1 Continuous Process Improvement

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Continuous Process ImprovementHost Nation Conference

Poiana Brasov, Romania

June 7, 2007

Senior Quality Assurance SpecialistDefense Contract Management Agency



Agenda

Introduction to Continuous Process Improvement(CPI)

Operational Definition

Background

Why Implement CPIOverview of selected tools

Kaizen

Lean

Six Sigma

Innovation

Summary and Take Aways



Introduction Key Points

Having a customer focus as strategic objectiveUnderstanding customers needs and wants

What adds value to customers product or service

Understanding of processesUnderstanding the theory of variation

Knowing the difference between prevention anddetection

Understanding Culture - Creating culture of CPI Applies to all processes

Involves everyone ± team work

Is a on-going continuous effort



Operational Definition

A comprehensive philosophy of operations that is built around the

concept that there are always ways inwhich a process can be improved tobetter meet the needs of the customer and that an organization should

constantly strive to make thoseimprovements.

Source: DoD Continuous Process Improvement Transformation Guidebook

Continuous Process Improvement ²

A comprehensive philosophy of operations

that is built around the concept that there are

always ways in which a process can beimproved to better meet the needs of the

customer and that an organization should

constantly strive to make those

improvements.



Why Implement CPI?

Value added to customer in th ei r t ermsWh at th e Customer i s wi lling to p ay more f or

Can be used f or all ent erp ri se p rocesses - not just man ufact uring

Processes imp rove vari ation i s decreased

Prevention of defect s rath er th an det ection Decrease in cy cle times

Productivit y increases

Increased reli abi lit y

Resource imbalances imp rovedImp roved morale

Assi st s in achi eving st rat egic goals

Lower cost s, increased p rof it an d market sh are



Cost of Quality (CoQ)

As quality increases, Cost Decreases, therefore quality is free.

³Quality is free but it is not a gift. What costs

money are the unquality things- all the actions

that involve not doing jobs right the first time ´

Cost of Poor

Quality

External

failure costs

Internal

failure costs

Prevention

costs

Appraisal

cost

Cost of Good

Quality

Cost of

Quality

Phil Crosby



Engineering Time

Scrap

Cost of Poor Quality The Tip of the Iceberg

Rework

Repair

Decreased Capacity

Decrease in the number units procured

Possible Loss of program

Management Time

Schedule DelaysDecreased

Readiness Levels

Supply Chain Disruption

Field Failures

Adapted from Executive Guide to Lean Six SigmaPhoto: Judith Currelly

Reinspection

Loss of mission Loss of life



History of CPI

From caveat emptor to

And every thing in between

Lean Six Sigma



Eli WhitneyProduct

Standards

ShewhartStatisticalMethods

JuranProcessAnalysis

TaguchiCustomer

Focus

DemingSystemsThinking

Smith(Motorola)

Rigor

Welch BossidyOrganization

Infrastructure

CraftProduction

IndustrialProduction

ScientificManagement

Taylor ±TimeMotionStudies

Womack& Jones

StatisticalProcessControl

QualityControl

QualityEngineering

TQM-TotalQuality

Management

SixSigma

v2

SixSigma v1

OrganizedLabor-

Worker¶sRlights

ToyotaOhnoShingo

Ford-WorkAnalysis

SloanModernManagement

MassProduction

Lean Six

Sigma v1

AssemblyLine Manufacturing

HarryDMAIC

ToyotaProductionSystem

LeanEnterprise

SimplifiedManufacturing

Simplified

Service Process

Cox-ItalianTractor Co.

George & WilsonOptimizedComplexity

Turner Berlin Airlift

SimplifiedProduct

George,LockheedMartin, others

Lean SixSigma v2

Historical Development of TQM,

Six Sigma, Lean Enterprise and

Lean Six Sigma

Source: Lean Six Sigma: Fusion of Pan Pacific Process Upton and



Our Focus Today Our Focus Today

Kaizen Lean Six SigmaKaizen Lean Six Sigma

QFD

FMEA

CPI ± Not Just One Tool or Concept



Overview of tools - Kaizen

Japanese term ± ³Kai´- meaning continuous

³zen´- meaning improvement

Small scale continuous improvements

Incremental steps- addresses single problemRapid intense effort lasting 3-5 days

Known as Kaizen Events, Kaizen Blitz

Kaizen bursts 5-15 minutes in length

DoD Rapid Improvement Event

The Kaizen philosophy assumes that our way of life²be it our working life, our social

life, or our home life deserves to be

constantly improved. Maasaki Imai



Kaizen

Involves those performing the work or directly affected by problem

Team participants

Sponsor- management provides resources,

charter- and most important ownership

5-10 members- including team lead

Wisdom of team versus knowledge of 1

Utilizes Gemba ± go where work isperformed - go and see



Kaizen

Possible applications

Bottle necksDefects

Too many process steps

Excessive handling

Customer dissatisfactionSimple tools- require limited trainingPlan, Do, Check, Act

Process map, data ± check sheets, Pareto

Root cause analysis ± 5 whys

Why did machine fail? Motor burned out Why did the motor burn out? Shaft seized

Why did the shaft seize? No lubrication

Why was there no lubrication? Filter was clogged

Why was the filter clogged? Wrong mesh size ± root cause!



Kaizen

Standardize ImprovementFollow up

Repeat

Chart Source Lockheed Martin



Overview of tools - Lean

Waste - anything that uses resources without providing value to thecustomer

Value added ± Activities that change a product or service in waycustomers view as important and necessary

Non value added NVA- any activity that takes time, material, space, butdoes not add value from the customers perspective

Value stream- Specific activities required to design, order, and providea specific product or piece of information from, concept to launch- order

to delivery into the hands of the customer Value stream map- identification of all the specific activities occurringalong a value stream for a product or product family

³If it doesn't add value it¶s waste´Henry Ford

Source :DoD CPI

It is not uncommon to find 90 to 95% of the time consumed in

a process to be NVA when considering waste in any form



Lean

7 Deadly wastes + 11. Overproduction

2. Waiting

3.Transportation4.Overprocessing

5.Unnecessary inventory

6.Excessive movement7.Production of defects

+ Underutilization of employeesSource :DoD CPI



SUSTAIN

ConsistentlyApplying 6S

Methods In A Uniform

And Disciplined Manner

SORT

Clearly DistinguishNeeded Items FromUnneeded ItemsAnd EliminateThe Latter

STRAIGHTEN

Keep Needed ItemsIn The Correct Place

To Allow ForEasy And

ImmediateRetrieval

SAFETY

IdentifyDanger AndHazard SHINE

Keep TheWorkshop

Swept AndClean

STANDARDIZE

MaintainingEstablishedProcedures

SERI

IDENTIFY/SEPARATE NECESSARY FROM

UNNECESSARY

SEITON

PLACEMENT/IDENTIFICATIONOF NEEDED WORK ITEMS

SEISONMAINTAINING A

CLEAN WORK PLACE

SEIKETSUSTANDARDIZATION

FOR EASE OF USE

SHITSUKE NOTATIONAL METHOD

FOR THE CONFORMANCE

TO RULES

Red tag event

The 5S starts theinvolvement processand teachesstandardization.

Lean - Japanese 5S - Lockheeds 6S

Chart: DAU Bill MotleyCreates visual order, visual control, transparency. (Waste will remain hidden)



Lean - Managing the White Space

Chart source : Lockheed Martin



Tool Overview- Six Sigma

Helps to attain Strategic VisionPhilosophy- reduce variation, make customer focused data driven decisions

Methodology ± structured problem solving

roadmap

Metric (standard of measurement)

Vehicle for:Vehicle for:

Customer focusCustomer focusBreakthrough improvementBreakthrough improvement

Continuous improvementContinuous improvement

People InvolvementPeople Involvement



Lean Six Sigma: A Powerful Methodology

MeasureDefine Improve Analyze Control

What is important tothe customer:

Project SelectionConfirm

understandingw/sponsor

Team Formation

Establish Goal- ROIC

How well we are doing?understand the causes of theproblem:

Est. baseline, process capabilityConstruct Process Flow toobserve process, Collect Data ,

Validate Measurement System

The process:

Analyze Data,

regression analysis,DOE, Identify RootCauses, SupplyChain optimal?DevelopImprovement plan

The process gains:

Ensure solution issustained, documentimproved process, turnresults into $

The process performance measures:

Prioritize root causes

Innovate, pilot solutions

Validate the improvement

D M A I C



Lean Six Sigma - Tools and Techniques

Define Measure Analyze Improve Control

Benchmarking

FMEA

IPO Diagram

Kano¶s Model

Knowledge BasedMgt

Project Charter

SIPOC Model

Quality FunctionDeployment

Voice of Customer Task Appraisal / Task

Summary

Value StreamMapping

ConfidenceIntervals

MeasurementSystem Analysis

Nominal GroupTechnique

Pair wise Ranking

Physical ProcessFlow

Process Capability Analysis

Process FlowDiagram

ProcessObservation

Time Value Map

Value Stream

Mapping

Waste Analysis

Affinity Diagram

Brainstorming

Cause & EffectDiagram

e-test

F-test

Fault Tree Analysis

FMEA

Histogram

Historical Data

AnalysisPareto Chart

Reality Tree

Regression Analysis

Scatter Diagram

t-test

5 Whys

DFSS

DOE

Kanban

Mistake Proofing

PF/CE/CNX/SOP

Standard Work

Takt Time

Theory of

Constraints

Total Productive

MaintenanceVisual Management

Work Cell Design

5S WorkplaceOrganization

Control Charts

Control Plan

Reaction Plan

Run Charts

StandardOperatingProcedures



Customer Focused - Both Internally & Externally

Six Sigma

USLLSL

USL¶LSL¶

USL

T

LSL

USL

T

LSL

Characterize

Optimize

Breakthrough

T

T



Six Sigma Metric3.4 Defects Per Million Opportunities

A very good level of quality - but how good?

Sigma

Level

DPMO

2 308,770

3 66,811

4 6,2105 233

6 3.4

Defect Levels Corresponding to Sigma Levels



Sigma Level Comparisons

Th ree Sigma Quality Level Six Sigma Quality Level

54,000 Incorrect drugprescriptions per year

3 Incorrect drug prescriptionsevery year

40,500 billing errors year 2 billing errors a year

No electricity, water, or heat for2 hours a month

No electricity, water, or heat for1 second every 2 years

Five long or short landings atHeathrow each day

One long or short landing atHeathrow every 10 years

5,400 lost articles of mail perhour

65 lost articles of mail per day

Is 99.73% Good enough

for your organization?

Is 99.999660% Better?



Innovation

Innovation is an integral component of CPIEveryone should be encouraged to:

Be creative

Look for ideas continually

Imagine uncharted territories

Roam around the world in your mind

Visualize situations

Handle multiple variables

Prioritize a combination of variables

Machines, materials, methods, manpower, environment

Never criticize



What do Bono and Tom Cruise hav e in common?

Th ey both look cool wearing sunglassesWhat does t hat have to do wit h t he DoD?Number of eye in juries on t he increase- 16% of casualt ies are att ribut ed to eye in juries

What was root cause? - sand, dust , debris from helicopt ers, smaller shrapnel fragment s?What is typical age of soldier?Issued glasses were too ugly FL seniors should be wearing

Cont ract ed wit h Wiley f or ballist ic eye prot ect ionMore consist ent use- automat ic drop in in juries

Innovation



Innovative solution to critical problem5Whys is an effective tool

Significant reduction in overallInjuries and

Injury severity



What can we learn from NASCAR?

Both ar e ver y efficient in their pit stops- they ar e LEAN

8-14 second s to change 4 t ir es, r eceive fuel, mak e

adjust ment sWhat does that have to do with the DoD?

W e ar e t err ibly in efficient in our d epot and field maint enanc e

Logist ic s foot pr int is huge, Sys. d esign n eed s improved

Innovat ion and CPI

F or mula 1?



UH60 Blackhawk utilizes laminate windshield tear offsSimple solution to tactical problem- sandy, dusty env ironmentReplace Mylar instead of windshield, faster , <$, increased readiness

Terminal High Altitude Area Defense (THAAD) used NASCARsCarlson for Pit stop technology

fewer people with

less training, transparency created, tools reduced from hundreds to16 , rear cable panel mov ed to front panelremov al and replacement of all equipment reduced from ½ day to <½ hour

M1 A1 design focused on ability to directly engage doesnt do wellkeeping engaged. Reduction in maintenance and refueling time keepstank engaged

Pit stop engineering has been adopted by the Army

NASCAR Innovation and CPI

M1A2 being refueled.(Photo by Greg Stewart)



CPI Summary

³Its funny how everything begins to look like anail when the only tool you have is a hammer´

Th

ere are many CPI toolsWe scratched the surfaceTailor tool to your need You must decide what thebest tool is for a particularproblem



Summary Take Aways

Having a customer focus as strategic objectiveUnderstanding customers needs and wants

What adds value to customers product or service

Understanding of processes

Understanding the theory of variation

Knowing the difference between prevention anddetection

Understanding Culture - Creating culture of CPI Applies to all processes

Involves everyone ± team work

Is a on-going continuous effort



Resources

May 2006

American Society for Quality ASQSix Sigma Forum

Lockheed Martin



Continuous Process Improvement

Quest ions?



Resources

CPI Back up Mat erial



CPI

Methods

MFG.

DESIGNEng.

PURCH.

MAINT.

ADMIN.

QA

Marketing



Cellular Manufacturing Flow



Six Sigma

Unlike Kaizen and Lean requires significant

investment, trainingDedicated resources

Time consuming ± 2-6 Mo

Uses sophisticated tools- reliance on

statisticsUsed for toughest problems- not low hangingfruit

Capable of breakthroughs of significant

magnitudeImproves process capability and reducesvariation

Finds the sweet spot in the process operatingwindow



Q W W WWWW

68.26 percent

95.46 percent

99.73 percent

MM74

3 Sigma Process



u-6W u-5W u-4W u-3W u-2W u-1 W s u u+1W u+2Ws u+3W u+4W u+5W u+6W

68.26%

95.44%

99.73%

99.993%

99.999943%

99.999998%

6 Sigma Process



Definition of a Value Stream

TheV

ALUE

STRE

AM is the entire set of processes or activities performedto transform the products and services into what is required by thecustomer.

A P rimary Focus i s TIME,

Product and / or Service Flow

Information Flow: Quickly In All Directions

The VALUE STREAM

S ell Customer sSupplier s M ake reP r ocu reDesign





The Toyota Production System

Just-In-Time³Right part, right amount,

right time´

Jidoka

(In-station quality)³Make Problems Visible´

Leveled Production (heijunka)

Stable and Standardized Processes

Takt time

planning

Continuous flow

Pull system

Quick changeover

Integrated

logistics

Au

tomatic

stops Andon

Person-machine

separation

Error proofing

In-station quality

control

Solve root cause of

problems (5 Why?)

Waste Reduction Genchi Genbutsu

5 Why¶s

Eyes for Waste

Problem Solving

People & Teamwork Selection

Common Goals

Ringi decision making

Cross-trained

Continuous Improvement

Visual Management

Toyota Way Philosophy

Best Quality - Lowest Cost - Shortest Lead Time - Best Safety - High Morale

through shortening the production flow by eliminating waste



Toyot a Motor Manufact uring

MISSION

1. Add value to customers and society

2. As an American company

cont ribut e to t he economicgrowt h of t he community and t he Unit ed St at es

3. As an independent company, cont ribut e to t he st ability and

well-being of t eam members

4. As a Toyot a group company, cont ribut e to t he overall growt h of Toyot a

Ford Motor Company

MISSION

Ford is a worldwide leader in automot ive and automot ive-relat ed

product s and services as well as in newer indust ries such as aerospace, communicat ions, and financial services.

Our mission is to improve cont inuallyour product s and services to meet our

customers needs, allowing us toprosper as a business and to provide a reasonable ret urn to our stockholders, t he owners of our business.





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1 Continuous Process Improvement