make up the rules, Follow and Enforce them  Sustain: Part of Daily Work and it becomes a habit

33 Before and After a Maintenance 5S event

34 Lean Sigma and the Control Chart How to Measure Sustained Improvement –Batch Run Time

Plotting the performance in Europe and Asia over time (query response time) using Minitab control chart to see the impact of 3 changes (changing naming convention to shorter names, change bandwidth and changing run sequence).

35 Lean Sigma and the C&E Diagram How to Uncover Potential Causes of the Problem

Getting the team together to brainstorm potential causes for every boxed category helps to uncover the primary root causes of the problem (stated in box at right).

36 Lean Sigma and the 5 Why’s How to Uncover Root Causes

37 Lean Sigma and Risk Management How to Uncover and Mitigate Potential Risks

FMEA to define the risk of changing the process and system used to run batch processes within IT

38 Kata

39 Two Katas: Improvement and Coaching

 Improvement Kata  A routine that helps you to improve, adapt and evolve  Coaching Kata  A routine that makes the experienced leaders and managers provide Improvement Kata to everyone

Coaching Improvement Kata Kata

40 Kata and the Coaching Culture

41 Kata: Learning and Engaging in Solutions

42 Kata: an Investment in your People

43 Kata Develops Agile Problem Solvers

44 Kata and the Manager’s Role

What is Management’s Role ?

Traditional Management Toyota Kata Management Focus on the solutions Focus on how solutions are developed  Establish targets  Establish targets  Develop, via practice with  Describe solutions coaches, the capability in  Provide incentives people to develop new solutions…  Get out of the way and  periodically check results By having people practice a common way of working, like the improvement Kata

45 Ten Indicators that Managers Don’t Follow Kata Principles of Productivity and Respect

 Being a Bottleneck  Not Truly Delegating Responsibility  Not Conveying Clear Expectations  Not Giving Useful Feedback  Not Letting People Telecommute When the Work Allows It  No “Concentration” Time  Neglecting Employees Needs for Better Job Performance  Insisting on a Doctor’s Note to Take a Sick Day  Scrimping on Training  Creating a Climate of Fear and Anxiety

46 Message 3: Getting Started Igniting the Journey

Every human being has a basic instinct: to help each other out. If a hiker gets lost in the mountains, people will coordinate a search. If a train crashes, people will line up to give blood. If an earthquake levels a city, people all over the world will send emergency supplies. This is so fundamentally human that it's found in every culture without exception. Yes, there are assholes who just don't care, but they're massively outnumbered by the people who do.

47 Getting Started Continuous Improvement Deployment Steps  Paint the Big Picture  Sponsorship  Focus  Plan the Work  Readiness Assessment  Training and Coaching  Work the Plan  Embed in the Culture

48 Message 4: Proven Success

Improving Annual Report Figures in Working Capital Stopping Price Erosion Reducing Legal Claims Increasing Compliance and Safety

Mars will come to fear my botany powers.

49 Business Process Excellence (BPE) Journey Expected Benefits Realization with ERP % of Respondents with Measurable Results (Note: Based on multiple answers per respondent.)

Inventory Reduction Personnel Reduction Effective Cash Management Revenue/Profit Enhancement IT Cost Reduction Productivity Improvement Procurement Cost Reduction Order Management/Cycle Time Improvement Maintenance Reduction Anticipated Faster Financial Close Cycle Actual Transportation/Logistics Cost Reduction Improved Supplier Management Improved On-Time Delivery Improved Sales & Operations Planning

0 10 20 30 40 50 60

50 Proven Success: Price Erosion

51 Proven Success: HR Leave of Absence Defects

Opportunity: Improvement: Problem: The magnitude of negative earnings can be reduced. A significant cause of negative earnings is expected to be a result of late entries for critical data and updates.

Action: By tracking the late entry corrections, the root causes can be investigated and mitigated. Working closely with HR Operations to ensure training and reminder communications are in progress.

An expected root cause for summertime increases are associated with the need for timely management of interns status.

Impact: Future Opportunities: Next Steps: Benefits: Timely data entry: Entry of critical data is more timely A reduction in negative earnings as a result of late entries is managed (such as departure and return dates from LOA), the primary benefit and with this report it can be managed

monthly. The course of action planned is to ensure training and reminder communications are regularly provided to the appropriate groups (HR representative and analysts and line managers).

52 Proven Success: Compliance and Safety

53 Expected Benefits from a Lean Event

54 Message 5: Take Aways Lessons Learned  Start with a Vision of Process Excellence  Select Projects that Provide Strategic Value  Assign your Best Project Leaders  Monitor with SMART Metrics  Trust the Process – Build Creativity and Drive Change  Expect Sustainable Results  Close the Project and Celebrate  Seek the Next Opportunity for Process Excellence

55 Continuing the Dialog

 What are the compelling drivers in your organization now?  How do you ensure alignment on current state and desired state?  How to gather the Voice of the Customer?  What does it take for you to engage the team?  Why do you leaders need to know change management?  Do your efforts result in value delivery?  When do you improve, how do you know the results are sustained?  What are you going to do to bring Kaizen and Kata into your organization as a result of this roundtable discussion?

56 Thank You

Let's go get our boy.

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