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� D efine
M easure
A nalyze
I mprove
C ontrol
OperationalExcellence
By Lee Olson
Presentation to INFORMS
Six Sigma
Six Sigma: DMAIC; Y=f(x)
Is it a Goal, a Measure, a Process, a Tool or an expletive deleted?
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Objectives
� Understand the Basics of the Six Sigma Program
� Understand How Six Sigma Relates to Lean, TOC, TQM
(Theory Of Constraints; Total Quality Management)
� Ability to Define a Strategy and Roadmap for Success
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Define
� Is it a Goal, a Measure, a Process, a Tool or an expletive deleted?
� Yes
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Define
Six Sigma
� Is a management methodology
• Customer focused
• Data driven decisions
• Breakthrough performance gains
• Validated bottom line results
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Customer Focused
Our Performance Compared to Competitors
Importance to Customers
We’re Better They’re Better
High
Moderate-to-’Low’
• Price• Complaints
• OTD• Quality
• Training
• Complete
• Shared Goals
Top 5 Action Items
Driver Action Description Status Status Description Owner
Original Due
Date
Current
Due Date
Late Supplier Deliveries Monthly reporting to suppliers on delivery &
quality metrics.
On
track
Report Cards Implemented. Adam 5/21 5/21
Late Supplier Deliveries Arrange face to face meetings with top
offenders.
On
track
Meetings Complete with top 10
Suppliers.
Beth 6/15 6/15
Late Supplier Deliveries Review and approve supplier's corrective action
plan.
Caution Corrective Action Plan in Place for 2
major Suppliers
Carlos 7/15 9/15
xyz Cell Always Late Kaizen Event to focus on improving throughput
by 40% and improve labor efficiency by 35%
On
track
Event held 5/1. 25% throughput
improvement in May. Labor Efficiency
Increase of 30%
Doreen 5/21 5/21
Unrealistic Promise Date Focus on custom products to provide realistic
ATP based on inventory and leadtime of
components.
Problem Continued lack of progress. Re-
structured and focused team.
Developing detailed plan.
Earnest 6/15 8/15
ON TIME DELIVERY (sample)The percentage of sales order line items that ship complete on or before the original customer promise date, for
all line items shipped in the month.
On-Time Delivery
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Target
Pareto of Drivers
0%
25%
50%
75%
100%
Late
Su
pplie
r
Deliv
eri
es
xy
z C
ell
Alw
ays
Late
Un
realis
tic
Pro
mis
e
Date
Ord
ers
on
Cre
dit H
old
Lo
w Y
ield
on p
art
abc
Eng
ineeri
ng
Cha
nge
Ord
ers
Reason
% Im
pact
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Data Driven Decisions
Why should we test or inspect Y, if we know this relationship?
• Y
• Dependent
• Output
• Effect
• Symptom
• Monitor
• Response
• X1 . . . XN
• Independent
• Input-Process
• Cause
• Problem
• Control
• Factor
To get results, should we focus our behavior on the Y or X ?
f (X)f (X)Y=Y=
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
2 308,5373 66,8074 6,2105 2336 3.4
σσσσσσσσ PPMPPM
Breakthrough performance gains
Sigma is a statistical unit of measure which reflects process
capability. The sigma scale of measure is perfectly correlated to such
characteristics as defects-per-unit, parts-per million defective, and
the probability of a failure/error.
(Distribution Shifted ± 1.5σ)
Process
Capability
Process
CapabilityDefects per Million
Opportunities
Defects per Million
Opportunities
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Validated bottom line results
Price
Incr
easeM
ateri
al Cost
s
Volum
e Inc.
with
Leve
rage
Manufa
cturin
g
SG&
A
Volu
me In
c. N
o Leve
rage
Taxes
LaborW
orkin
g Capita
l
Genera
l-5%
Pri
ce R
eductio
nIm
pa
ct
on
Bo
tto
m L
ine
Assuming a 10% change in the factor
Factors
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Define
Methodology
� Define
� Measure
� Analyze
� Improve
� Control
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Roadmap Example
Next Project DefineCustomers, Value, Problem Statement
Scope, Timeline, Team
Primary/Secondary & OpEx Metrics
Current Value Stream Map
Voice Of Customer (QFD)Measure
Assess specification / Demand
Measurement Capability (Gage R&R)
Correct the measurement system
Process map, Spaghetti, Time obs.
Measure OVs & IVs / Queues
Analyze (and fix the obvious)Root Cause (Pareto, C&E, brainstorm)
Find all KPOVs & KPIVs
FMEA, DOE, critical Xs, VA/NVA
Graphical Analysis, ANOVA
Future Value Stream Map
ImproveOptimize KPOVs & test the KPIVs
Redesign process, set pacemaker
5S, Cell design, MRS
Visual controls
Value Stream Plan
ControlDocument process (WIs, Std Work)
Mistake proof, TT sheet, CI List
Analyze change in metrics
Value Stream Review
Prepare final report
Validate Project $
Validate Project $
Validate Project $
Validate Project $
Celebrate Project $
• Develop a focused Problem Statement and Objective
• Develop a Process Map and/or FMEA• Develop a Current State Map
• Identify the response variable(s) and how to measure them• Analyze measurement system capability• Assess the specification (Is one in place? Is it the right one?)
Practical Problem
ProblemDefinition
• Characterize the response, look at the raw data• Abnormal? Other Clues? Mean or Variance problem?
• Time Observation • Spaghetti Diagram • Takt Time• Future State Maps • Percent Loading
• Standard Work Combination• Use Graphical Analysis, Multi-Vari, ANOVA and basic
statistical tools to identify the likely families of variability
ProblemSolution
• Identify the likely X’s• 5S • Set Up Time Reduction (SMED)• Material Replenishment Systems
• Level Loading / Line Leveling• Cell Design • Visual Controls
• Use Design of Experiments to find the critical few X’s• Move the distribution; Shrink the spread; Confirm the results
Problem Control
• Mistake Proof the process (Poka-Yoke)
• Tolerance the process• Measure the final capability
• Place appropriate process controls on the critical X’s
• Document the effort and results
• Standard Work • TPM
IdentifyProblem
• Strategic Link to Business Plan defined in Project Selection Process• Defined Business Impact with Op Ex Champion support• Structured Brainstorming at all organizational levels
• Cause and Effect Diagrams identifying critical factors• Primary and Secondary Metrics defined and charted
• Multi-Level Pareto Charts to confirm project focus
� What do you want to know?
� How do you want to see what it is that you needto know?
� What type of tool will generate what it is that youneed to see?
� What type of data is required of the selected tool?
� Where can you get the required type of data?
Problem Solving
Plan Execute
Execute PlanCrane Co. Op. Ex. Methodology Originated by MBBs; D. Braasch, J. Davis, R. Duggins, J. O’Callaghan, R. Underwood, I. Wilson
Op
era
tio
nal E
xcellen
ce M
eth
od
olo
gy
Based in part on Six Sigma Methodology developed by GE Medical Systems and Six Sigma Academy, Inc.
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
DefineKey Items
� Customers, Value, Problem Statement
� Scope, Timeline, Team
� Primary/Secondary & OpEx Metrics
� Current Value Stream Map
� Voice Of Customer (QFD)
(Quality Function Deployment)
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Project SelectionImpact
� Business Impact
• Revenue Growth
• Cost Reduction
• Capital Reduction
• Key Business Objectives
• On Time Delivery
• Lead Time
• Quality
• Customer Satisfaction
� Impact on Operational Excellence Metrics
Operational Excellence Training
� D efine
M easure
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I mprove
C ontrol
Evaluate and Rank SuggestionsEffort and Risk
� Effort required
• People Resources
• Capital Resources
• Duration of Project
� Probability of success
• Technical Risk
• Data available
• Knowledge of process
• Management Risk
• Aligned with objectives
• Support by value stream manager
� Impact vs. Risk vs. Effort
• Assess ROI (Return On Investment)
• Assign priorities to projects
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Evaluate and Rank Suggestions
Example tool to rank projects
0106-01 Project Rating.xls
#
Mfg
(M)
or
Admin
(A) Project Description
Re
ve
nu
e G
row
th
Co
st
Re
du
cti
on
Ca
pit
al R
ed
uc
tio
n
Ke
y B
us
ine
ss
Ob
jec
tiv
e
On
Tim
e D
eliv
ery
Le
ad
Tim
e
Qu
alit
y
Cu
sto
me
r
Sa
tis
fac
tio
n
To
tal
Imp
act
Pe
op
le R
es
ou
rce
s
Ca
pit
al R
es
ou
rce
s
Du
rati
on
of
Pro
jec
t
To
tal
Eff
ort
Te
ch
nic
al R
isk
Ma
na
ge
me
nt
Ris
k
To
tal
Ris
k
Variable weightings 20% 15% 10% 15% 20% 5% 5% 10% 100% 50% 20% 30% 100% 40% 60% 100%
1 A Customer Billing Errors 0 2 0 4 4 2 2 5 2.4 2 1 3 2.1 1 4 2.8
2 MWarranty
scrap warranty vs sales0 2 0 1 1 0 3 3 1.1 4 4 5 4.3 4 2 2.8
3 A Vendor Delivery Performance 0 2 2 2 5 4 3 0 2.2 1 1 3 1.6 1 2 1.6
4 M On Time Shipping Performance 2 1 2 4 5 0 1 5 2.9 4 1 2 2.8 1 3 2.2
5 A
Hiring and Retention
20% - 24% Turnover 0 3 0 2 1 0 3 2 1.3 3 2 4 3.1 1 4 2.8
6 ANew Product Development Cycle Time
3 4 2 5 3 3 4 5 3.6 5 3 5 4.6 5 5 5.0
7 MManufacturing Maintenance
Tooling Maintenance0 3 0 1 2 3 1 0 1.2 1 4 1 1.6 1 1 1.0
8 A Day Sales Outstanding (DSO) 0 0 4 2 0 0 0 0 0.7 1 0 2 1.1 1 1 1.0
9 M FTY of 65% on product 123 4 4 2 5 4 4 5 5 4.1 2 1 1 1.5 2 1 1.4
RiskProject Information Impact Effort
Project Ranking
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
1 2 3 4 5
Effort
Imp
act
ProjectNumber
Risk =Ball Size n
Example chart to rank projects 0106-01 Project Rating.xls
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Measure
� Establish measurement capability
• Validate the database (transactional)
• Gage R&R (Repeatability & Reproducibility)
• Calibration is not enough
• Many (or most) measurement systems are not capable
• How good is the data you are using to make decisions?
� Fix the measurement system
• Enables calculation of process capability
• Enables calculation of alpha & beta risks
• This step is often skipped
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Analyze(and fix the obvious)
� Find all KPOVs & KPIVs
(Key Process Output Variables; Key Process Input Variables)
� FMEA, DOE, critical Xs, VA/NVA
(Failure Modes Effects Analysis; Design Of Experiment)
� Graphical Analysis, ANOVA
(Analysis Of Variance)
� Future Value Stream Map
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Improve
� Optimize KPOVs & test the KPIVs
(Key Process Output Variables; Key Process Input Variables)
� Redesign process, set pacemaker
� 5S, Cell design, MRS
(Material Replenishment System)
� Visual controls
� Value Stream Plan
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Control
� Management of Change
• Owned by project champion and value stream manager
• Critical to long term success of project
• Physical and cultural changes
� Measurement controls
• On-going metrics
� Visual Controls
• Enable workers to self-manage the process
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Basic ImplementationRoadmap
Understand and DefineEntire Value Streams
Deploy Key Business Objectives- Measure and target (metrics)
- Align and involve all employees- Develop and motivate
Define, Measure, Analyze, ImproveIdentify root causes, prioritize, eliminate waste,
make things flow and pulled by customers
Control-Sustain Improvement
-Drive Towards Perfection
Identify Customer Requirements
Vision (Strategic Business Plan)
Continuous Improvement (DMAIC)
Identify Customer Requirements
Opera
tion
al E
xcelle
nce T
rain
ing
�D
ef
ine
Me
as
ur
e
An
al
yz
e
Im
pr
ov
e
Co
nt
ro
l
Hoshin
Key:
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port
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Resource
Implement lean concepts in top 3 volume lines
establish pareto of drivers for OTD
IT
Operations
Quality
Engineering
Maintenance
Marketing
Leaders have ability to map a value stream
Metrics module in all appropriate training sequences
Training projects demonstrate flowdown of metics to
operational level
Develop culture of teams
Improve Customer Focus
Educate/Get Everyone Involved
Improve the Metrics
Training
Es
tab
lish
track
ing
of O
TD
in e
very c
ell
Imp
rove
On
Tim
e D
elive
ry to 9
8%
Train workers in how
our products are used by our m
ajor customers
Complete 1 Leadership LGB training course
Trainees participate in customer survey
Complete 3 functional LGB training courses
Bring reps from top 10 customers in for plant tours
100% Completion of LGB Projects
Co
nd
uct in
tervie
ws
with
top
10
cu
sto
me
rs
Tra
in fu
nctio
na
l lea
de
rs a
s L
GB
s
Tra
in le
ad
ers
hip
tea
m a
s L
ea
n G
ree
n B
elts
(LG
B)
Your A
nnual Break
through
Objectives
Your Manager's 1-Year
Breakthrough
Objectives
Indicator's and Goals
Benefits
Top 5 Action Items
Driver Action Description Status Status Description Owner
Original Due
Date
Current
Due Date
Late Supplier Deliveries Monthly reporting to suppliers on delivery &
quality metrics.
On
track
Report Cards Implemented. Adam 5/21 5/21
Late Supplier Deliveries Arrange face to face meetings with top
offenders.
On
track
Meetings Complete with top 10
Suppliers.
Beth 6/15 6/15
Late Supplier Deliveries Review and approve supplier's corrective action
plan.
Caution Corrective Action Plan in Place for 2
major Suppliers
Carlos 7/15 9/15
xyz Cell Always Late Kaizen Event to focus on improving throughput
by 40% and improve labor efficiency by 35%
On
track
Event held 5/1. 25% throughput
improvement in May. Labor Efficiency
Increase of 30%
Doreen 5/21 5/21
Unrealistic Promise Date Focus on custom products to provide realistic
ATP based on inventory and leadtime of
components.
Problem Continued lack of progress. Re-
structured and focused team.
Developing detailed plan.
Earnest 6/15 8/15
ON TIME DELIVERY (sample)The percentage of sales order line items that ship complete on or before the original customer promise date, for
all line items shipped in the month.
On-Time Delivery
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Target
Pareto of Drivers
0%
25%
50%
75%
100%
Late
Supplie
r
Deliv
eries
xyz C
ell
Alw
ays
Late
Unre
alis
tic
Pro
mis
e
Date
Ord
ers
on
Cre
dit H
old
Low
Yie
ld
on p
art
abc
Engin
eering
Change
Ord
ers
Reason
% Im
pact
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Does it work?.
Source: American Customer Satisfaction Index, U Michigan, HBR, 2001
199973 companies
Ralston PurinaQuaker OatsHilton Hotels
Coca-ColaUnilever
etc.
The top companies in Customer Satisfaction grow MVA atnearly twice the rate of their poor-performing counterparts.
$23
$42
0
10
20
30
40
50
Low High
Customer Satisfaction Index Score
Mark
et V
alu
e A
dd
ed
In Billions $
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
What about Lean, TOC, TQM
� Six Sigma
• Remove defects, minimize variance
� Lean
• Remove waste, shorten the flow
� TOC
• Remove and manage constraints
� TQM
• Continuous Improvement
Value Stream Map - Current State
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
Competitive LT = 3 days
Takt Time = 18.2 min
Customer DataOn-Time Delivery
Demand = 45/day
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
Raw = 5 days
WIP = 12.1 days
FG = 6.5 days
Inventory
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
Touch Time = 89 min
Flow of ValueLead Time
Lead Time = 23.6 days
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
CT (67) > Takt Time (18)
ConstraintsOTD, Lead Time
Max Wip = 7.6 days
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
CO = 23 min
CO = Changeover
Setup TimesOP Margin, Lead Time
CO = 1 hour
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
MaintenanceOTD, Lead Time
Uptime = 70%
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
QualityFTY = 67%
Customer
Demand = 45 per day2 shifts
Stamping
342
CT=1sec
Co=1 hr.
Uptime=85%
S. Weld # 1
CT=3 min
Co=10 min.
Uptime=70%
I
I
II
Coils5 days
CT= 15 min
Co=0 min.
Uptime=100%
2 shifts
CT= 67 minCo= 23 min
FTY = 67%2 shifts
ShippingI
I81
202122
Assembly Test
90
1XDaily
90/60/30 dayForecasts
Order Entry
ProductionControl
MRP
6 WEEKForecast
Suppliers Weekly
Fax
WEEKLY SCHEDULELead Time - 34 Days
5 days
1 sec
7.6 days
3 min
1.8 days
15 min
2.7 days
67 min
4.5 days
4 min
2 days
Lead Time =23.6 days
1 shift1 shift
CT= 4 minCo=0
Uptime=100%2 shifts
Competitive Lead Time = 3 Days
Takt Time= 18.2 Minutes
Orders/day= 36
Queue = 1.5 Days
Touch Time = 89 min
What is the pitch time?
Flow of ValueOTD, Lead TimeWho is setting the pace?
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Making it happen
Three major roles
� Implementer• Learns the tools• Works the process• Solves day to day problems
� Manager• Learns the methodology• Manages a value stream• Reviews project teams
� Leader• Establishes the vision for the future• Sets priorities• Encourages
Where do you need to focus?
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
What Is a Sigma?
� A metric that indicates how well a process is performing.
• Higher is better
• Measures the capability of the process to perform defect-free work
• Also known as “z”, it is based on standard deviation for continuous data
• For discrete data it is calculated from DPMO
Operational Excellence Training
� D efine
M easure
A nalyze
I mprove
C ontrol
Units of Measure
The Normal Curve and Capability
LSL USL
Poor Process Capability
Very High Probability of Defects
LSL USL
Excellent Process
Capability
Very Low Probability of Defects
Very High Probability of Defects
Very Low Probability of Defects
Low SigmaLow SigmaHigh SigmaHigh Sigma
Units of MeasureUnits of Measure
µµ
Units of Measure
Performance
Limit Probabilityof a Defect
Area of Yield