Lean Principles

Lean Principles
Lean Principles
Identify Value from the Customer’s Perspective
i. Specify value in the eyes of the customer:
Identify who is the customer
Identify what the customer values today and
tomorrow
ii. Identify the value and if the customer is willing
to pay for it
Solutions provided at the right place and time
Activities that add no value are waste (muda)
Map the Value Stream

Wherever there is a product for a customer, there is

a value stream. The challenge lies in seeing it” –
“Learning to See” by

Rother & Shook

Create the Flow

The goods or service being produced proceeds from

one step to another without stopping or interruption

Focus areas:
◦ Never lose sight of the object
◦ Ignore boundaries
◦ Rethink and redesign activities that cause rework,
defects, etc
Go with simple flow
Establish Pull

Pull in simple terms means that no upstream process

should produce a good or service until the customer
downstream asks for it

Push vs. Pull System

◦ Case Study: Daily groceries

Push System Pull System

Central decision making Customer drives decision-making
Large batches Emphasis on the smooth flow
Large inventories Inventories kept to a minimum
Demand and Supply are Cooperative production
uncoupled
Seek Perfection

• Perfection is an endless journey – there is always more

waste to attack.
• The culture of continuous improvement needs to be
ingrained into every employee
• Root cause analysis and 5 Whys need to be used to
identify more waste and improve the process

….no picture of perfection can be perfect. Perfection is like

infinity. Trying to envision it (and to get there) is actually
impossible, but the effort to do so provides inspiration and
direction essential to making progress along the path” --
Lean Thinking, James Womack
LEAN PRINCIPLES
8 Wastes

Defects- Re-processing or correcting work

Over Production- Producing more than what the customer needs

Waiting- Employees waiting for another process or a machine

Transport- Moving products from one place to another

Inventory - Building / storing extra services/products the customer has not ordered

Motion- Extra physical/mental motion that doesn’t add value

Extra Processing- Adding excess value when the customer does not require it

Skills- Not using employees’ full intellectual contribution

Defects

What is it?
• Anything that does not meet customer specifications or incomplete

Why is it wasteful?
• Customer dissatisfaction
• Requires additional investments to contain, correct, and resolve
defects
Examples
• Incorrect date code
• Incorrect lot traveler details
• Incorrect stamp
• Wrong vendor number
• System failure – wrong configuration
Over Production

What is it?
• Producing something in more qty or better or sooner than required by
the customer
Why is it wasteful?
• Requires investment without immediate return
• Risk of obsolescence
Examples
• Parts produced that are beyond the production plan and forecast
• Notices are given to participants who didn’t even demand the same
• More than required processes audits planned
• Printing paperwork (that might change) before it is needed
Waiting

What is it?
• Any delay throughout the value stream

Why is it wasteful?
• Invested resources not being utilized to deliver value
• Lengthens overall span of time

Examples
• Succeeding process by waiting for parts to be supplied from the proceeding process
• Waiting for parts to be delivered from the vendor
• Waiting for qualification testing results from the engineering team
Transportation

What is it?
• Too many hand-offs or extra movement of work across value stream

Why is it wasteful?
• Requires additional resource investment to manage (space, equipment, personnel)
• Potential to introduce defects or delays

Examples
• Excessive movement of parts from one area to another
• Manual transport of production parts from the front line to end of line
Inventory

What is it?
• Work waiting in a queue to be processed

Why is it wasteful?
• Requires investment without immediate return
• Hides flow problems within the value stream

Examples
• Overstock of nonmoving raw materials at the storage room
• Unequal utilization within the team, between the team, hours of the day, and
between days of the week
• Inadequate demand forecast
Motion

What is it?
• Movement of body or mind to perform work

Why is it wasteful?
• Consumes available resource time & energy

Examples
• Dragging too many data fields information which can be auto uploaded with a small
macro
• Walking to the copier, printer, fax
• Walking between offices Motion
Extra Processing

What is it?
• More effort than needed

Why is it wasteful?
• Consumes resources, tools & equipment available for value-added actions
• Potential to introduce defects or variation

Examples
• Inspections/Testing not funded by customers
• Unnecessary approvers/reviewers
• Duplicate processes
• Relying on inspections, rather than designing the process to eliminate errors
Skills

What is it?
• Not using employees’ full intellectual contribution

Why is it wasteful?
• Costly allocation of resources
• Consumes available resource time & energy

Examples
• Supervisors doing admin tasks
• Having highly paid staff do routine tasks that don't require their unique expertise
• Not providing the business tools needed to perform and continuously improve
each employee's assigned work
Lean Manufacturing
• Lean Manufacturing is a strategy for achieving significant, continuous improvement
in performance through the elimination of all waste of time and resources in the total
business process

Lean Manufacturing Assessment

11. Preventive Maintenance
1. Cultural Awareness 12. Supplier Partnerships
2. Structured Flow Manufacturing 13. Pull Systems
3. Small Lot Production 14. Education and Training
4. Setup Reduction
5. Fitness For Use
6. Employee Involvement
7. Control Through Visibility
8. Housekeeping/Workplace Organization
9. Total Quality Focus
10. Level Load and Balanced Flow
Lean Manufacturing Assessment
Lean Office Assessment

The Lean Office Assessment contains 12 categories describing attributes of a LEAN

ENTERPRISE.
1. Communication Within The Organization
2. Employee Flexibility
3. Visual Systems and Workplace Organization
4. Continuous Improvement
5. Mistake Proofing (Poka-Yoke)
6. Quality
7. Standard Work
8. Supply Chain
9. Lean Accounting Systems
10.Performance Measurement / Internal
11.Systems Engineering
12.Customer Communication
Lean Office Assessment
What is Six Sigma?

Measurement of Quality ◦ A measure of the number of “defects.” “Six Sigma” implies near perfection at
3.4dpmo (defects per million opportunities)

Process for Continuous Improvement ◦ A quality improvement methodology that applies a

rigorous process to measuring and reducing process variation in the relentless pursuit of
perfection

Enabler for Culture Change ◦ Comprehensive and flexible for achieving, sustaining, and
maximizing business success. Common language - “The way we work”
Value and Foundation of Six Sigma Value and Foundation of Lean

“Six Sigma is a fact-based, data-driven “A systematic approach to identifying

philosophy of improvement that values and eliminating waste (non-value-
defect prevention over defect detection. It added activities) through continuous
drives customer satisfaction and bottom- improvement by flowing the product at
line results by reducing variation and the pull of the customer in pursuit of
waste, thereby promoting a competitive perfection” NIST
advantage. It applies anywhere variation
and waste exist, and every employee
should be involved”
“Lean-Six Sigma is a fact-based, data-driven philosophy of improvement that values defect
prevention over defect detection. It drives customer satisfaction and bottom-line results by
reducing variation, waste, and cycle time, while promoting the use of work standardization
and flow, thereby creating a competitive advantage. It applies anywhere variation and
waste exist, and every employee should be involved.” ASQ BOK SSBB
What is Lean Six Sigma?

It is a combination of the 2 industry concepts:

• Lean
• Six Sigma

Kanban Visual Management Hypothesis Testing

Kaizen 5S ANOVA

SPC Setup Reduction DOE

JIT-Pull Value Stream Mapping Root Cause Analysis

VOICE OF THE CUSTOMER
Focusing on the Customer

Quality and Your Customers “Quality is Types of Customers

that aspect of your product or service that Internal customers
the customer most wants. For this • May include process owners, downstream
reason, your customers know more about processes, other departments, business leaders, etc.
quality than you do. You cannot define it
apart from your customers” - Peter External customers
Drucker May include members, companies, providers,
facilities, regulatory bodies, government agencies, etc.
What do Customers Want

QUALITY
Product or service features, attributes, characteristics relating to the function of the product or service,
reliability, availability, preference, ease of use, effectiveness – also from errors, rework or scrap

COST
Purchase to the customer, on-going costs, financing terms, scheduled increases

DELIVERY
Lead times, delivery time, turnaround time, set-up times, cycle time, delays

Service and Safety

After purchase reliability, compliance, availability, service level agreements, maintainability, requirements
on customers, service liability, appeals, product/service safety

Corporate Responsibility
Ethical business conduct, environmental impact, regulatory and legal compliance
Decisions with Voice of the Customer (VOC)

Without Voice of the Customer: With Voice of the Customer:

i. Conjuncture assumptions are made i. Customer requirements based on
about what customers want/need careful assessments
ii. Processes based on our ii. Processes designed and run to fulfill
convenience/cost customer requirements
iii. Limited efforts at tracking customer iii. iii. Multi-faceted, ongoing “Voice of the
satisfaction customer” effort
iv. Customer-focused data is not iv. Customer-focused data is key to
communicated or used managing the business (short term and
long term)
Knowing the Voice of the Customer (VOC)

Who is your What do they How can we How to provide

customer? NEED? measure? their need?
Voice of the Customer (VOC) Process

Identify the Customer VOC Data Determine CTQ

• Client Sources of VOC data Translate VOC into

• Employees Survey results specific Critical-to
• Stakeholders Interviews quality (CT
• Regulators Conference calls
Targets
Requirements
Customer Complaints
CRITICAL TO QUALITY

A CTQ is a VOC translated into Measurable terms

What do they say? What do they mean? CTQ Measure?

I want all deliveries

“Your delivery was never on Delivery lead-time: =< 2 days
to be within the
time” after final packaging
defined lead time

“You always have defects I want all inspected

parts to be FVI Yield = 99.5% after
after final visual
acceptable at the inspection
inspection”
gate
What is Sigma (σ)?

The meaning of Sigma in Statistics :

Sigma (Greek Letter σ) is a symbol for a measurement called Standard Deviation that
describes the variability of the data from the mean.

The meaning of Sigma in Motorola’s Six Sigma Program :

Sigma is an index for measuring the capability of a process or system to produce “defect-
free” products or operations. a defect is any mistake that results in customer dissatisfaction.
The higher the sigma level, the less likely a process or system will produce defects. As the
process, sigma level increases costs go down and customer satisfaction goes up.
WHAT IS SIX SIGMA?

Sigma is a measure of deviation. The mathematical calculation for the Standard Deviation of a
population is:

By definition the Standard Deviation is the distance

between the Mean and the point of inflection on the
Normal curve.

- Sigma can be used interchangeably with

the statistical term Standard Deviation. -
Standard Deviation is the average distance
of data points away from the Mean in a
distribution.
References:

Greenbelt Certification Training Manual