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Practical Guide to Implement Practical Guide to Implement Continuous Improvement and Continuous Improvement and
Lean Six Sigma TechniquesLean Six Sigma Techniques
Jose Villanueva Alcedo, M.B.A./T.M.Jose Villanueva Alcedo, M.B.A./T.M.
World-Published AuthorWorld-Published Author
CEO, Kaizen.comCEO, Kaizen.com
Practical Guide to Implement Practical Guide to Implement Continuous Improvement and Continuous Improvement and
Lean Six Sigma TechniquesLean Six Sigma Techniques
Part OnePart One Module 1, 2, and 3Module 1, 2, and 3
Jose V. Alcedo, P.E., M.B.A./TM
10/09/12
Module One
YouK aizen.com
Deming’s Philosophy - Third Wave of the Deming’s Philosophy - Third Wave of the Industrial RevolutionIndustrial Revolution
Jose V. Alcedo, P.E., M.B.A./TM
10/09/12
Module One
YouK aizen.com
CONTINUOUS IMPROVEMENTCONTINUOUS IMPROVEMENT
Solid Foundation of 3 Ts
Never-ending improvement
System of Profound KnowledgeSystem of Profound Knowledge Deming 14-Point MethodologyDeming 14-Point Methodology
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Revolutionized the WesternRevolutionized the WesternManagement Methods Management Methods
& Practices& Practices
Appreciation for a System Theory of Knowledge Knowledge of Variation Knowledge of Psychology
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
YouK aizen.com
The success of the whole organization is dependent on the leaders’ capability to orchestrate the delicate balance of each component for the optimization of the entire system
Whole and complex Clearly defined and shared goals Everyone must share a distinct commitment to aim the common
goal Team-based environment Optimize the whole system Win-win result for all, as one team
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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All parts of the system are related
Being part of the whole Large number of participants and interactions Collaboration Interconnecting components Interdependence Optimizing the whole, not one part
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Interdependent parts
Interdependence of all system components
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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All system components must operate interdependently in order to be efficient
in business operation.
Jose V. Alcedo, P.E.,M.B.A./TM
10/02/12
MANUFACTURING PACKAGING DISTRIBUTION
ConsumersConsumers
Consumerresearch
Design & redesign
Suppliers of MaterialsABC
Receipts & test of materials
Test of processes, machines, methods, costs
Module One
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ProductDevelopment
Interdependent processes
Common GoalCommon Goal
Jose V. Alcedo, P.E.,M.B.A./TM
10/02/12
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How we learn things Data-based knowledge Translate knowledge to action
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Variety vs. Variation
Variety is goodVariation is bad
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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•No two things are exactly alike, •not people•not processes
•Processes vary because of its variation•Variation is a natural occurrence•Variation is inherent in life
The Goal of Continuous Improvement is to reduce the range of variation.
Signal of process behaviorSignal of process behavior Process vary due to its variationProcess vary due to its variation Variation is a natural occurrenceVariation is a natural occurrence Identify causes of variationIdentify causes of variation Reduce the range of variation over timeReduce the range of variation over time 85% of variation due to chance 85% of variation due to chance 15% of variation due to assignable causes15% of variation due to assignable causes
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
YouK aizen.com
People’s needsPeople’s needs Intrinsic motivationIntrinsic motivation Hierarchy of needs (Maslow)Hierarchy of needs (Maslow)
Physiological, Safety, Love, Esteem, Self-Physiological, Safety, Love, Esteem, Self-actualizationactualization
Leader’s guidance to see level of needLeader’s guidance to see level of need
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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The hierarchy of needsThe hierarchy of needs
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
Physiological
SafetyLoveLove
Esteem
Self-actualization
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Maslow’s Need TheoryMaslow’s Need Theory
1. Create a constancy of purpose toward improvement of product and service
2. Adopt a new philosophy 3. Cease dependence on inspection to achieve
quality 4. End the practice of awarding business on the basis
of price tag. Instead minimize total cost
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Strategy of creating an environment of trust and teamwork within the organization.
5. Improve constantly and forever, every process for planning, production, and service
6. Institute training on the job 7. Adopt and institute leadership 8. Drive out fears so that everyone may work
effectively for the company
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Strategy of constant unending improvement for everyone
9. Break down barriers between departments 10. Eliminate slogans, exhortations, and targets for the work
force 11. Eliminate work standards (quotas) on the factory floor and
numerical goals for management
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
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Remove the barriersAll in one team, focus on processes,
then improve processes and the results should follow.
12. Remove barriers that rob people of pride of workmanship
13. Institute a vigorous program of education and self-improvement for everyone
14. Put everybody in the company to work to accomplish the transformation
Jose V. Alcedo, P.E., M.B.A./TM
10/02/12
Module One
YouK aizen.com
Jose V. Alcedo, P.E., M.B.A./TM
YouK aizen.com
Jose V. Alcedo, P.E., M.B.A./TM
• Kaizen is a Japanese name
- kai = change, zen = good
• Continuous Improvement Philosophy
Initially taught in U.S.A.
• Deming and Juran -Taught in Japan after World War II
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Jose V. Alcedo, P.E., M.B.A./TM
• Way of thinking applied in all work
• Focuses on continually improving the processes and systems first
• Produce products and services that meet or exceed customer’s satisfaction
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Time
Imp
rove
men
t
$
Jose V. Alcedo, P.E.,M.B.A./TM
Ideal Pattern from Innovation
$
$
Innovation I
Innovation II
Innovation III
(Std)
(Std)
(Std)
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Time
Imp
rove
men
t
$
Jose V. Alcedo, P.E.,M.B.A./TM
Actual Pattern from Innovation
$
$
Innovation II
Innovation III
A
B
C
A,B,C =What should be Std
Innovation I
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Innovation can declineInnovation can decline in performance in performance
with timewith time
Time
Imp
rove
men
t
$
Jose V. Alcedo, P.E.,M.B.A./TM
Innovation plus Kaizen
Innovation I
Innovation II
Kaizen
$
Kaizen
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Fostering Innovation with
Continuous Improvement
Time
Imp
rove
men
t
Jose V. Alcedo, P.E.,M.B.A./TM
Kaizen alone
Kaizen
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IMPROVEMENT
Ongoing Improvement
Jose V. Alcedo, P.E.,M.B.A./TM
SCIENCE TECHNOLOGY DESIGN PRODUCTION DISTRIBUTION
INNOVATION KAIZEN
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Kaizen Innovation
Jose V. Alcedo, P.E.,M.B.A./TM
Gradualist approach Great-leap approach
Small improvement Innovation
Uses seven tools of Quality
No tools
Concerned more with processes
Concerned more with results
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Kaizen Innovation
Jose V. Alcedo, P.E.,M.B.A./TM
Improvement is slow, measures process activities
Measures profit
Close connection between Development, Design and Production
No collaboration among departments
KAIZEN speaks with Data Speaks with intuition, gut feel
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Kaizen Innovation
Jose V. Alcedo, P.E.,M.B.A./TM
People - oriented Innovation – technology, money oriented
Uses structured problem solving PDCA process
No problem solving tools
Covers Design, Production and Distribution
Covers Science, Technology and Design
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Jose V. Alcedo, P.E.,M.B.A./TM
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• SWOT Analysis • Integrate Continuous Improvement into Business Plan• Have short term and long term goals• Core competencies• Identify key processes and resources• Project management time line• Focus on improving Input, Process, Output• Cash Flow projection• Cost Benefit Analysis• Strategic Plan for Sustainability
Strategic Advantage
If your business does not If your business does not have a Business Plan, it can have a Business Plan, it can go somewhere else. go somewhere else.
Jose V. Alcedo, P.E.,M.B.A./TM
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Masaahi Imai (1986) in his book, Kaizen, explained:Key to Japan’s competitive success is Kaizen – Continual Improvement-gradual, unending improvement broken down into:
• Management-oriented Kaizen• Group –oriented Kaizen• Individual-oriented Kaizen
TimeJose V. Alcedo, P.E.,M.B.A./TM
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Goal: College &NFL
Football Runningback Zae ALCEDO #44 - 2nd Year High School Scholar at Campbell Hall, North Hollywood, Calif.
Fostering hisGod-givenTalents withContinuousImprovementTechniquesBy Team Effort with his dad
Milestones
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TBM Consulting Group Inc. (Quality Progress-April 1997)
Survey of Kaizen programs based on four continents, Kuantan, Malaysia, to Sao Paulo, Brazil, to Raunheim, Germany, to Hot Springs, AR.
Survey respondents that practice lean:
• 64% reported lead times on product production• 63% were able to hold down or decrease product pricing• 61% experienced increased market share• 39% reduced the time required to launch new products• 24% were able to increase diversity of their product lines
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
Ford Motor Co. • Increased market share and profit• 65% reduction in customer reported defects• 35% increase in customer satisfaction
Xerox • Manufacturing costs down 20% (1982 – 1986)• Cycle Time reduced by 60%• Revenue produced per employee up 20%
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
Westinghouse Electric Corp/Commercial Nuclear FuelDivision• Increased increased manufacturing by over 37%• Reduced scraps, rework, and manufacturing cycle time
Hewlett Packard (Yokohama)• Profit up 244% from 1977-1984• Hardware failure rates down 79%• Manufacturing costs down 42%• Productivity up 120%• Market share up 19%
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
Boeing Aerospace Co.For the Initial Upper Stage Program:• Billing errors reduced 0%• Cycle time reduced from 20 days to 3• Technical order processing streamlined – saving $875 and 3.75 man-hours per O.T.• For the AWACS contract, billing delinquencies reduced by 50% • Overall Savings: $1.5 million per year
Pittron Steel Foundry• Sales increased by 400%• Profits up by 30%• Productivity up 64%
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
U.S. NavyF-14 Overhaul Program:• Cut average cost from$1.6 million per aircraft in 1986 to $1.2 million in 1989Cherry Point:• Aircraft failure rates reduced by 90% (1987-1988)Overhaul of USS Saratoga:• Expected to save $10 million and 22,000 man-daysNorfolk Naval Shipyard:• Reduced rejection rate in electronic connectors from 55% to 6%
Internal Revenue Service• Processing errors reduced from 30,000 (1986) to 3,000 (1987)
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
U.S. NavyF-14 Overhaul Program:• Cut average cost from$1.6 million per aircraft in 1986 to $1.2 million in 1989Cherry Point:• Aircraft failure rates reduced by 90% (1987-1988)Overhaul of USS Saratoga:• Expected to save $10 million and 22,000 man-daysNorfolk Naval Shipyard:• Reduced rejection rate in electronic connectors from 55% to 6%
Internal Revenue Service• Processing errors reduced from 30,000 (1986) to 3,000 (1987)
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Basic Statistics, Mark J. Kiemele, Stephen R. Schmidt, 1993, Air Academy Press
Huge savings:
Social Security Administration• Claim processing reduced to 73.9 days in 1987 from 81 days in 1986
Department of Housing and Urban Development• Average time to process a loan for property improvement and purchase of manufactured housing was 85 days (1985), 29 days (1986), and 22 days (1987)
Massachusetts General Hospital• Improved the billing process by reducing monthly defects by 52%, resulting in projected $189,000 savings per year
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Huge savings:
9/11/12: “ I was fortunate enough to work with Joe for twenty years. He hasExcellent work ethics and a great set of values. Joe introduced and trainedPharmavite and me on Statistical Process Control, Continuous Improvement,Lean Best Practices and led the charge throughout the company.As an example, on one project, we reduced our lead time by 83%.”William D. Cottrell, CEO/Principal, Cottrell ConsultingSupply Chain and APICS Professional__________________________________________________________________Pharmavite, LLC, California:•Continuous Flow Process reduced manufacturing cycle time by 50%•Reduced inventory count from 7 to 2 days•Statistical Process Control, contract manufacturing from P&G
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Huge savings:Pharmavite, LLC:
• Soft Gelatin Polishing Cycle Time reduction by 60%• Six Sigma tablet weight vitamin savings and excellent product quality• Reduced errors in Batch Reports – resulting to reducing product release time by 40%.• Company-wide Team-based organizational transformation – strategic advantage through High Performance Teams throughout the enterprise, leveraged global market share
Jose V. Alcedo, P.E.,M.B.A./TM
Jose V. Alcedo, P.E., M.B.A./TM
YouK aizen.com
Jose V. Alcedo, P.E., M.B.A./TM
YouK aizen.com
The key strategyThe key strategy Systems approach to changeSystems approach to change Process thinkingProcess thinking Success factorsSuccess factors Focus on the ProcessFocus on the Process Process modelProcess model SIPOC, COPISSIPOC, COPIS Variation in a ProcessVariation in a Process Group paper, oral presentationGroup paper, oral presentation
Deming - based philosophy for maintaining the competitive advantage
Jose V. Alcedo, P.E.,M.B.A./TM
Processes
SystemsPeople
Strategy which focuses on continuous improvement of all
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Jose V. Alcedo, P.E.,M.B.A./TM
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Present state
The Change Process
Transition state
Future state
Allies
Allies
Allies
Allies Allies
Allies
Allies
Why change ?
Sustainability
Considerations:•Visions, Missions, End state•Organizational behavior•Human factors •External influence
Jose V. Alcedo, P.E.,M.B.A./TM
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Goal:A. Integrate Continuous
Improvement Technology Course into CPU Packaging Engineering and Business Administration Curriculum
B. Implement Continuous Improvement in CPU Business Processes
Jose V. Alcedo, P.E.,M.B.A./TM
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Align with goals and reason for being:
Where are we going
What work should we do
How do we get there
Always keep our mission in mind
Jose V. Alcedo, P.E.,M.B.A./TM
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Continuous Improvement (CI) focuses on improving processes involving 4Ms:
•Men (People)
•Machines
•Materials
•Methods
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Have a strategy:•Manage the direction: Focus on consistent direction. •Obtain the buy-in of the process managers and collaborate with them and the people in the whole system with a holistic vision to improve the Process.
Jose V. Alcedo, P.E., M.B.A./TM
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Managing The Change
Like steering a sailboat in turbulent water and stormy winds. If the wind is blowing at gale force dead broadside, you have to make a number of critical choices. The true sailor, knowing these choices works with the wind.
Jose V. Alcedo, P.E.,M.B.A./TM
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Leadership•Committed to satisfying customers
•Increase ability to respond to change
•Develop strategy
•Define roles
•Define goals
•Provide resources
•Lead by example
•Provide training
Jose V. Alcedo, P.E.,M.B.A./TM
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Corporate culture:
•Be obsessed with adding value for the customer
•Support incremental improvement (individual own work, groups, teams)
•Team-based culture transition
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Attitudes:
•Fully accept and internalize the need for CI
•Involvement and pride in CI activities
Jose V. Alcedo, P.E.,M.B.A./TM
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Training:•Establish a training program
•Awareness of employees’ role in CI
•Raise capabilities and empowerment
•Seven basic tools (Flowcharts, Pareto Diagrams, Cause & Effect Diagram, etc.)
•Maximize effectiveness
•Begin at the top and cascade down
Jose V. Alcedo, P.E.,M.B.A./TM
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Planning and Execution:•Select significant improvement opportunities
•Phased step-by-step approach
•Evaluate fine tuning vs. fundamental redesign
•All in one team involvement
•Cross functional
•Multilevel
•Involve the entire system (suppliers and customers)
Jose V. Alcedo, P.E.,M.B.A./TM
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Planning and Execution:
•Coordinate activities
•Project timeline
•Ensure stable processes after each planned change
•Evaluate change benefits
•Make the change permanent
Jose V. Alcedo, P.E.,M.B.A./TM
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Continuous Improvement is to take a hard look at processes and reduce the variation in key business performance, first, before achieving the bottom-line.
Jose V. Alcedo, P.E.,M.B.A./TM
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Improve your process first, by reducing variation, then the results will follow.Competitive Edge –Practical Guide to Implement Continuous Improvementwww.YouKaizen.com
- A blending of inputs to achieve thedesired outputs
Jose V. Alcedo, P.E.,M.B.A./TM
PROCESS
INPUTS OUTPUTS
People
Material
Equipment
Procedures
Service
Product
Task
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Jose V. Alcedo, P.E.,M.B.A./TM
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• SIPOC • COPIS
SSupplier
IInput
PProcess
OOutput
CCustomer
CCustomer
OOutput
PProcess
IInput
SSupplier
- Deming: 94% of the variation is due to chance causes/process which management has control,
6% is due to special causes.
Jose V. Alcedo, P.E.,M.B.A./TM
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Module 3
