By Niraj Goyal
There
are continuing questions about the relationship between Lean Manufacturing and Six
Sigma techniques. This relationship has been expressed as follows:
The case presented clearly demonstrates
this relationship.
This work was carried out in
a large company based in the
The results obtained have
obvious applicability to the back rooms of industries processing large amounts
of data -- IT enabled services, banks, insurance companies, hospitals, and
computer based office processes. They are also applicable to most organizational
processes.
As emphasized in the earlier
work, in the author's opinion and experience, success is a function of
techniques and more importantly a mindset change in the organisation. The
narrative unfolds in the same sequence as the project did pointing out the
critical stages where results were achieved and where mindset changes occurred.
1. Define And
Measure The Problem
1.1) Selection of the problem: A meeting of the senior management of the
company was held and brainstorming session produced a list of over 30 problems.
These were affinitized into two categories:
The realization that the
first category of problems was the one to be attacked (customer focus) came
spontaneously.
Then prioritization was done
to select the most important problem using the weighted voting system followed
by a quick discussion to produce a consensus. The theme (CTQs) selected was
"Consistency of Quality and Timeliness."
The Consistency of Product
Quality was resolved first and a 98% error reduction was achieved.
The project described here
was born out of a chance remark by one of the participants in the group:
"We are going to add new capacity." To my casual query,
"Why?", came the answer: "We need to improve the
turnaround." Immediately I intervened stating that turnaround is not
dependent on capacity. The disbelief that stared back at me was but a
reflection of the mindset prevailing and the task at hand to change it.
A cross-functional team
including the planning personnel, and the key representatives of the operations
from each stage of the process was formed to test the principles of Lean
Manufacturing in practice.
1.2) Definition of the
problem: A second level of brainstorming generated a list of problems which
were affinitized into customer problems and internal problems. The customer
problems were expressed:
The other problems were set aside as they
were causes of the customer problems rather than intrinsic problems themselves.
The Project Charter was then
set out as follows:
Problem = Customer desire - Current state
1.3) Measure the problem: A
suitable data collection check sheet was designed and data was collected two
weeks on the turnaround time of documents to define the problem quantitatively.
The following results were obtained:
Customer Requirement Of
Turnaround Time: <5 days
Current State Average Turnaround: 5 days
sigma: 1 day
3-sigma (99.7%) Delivery To Standard: <8 days
The interpretation of
consistency of delivery (turnaround) using sigma created disbelief at first as
the group struggled to understand the concept. Gradually however it was grasped
-- the problem was not the average turnaround, which was within the customer
limit but the variability. This was the second major mindset change and led to
the definition of the goal: Reduce Turnaround time by 50% so that its
(average + 3 sigma) < 4 days.
2. Analysis of
the Problem
A flowchart was prepared outlining each activity in the process. Many gaps were
revealed that had to be filled up and thought through. Standard times of each
process per batch of 50 pages were tabulated in a specially designed check
sheet. The team was amazed when the time for the value adding steps added up to
only 31 hours. The most important mindset change had begun, asking, "Why
do we take 5-8 days?"
The principles of Lean
Manufacturing and turnaround time reduction were then introduced:
Finding the vital causes:
Data was collected for three batches clocking the timing at each stage and
comparing it to the standard timings to find where time was being lost on a
specially designed data sheet.
With the data it took the
group only a few minutes to draw a Pareto Diagram of delays and conclude three
vital reasons causing 70% of the delay was non-processing (waiting) time due
to:
3. Idea
Generation
The old mindsets were shattered but the group was struggling to understand the
concepts confidently enough to start applying them in regular production. An
experiential simulation classroom exercise in which the group members
participated was designed and carried out to experience the concepts first
hand. Armed with this conviction, the team proceeded to the next step to design
a pilot test.
Planning the Pilot: A
step-by-step implementation plan was drawn up. It was estimated that cutting
inventory and scheduling the production cycle to flow in the current batch
sizes would lead to the achievement of the goal. The whole chain was briefed
about the new method and agreed on a schedule. The team was ready to run the
pilot.
4. Idea
Modification
A pilot batch was run to test the scheme: It took 36 hours. Amazed jubilation
followed by an enthusiastic buy-in of the concepts -- demonstrating my belief
that nothing works better than results in accomplishing mindset change. From
then on it was difficult to restrain the group from pushing ahead too fast.
5.
Implementing The Change
5.1) Scheduling: Production was carried out in a number of parallel lines in a
1-2-1-7-1 configuration. Careful scheduling and planning of the set up was done
to convert each stage to the new mode of running. Training was carried out, and
the conversion begun with data acquisition for further problem solving.
5.2) Implement the change:
After eight weeks of a step-by-step introduction the new schedule was running
and estabilised at all stages. Everyone was pleasantly surprised at the ease of
implementation and learned that involvement of all functions and effective
countermeasure design using data makes implementation of dramatic improvement
easy and quick.
6. Checking
The Result
The turnaround achieved was as follows:
Average Turnaround Time: 3 days
sigma: 0.4 days
Average + 3 sigma: 4.2 days (i.e. < 5 days)
The goal had been achieved!
The Production line
personnel reported tremendous benefits:
Ease of tracking production batches
Increased productivity (over 50%) and therefore reduced costs
Better quality
Ability to handle peaks of input data of up to 75% for 2 days per week
within customer specified turnaround limits
7. Standardization
Of Control
Control charts were introduced and a special presentation on how to draw and
interpret them was made to the line personnel. A Standard Operating Procedure
with a concise reporting format was developed for regular review, management
control and killing of any new causes of variability. The team was left with
the mindset of continuous improvement -- "If you do not improve, you
deteriorate".
Future Action: At the end of
the project when asked what could be achieved in terms of turnaround the team
confidently asserted that they could cut it by half to a 3 sigma performance of
<1.5 days, or more than a six sigma performance for the customer. This was
estimated to yield a further 40% increase in productivity. The mindset
change from the pre project stage was an intangible gain but perhaps the most
important one.
This Project is now in
progress.
Conclusion --
Selling Quality
The combined effect of Lean Manufacturing and Six Sigma has led to improvements
in product quality (98% reduction in errors) and turnaround time (50%
reduction). These improvements have resulted not only in cost reduction, but
also the possibility of presenting these improvement stories to the customer,
building the reputation of the company as a leading supplier of quality, and thereby
increasing the probability of getting higher volumes of bush.