Lean Six Sigma Black Belt Overview Tutorial

1.2 Overview

Hello and welcome to Lean Six Sigma Black Belt training program offered by Simplilearn. This training program is divided into six sections. Before we start off with this section, get the toolkit downloaded. In the next slide, we will be introduced to the agenda of the first section.

1.3 Agenda

Let us now begin with the first section. It gives us an overview of this entire program and is divided into seven lessons. In Lesson 1, we will learn about Lean Six Sigma Black Belt. In Lesson 2, we will discuss some of the organizational roadblocks. These roadblocks create unnecessary obstacles in the way of successful implementation of a continual improvement project. Lesson 3 will highlight the role of communication for the Black Belts and their selection criteria. Lesson 4 deals with the concept of continuous improvement and continual improvement and their difference. In Lesson 5, we will get an overview of Lean Manufacturing or Lean Management, popularly known as Lean. In Lesson 6, we will deal with some important Lean concepts. Lesson 7explains the usage of some popular Lean tools. Now let us start off with the first lesson of this section.

1.4 Lesson 1 About LSSBB

In this lesson, About LSSBB, we will understand more about Six Sigma and Lean Six Sigma. Let us discuss the agenda of this lesson in the next slide.

1.5 Agenda

In this lesson, we will start with understanding what Six Sigma is, followed by its roles and responsibilities. Then we will discuss what Lean Six Sigma Black Belt is all about. We will conclude the lesson by providing the details of Lean Six Sigma Black Belt’s roles and responsibilities. So now, let us begin this lesson by looking into Six Sigma in the next slide.

1.6 What is Six Sigma

Before we move further, let us first understand Six Sigma. Six Sigma started as a measure of quality and it evolved as the methodology and framework for continuous improvement. Organizations have started looking at Six Sigma as a business philosophy that focuses on continuous improvement. Six Sigma methodologies provide a set of tools and strategies for driving process improvements. There are two major methodologies used in Six Sigma, namely DMAIC (pronounced as D-may-ik) and DMADV (pronounced as "d-mad-vee".) DMAIC methodology is typically used for improvement projects; it stands for Define, Measure, Analyze, Improve, and Control. DMADV methodology is used for new project development; it stands for Define, Measure, Analyze, Design, and Validate. One can use the Six Sigma methodology and the tool set to understand the cause of defects and variation in the manufacturing and business processes; and work towards reducing and eliminating them from the processes. In Six Sigma terminology, a defect is defined as something that is outside the customer specified limit. To achieve Six Sigma level, a process must not produce any more than 3.4 defects per million opportunities. This means that 99.99966% of the products manufactured are statistically expected to be defect-free. In the next slide, we will discuss the roles and responsibilities of Six Sigma.

1.7 Six Sigma Roles and Responsibilities

Now that we have a fair understanding of what Six Sigma is, let us get introduced to various Six Sigma roles and responsibilities in an organization. We will start with the most important role, namely Sponsor. Without the Sponsor, we will not be able to start any Six Sigma project successfully. Typically, it is the senior executive of the organization who sponsors the overall Six Sigma initiative and provides necessary funding. The next role is that of a Champion. This is a mid-level executive who focuses on evangelizing Six Sigma, ensures resources are available and provide them, and resolve any cross-functional issues. Let us now look into the role of Master Black Belt. This is the person who has the highest and in-depth knowledge in Six Sigma. He or she would be an experienced Black Belt with several Six Sigma projects experience. The primary responsibility is to provide coaching, mentoring, and training to Black Belts in the organization. The next role is that of a Black Belt. This is a full-time professional who leads large scale Six Sigma projects. We will discuss this role in detail in the next slide. Next role is Green Belt. This is typically the entry role in Six Sigma. They are either part-time professionals who lead smaller Six Sigma projects or are team members of larger Six Sigma Black Belt projects. Next is Six Sigma’s role as Team Member. Team members are people who bring relevant experience to a particular Six Sigma project. A single Black Belt or Green Belt cannot do the entire project alone; they would always need a full team from various departments and functions. Last but not least is the role of a Process Owner. We should not forget the process owner or the professional who is the owner—responsible and accountable—for the process that we are improving in the Six Sigma project. We will discuss more about LSSBB in the next slide.

1.8 About SSBB

LSSBB stands for Lean Six Sigma Black Belt. The Black Belts are official team leaders of enterprise wide Six Sigma based improvement projects. This is the first difference between Black Belts and Green Belts. The Green Belts are typically authorized to do only unit projects or department level projects. Black Belts form the main interface and communication channel between top management, Master Black Belts, and Six Sigma teams and team members. Lean Six Sigma Black Belts are experienced with advanced statistical tools know-how and can mentor Six Sigma Green Belts in using the right set of tools for completing Six Sigma and Lean projects successfully. Lean Six Sigma Black Belts are expected to complete full-scale enterprise wide projects resulting in aggregate financial benefits worth at least $200,000 yearly to the organization as tangible benefits. However, this financial savings threshold is not really a thumb rule that a Black Belt needs to adhere to. Again, Lean Six Sigma Black Belts are full time roles. That means, these people are dedicated to do large scale enterprise wide projects and they typically do not have any other role or responsibility. In the next slide, we will understand the roles and responsibilities of an LSSBB.

1.9 LSSBB Roles and Responsibilities

An LSSBB (pronounced as L-S-S-B-B) has to ensure that the scoped objective of the Sponsor and Champion is translated to one or more full-scale Lean Six Sigma projects. An LSSBB (pronounced as L-S-S-B-B) is also required to validate and setup necessary measurement systems and KPIs (Key Performance Indicators). Setting up a measurement system often comes under the purview of a DFSS or Design for Six Sigma project. A trained LSSBB may not be able to complete an end-to-end DFSS project for which he or she needs guidance from the Master Black Belt or a DFSS (pronounced as D-F-S-S) expert. However, a Lean Six Sigma Black Belt needs to provide technical expertise to the Green Belts when needed. An LSSBB (pronounced as L-S-S-B-B) must train them. It is here that the fundamental knowledge on the subject of a Black Belt needs to be sound. As a Black Belt, he or she should have completed at least one full scale Black Belt project before commencing the training for Green Belts. A Black Belt should liaise with top management officials and ensure that communication is maintained in a typical Lean Six Sigma top down, i.e., from the top management to the bottom level, approach. One of the primary responsibilities of a Lean Six Sigma Black Belt is to conduct Six Sigma Toll-gate or review meetings with top management and close the project successfully. The Lean Six Sigma Black Belt is expected to report on a regular basis, the status and progress of all the projects to key stakeholders. When the project gets completed, the Six Sigma Black Belt works with finance team and document project results; and share success stories across organization on both process improvements and financial gains. As we have come to the end of this lesson let us look into the main topics that we have discussed in the next slide.

1.10 Summary

In this lesson, we got an overview of Six Sigma and what it means in terms of defects, quality, etc. We covered how organizations have used Six Sigma as a business philosophy to drive continuous improvement. Then we went through each of the key Six Sigma roles in an organization ranging from Sponsor, Champion to the Process Owner, and the Six Sigma team members. We also understood Lean Six Sigma Black Belt, what it is, the types of projects they run, etc. After that, we discussed roles and responsibilities of Lean Six Sigma Black Belt professionals in driving large scale enterprise wide improvement projects.

1.11 Lesson 2 Organizational Roadblocks

This slide introduces us to the second lesson of the first section. In this lesson, we will learn about different organizational roadblocks and why are they so important to consider. We will talk in detail on how to identify each roadblock and how to overcome their challenges. Let us move on to the next slide to discuss the agenda of this lesson.

1.12 Agenda

In this lesson, we will discuss the differences between traditional organization and customer driven organization. We will also cover different types of organizational roadblocks, change resistance curve, common resistance points, and how to overcome those points. Finally, we will explore the topic of force field analysis in detail. The next slide will highlight the difference between a traditional organization and a customer driven organization.

1.13 Traditional Organization versus Customer Driven Organization

A traditional organization plans with a short term focus and has a reactionary management. That means they usually react to problems. Traditional organizations love to measure quick ROI or Return on Investment. They would normally consider their customers to be hostile in their mindset, especially at times of complaints and believe them to be bottlenecks. They typically manage their processes in a way that they end up reducing the errors and defects. A customer-driven organization plans with a long term focus and prefers preventive management. That means, they preempt problems and find solutions to them proactively. Customer-driven organizations love to measure long term ROI or Return on Investment. For this, they ensure high level of customer satisfaction (also called as CSAT (abbreviate) in short form). They usually consider their customers as kings and think that customers deserve respect and would strive to ensure minimal complaints from them. Typically, such organizations manage their processes in a way that they prevent errors and defects. The next slide will give us a glimpse of the organizational roadblocks.

1.14 Types of Organizational Roadblocks

Let us discuss some of the organizational roadblocks that Lean Six Sigma has to face. These roadblocks often prevent most Lean Six Sigma initiatives from taking off. Some common perceptions held against Lean Six Sigma are mentioned below. The first one is that Lean Six Sigma is a Fad. This thought is often expressed by top leadership after hearing the preliminary things about Lean and Six Sigma. We can overcome this obstacle by showing them the benefits of Lean Six Sigma by implementing a small scale pilot project or suggesting an implementation. Lean Six Sigma is too statistical is the second one. This thought is often expressed by top leadership and employees of the organizations after they learn that Six Sigma is a statistical approach. The Black Belt can help in overcoming this resistance by explaining one or two statistical tools. We will continue our discussion on organizational roadblocks in the next slide as well.

1.15 Types of Organizational Roadblocks(Contd.)

Why should one change? This is the next organizational roadblock. The top leadership often asks this question why they should change, especially if they have pioneered their companies for some decades now. They think that Six Sigma will change their work culture and they are averse to change. In such scenarios, a Black Belt needs to explain them how the dynamics for doing business has changed over the years, and cite some examples of companies like KODAK and others. Make them understand that change cannot be evaded and it will help keep the competitiveness of the organization. The employees also express this concern as most of the time they love to stay in their comfort zones. The Black Belt needs to convince them that by changing they would enhance the competitiveness of their company, and upgrade their skills as well. In return, they would also be financially rewarded depending on the policies of the organization. Organizational roadblocks will be discussed further in the next slide as well.

1.16 Types of Organizational Roadblocks(Contd.)

The fourth organizational roadblock is non – cooperation from employees. Sometimes, the employees do not like to cooperate, and show resistance to adapt to new processes. This concern is often expressed due to their fear of admitting mistakes of the past. We can overcome this problem by convincing the employees that they wouldn’t be penalized for their past mistakes. We should also implement the “Move Ahead” philosophy and ensure that the employees are involved in designing and setting up new processes. However, we need to communicate with the employees and ensure that they are convinced not to resist the changes. Again, it is important to ensure that the changes are not forced upon the employees. They should be involved right from the first step. In the next slide, we will look into how wrong team members can lead to an organizational roadblock.

1.17 Types of Organizational Roadblocks(Contd.)

The fifth organizational roadblock is wrong team members. A Six Sigma project will not succeed optimally if there are wrong members in the team. This happens when a team comprises members possessing the same skill-sets. Duplication of thoughts leads to change efforts falling flat. When multiple team members present the same set of thoughts, it will be difficult to find creativity in ideas, as there will be either a lack of creativity or no creativity at all. However, we can overcome this problem by choosing team members based on different skill-sets. We should also choose the team members based on four factors, such as capability, creativity, willingness, and ability. The next slide explores resistance due to fear of measurement.

1.18 Types of Organizational Roadblocks(Contd.)

Fear of measurements is very common in employees. This happens when things get measured and it becomes lot more transparent on who is doing what and its measures. Employees become reluctant to participate and contribute in measurements as their performance will get measured and might get into additional scrutiny. They fear that it may impact their performance reviews. Black Belts can overcome this roadblock by providing confidence to employees saying that the measurement will be used only to improve the process, and not the people. Give them assurance that the data will never be used for performance reviews. Let us move on to another type of roadblock namely, fear of job elimination in the next slide.

1.19 Types of Organizational Roadblocks(Contd.)

One of the biggest fear employees have in an organization is the fear of job elimination. As things get improved, the perception is built that less people will be needed to get the work done and as a result of which people may lose jobs, this results in the fear of job elimination. This fear is very common within team members who are in the early stages of their career. How to overcome this roadblock? Management and Black Belt can provide confidence to employees saying that the improvements will lead to doing more with less; and increase overall business of the organization. Also, provide them details on how improvements will lead to better quality, lower cost, and higher profit. Show them examples on how the improvements will help people to have jobs even in tough times. In the next slide, we will discuss the role of Black Belts in dealing with organizational roadblocks.

1.20 Types of Organizational Roadblocks(Contd.)

Black Belts play an important role in dealing with organizational roadblocks. They help in communicating the change efforts from the top management to all employees. They also ensure that incentive and reward schemes for projects are identified and communicated to top management. They then follow this up with top management, and are communicated back to the employees. Apart from this, Black Belts are responsible for communicating effectively and ensuring transparency amongst team members. Besides, they play an important and neutral role in selecting Six Sigma team. BB: GB (pronounce as BB is to GB) Ratio has to be 1:6(pronounce as 1 is to 6). That means a Black Belt should have a maximum of 6 Green Belts in his span of control. Provide confidence that measurements and improvements are for an organization’s overall good and have aligned it with broader goals. The data collected will not be used to measure performance. These will infuse the necessary confidence in the employees and will reduce the reluctance expressed by them.The next slide gives us a diagrammatic representation of the change resistance curve.

1.21 Change Resistance Curve

Let us first take a look at the Change Resistance Curve. If we have a look at the curve on the slide, we can see that the curve is bell shaped. The left most section of the Bell Curve—colored in red—represents the resistant section. These people always resist change. The right most section—coloured in green—represents the supportive section. These people always support change. The center part represents the neutral section. This section of people has still not decided whether to support or to resist the change. In the next slide, we will discuss this diagram in detail.

1.22 Change Resistance Curve(Contd.)

In the previous slide, a question was asked, “Which area needs focus?” From a change resistance perspective, which section of people do we like to deal with? Let us find out the answer here. Organizations are split into three sections: Fifteen percent who supports change; seventy percent who seems neutral; and another fifteen percent who resist change. This indicates that we should not bother about the fifteen percent which is supportive as it will continue its support. Again, we need not bother about the fifteen percent which resist changes as spending any time with the resistant population will amount to a waste. Start with focusing on the 70% neutral and get them moving with the change. With this, we will be able to get maximum of employees embracing the change. The resistant minority is the most vocal section which opposes any possible change effort. By being vocal, it is able to distract an organization’s management. If the management gets distracted, the seventy percent neutral majority feel that the management wasn’t serious about the change. What happens to the resistors then? We will discuss this in the next slide.

1.23 Change Resistance Curve(Contd.)

As mentioned in the previous slide, we will learn about the resistors here. The fifteen percent supportive population would always support the change effort. If focus is on the seventy percent neutral populace; with some efforts, they can be moved to the supportive section. The 15% resistant population now is in absolute minority with no possibility of neutral folks joining them. When 85 percent of the people are embracing the change and the benefits are seen, the 15% resistant population will slowly start moving to the supportive zone. This is very common behavior observed in the organizations. In most cases, the 15% resistant people move over to support the change effort, fearing isolation. It is important to always work on the 70% neutral category to enable them to overcome change resistance. Don’t worry about the resistors and the supporters. In the coming slide, we will discuss common factors or points of resistance.

1.24 Common Resistance Points

Here are some common points of resistance, which can be found in most organizations: One is to ignore the new process or the change. The thought behind this is to ignore the new process and it will fade away. –It typically happens with teams that are established and have delivered results with earlier process. Second point of resistance is failing to understand. Here the resistors express their inability to comprehend on a regular basis by saying “I don’t comprehend"; making it tough for change efforts to bear fruit. This typically happens with teams that are established. Moderately experienced teams do not do this as they fear that it may backfire.

1.25 Common Resistance Points(Contd.)

We will continue with some other common points of resistance in this slide as well. Next point is to disagree with the validity of the benefits. Here the thought was that by disagreeing, the management can and will re-think on introducing the change. This happens when the benefits, calculations, and projections are not based on commonly accepted standard company practices and norms. If some other methods are used, it might be difficult to convince. Another point is to criticize new set of tools or applications. Here the resistors think that by discussing the challenges and shortcomings of the new tools and the impact on productivity, the management will abandon the new set of tools and revert to the old way of doing things. This happens when the team members have not been involved for identifying the right set of tools and applications for the improvement project. The next point to be discussed is delay the implementation. The resistors think that by delaying implementation, the interest in the change will be reduced and the overall benefits realization will also be delayed. The management might look at this as something that is not working and might decide to pull out of it. This happens when the team members do not want to be vocal about resistance as they fear it may backfire. They adopt this technique of delaying it instead of talking in open and expressing concerns. In the next slide we will see how to overcome these resistance points.

1.26 Overcoming Resistance Points

By involving few employees to create new process can make it very difficult for the people to ignore the new process. With the help of Newsletters, Emails, Check Sheets, One-on-One we can ensure that people understand the change process correctly. This will help eliminate inaccurate understanding. By demonstrating standard measurement, quoting industry benchmarked examples to the employees, and involving them in calculation, we can make them agree with validity of the change efforts. We can introduce feedback looping in the company and discuss this openly in weekly reviews, if people criticize the change efforts like tools and applications. Finally, if there are some employees who are delaying the change implementation, communicate the need for immediate change, and incentivize accordingly.

1.27 Force Field Analysis

The slide here shows the diagrammatic representation of Force Field Analysis. Force Field Analysis is the tool used to map all the resistance and supporting points for the change activity. As we can see from the diagram, the driving forces (green arrows) act from left to right and the restraining forces (brown arrows) present the obstacles to change. When we are mapping force field analysis, we need to put items in GREEN arrow to show driving forces and resisting forces should be denoted by BROWN arrow.

1.28 Force Field Analysis(Contd.)

Force field analysis is explained here in this slide. Force Field Analysis was first conceived by Kurt Lewin. The thought behind Force Field Analysis is “An issue is held in balance by interaction of two opposing sets of forces – those that seek to promote change and those that seek to maintain status quo.” Forces that seek to promote change are known as driving forces. Forces that seek to restrain changes are known as restraining forces. When driving forces are equal to the restraining forces, no changes are possible and a state of equilibrium is maintained. When driving forces are lesser than restraining forces, it leads to negative changes or undesirable changes. When driving forces are greater than restraining forces, changes are accomplished. This is ideally what the state companies would hope for, when having any change effort to deal with.

1.29 Force Field Analysis(Contd.)

In this slide, we will discuss the steps to do Force Field Analysis.The first step is defining the future change. This is done by writing the goal or future state. In the second step namely, Brainstorm the driving forces, we write down factors that are FOR the change. In Brainstorm the restraining forces, which is the third step, we would write down factors that are AGAINST the change. Evaluating the forces will be done as the fourth step, in which the driving and restraining forces are rated on a scale of 1 to 5 (1 being weak and 5 being strong.)We will review the rating in the fifth step and here we would check for flexibility in the forces. The sixth and final step is to strategize and prioritize where we would brainstorm with team on possible counter-action plan. In the next slide we will discuss the limitations of Force Field Analysis.

1.30 Force Field Analysis(Contd.)

Mentioned below are the limitations of Force Field Analysis. One is the amount of subjectivity involved in assigning ratings to driving forces. Another is the concept of Force Field Analysis that is applicable only in limited settings and it not being a universal model. Confusion in assigning one-off force as a responsible factor is also a limitation and the final limitation is the possible chance of a bias. It is important to note that Force Field Analysis is one of the first pre-define tools to be used by an LSS Black Belt. Use the tool, force field analysis template, provided as a word document as part of the toolkit.

1.31 Summary

Here is the summary of what we have learned in this lesson on Organizational Roadblocks. We started with understanding the key differences between traditional and customer driven organization and how it impacts the management, approach, and attitude towards customers. After that, we covered organizational roadblocks in detail to understand various aspects of it and how to handle each of them to have sustainable impact. We discussed Black Belt’s role in overcoming organizational roadblocks. Then we looked at the distribution of people over change resistance curve and how to get people who resist change and move them over to neutral and then supportive. Then we reviewed common resistance points that we can encounter and how to overcome them. And finally, we learned how to do force field analysis and its limitations. We will begin with the next lesson in the next slide.

1.32 Lesson 3 Role of Communication and Selection Criteria in Black Belt

In this lesson, we will look into role of communication in Black Belt and the criteria to be used for the selection.

1.33 Agenda

Here is the agenda of what we are going to cover in this lesson on Role of Communication and Selection Criteria in Black Belt. We will first start with overview of a typical Black Belt role in any organization. Followed by that, we will discuss expectations from Black Belt around communication on regular basis. And then we will talk about what selection criteria can be used for selecting Black Belt for a Six Sigma based improvement project.

1.34 Black Belt Role Summary

In this slide we will understand the role summary of a Black Belt. A Black Belt’s primary role is to help and mentor the Green Belt and Six Sigma teams to deliver successful project. Black Belt needs to handle obstacles and help the team overcome them, so that their main focus of getting the project is done. Black Belts extract knowledge from the organization’s information warehouse and make it available to the project team. A Black Belt is also considered a full time change agent. As a change agent, a Black Belt must be able think and enable changes in their organizations. Black Belt must be trained in the tools and techniques to mentor large improvement projects, and have access to software and hardware resources to make it happen, especially if mandated.

1.35 Black Belt Communication Expectations

In this slide we will see the communication expectations of a Black Belt. A Black Belt must be able to communicate effectively both verbally and written, and in private as well is public. A Black Belt must be able to work proactively and not reactively, and in small settings as well. When a Black Belt must be able to work as a participant, especially in meetings, he or she must also be able to comprehend top management instructions. To be able to translate top management instructions and translate to key doable actions for employees is also expected from a Black Belt. Sending detailed project status report on weekly or fortnightly basis to all the involved stakeholders; and conducting periodic project reviews and toll-gate reviews with executives and providing the updates and taking their feedback also fall under the communication expectations of a Black Belt. It is important to understand that the above mentioned points will help the Black Belts perform their role effectively and have a bigger impact on the project. Without these interpersonal skills, a Black Belt is inefficient in his or her role. While Statistical Ability or ability to deal with numbers is important, it can only take the Black Belt so far. But, without communicating the Black Belt will not be able to make headway in the project.

1.36 Black Belt Selection Criteria

Black Belt Selection Criteria In this slide, we will provide guidance on selection criteria for Black Belt. Black Belts should be selected based on weight grading on the factors mentioned below: 34% overcoming obstacles; 26 % attitude; 13 % logical thought process; 9 % communication skills;8% data interpretation ability; 5 % team handling experience; and 5 % mathematical skills. A degree in Mathematics is not a mandatory requirement for Black Belts. But it is expected that they can understand statistics and get trained in Statistical Software like Minitab and have good analytics skills. As we have come to the end of this lesson let us look into the main topics that we have discussed, in the next slide.

1.37 Summary

We first started with overview of a typical Black Belt role in any organization. Followed by that, we discussed the expectations from Black belt around communication on regular basis. And then we talked about the selection criteria that can be used for selecting Black Belt for a Six Sigma based improvement project. In the next slide we will start with the next lesson, that is, overview of continuous improvement.

1.38 Lesson 4 Overview of Continuous Improvement

Overview of Continuous Improvement In this lesson we will look into a general outline of continuous improvement.

1.39 Agenda

Here is the agenda of what we are going to cover in this lesson on Overview of Continuous Improvement. We will first start with learning what continual improvement process is. Followed by that, we will discuss the differences between continuous versus continual improvement And then at the end, we will cover Kaizen approach for continual improvement.

1.40 Continual Improvement Process

In this slide, we will get an overview of the continual improvement process. Let us now understand some important points about continual improvement, which are as mentioned below. Continual improvement process or CIP is a steady effort made to improve existing processes, products, or services. Sometimes, breakthrough improvement approaches like Kaizen Blitz, or Kaikaku also form a part of CIP approaches. Delivery processes are evaluated against efficiency, effectiveness, and flexibility. According to William Edwards Deming, “CIP is a part of the system, where feedback from the process and the customers are evaluated against organizational goals.” While principle of CIP is feedback, without which CIP efforts are meaningless; purpose of CIP is to identify, reduce, and eliminate below optimal processes. But CIP emphasizes to take gradual and incremental steps.

1.41 Continuous versus Continual Improvement

In this slide we will understand the difference between continuous and continual improvement. Why do we refer to continuous improvement as continual improvement? This question may be lingering in our minds, isn’t it? Here is the answer. The word continuous per English linguistic prescription should be used for things that are continuous in the literal or figurative sense, for example, continuously improving data. The word continuous should be used when events happen continuously at regular intervals. The word continual should be used when events happen in a continuous fashion in discrete jumps. For example, we say continually improving processes. By convention, usage of the word continuous improvement is more popular. Experts and businesses though, have started to use the word continual improvement. It is important to note that it is used as continual improvement of processes and continuous improvement in data trends.

1.42 Kaizen Continual Improvement

This slide discusses Kaizen and it being one of the first fundamental continuous improvement approaches. Most successful implementations use Kaizen as their base approach for Continual Improvement. Now let us understand what kaizen is. The word Kaizen stands for “Change for the Better.” The cycle of Kaizen activities is also known as the PDCA (abbreviate) (Plan Do Check Act Cycle) which helps people organize the work and improvements effectively starting with a Plan of what is going to be done, doing the work, checking if it was done correctly and then taking appropriate action as needed. This is also called as Deming cycle, mentioned first by Dr. William Edwards Deming. Kaizen Blitz or Kaizen Burst is one variant of Kaizen. Kaizen Blitz emphasizes on “rapid or breakthrough” improvement, and it is a focused activity on a particular process. For example, McDonalds inscribing the temperature regulations on their water carrying glasses. Masaaki Imai should be credited for the popularity of Kaizen. Masaaki Imai made the term "Kaizen" famous in his book Kaizen: “The Key to Japan's Competitive Success.” In the next slide, we will discuss the 5 elements of Kaizen.

1.43 Kaizen Continual Improvement(Contd.)

According to the continual improvement process, there are 5 elements of Kaizen, which are as mentioned below: First one is teamwork, which is, bringing everybody together for the common goal. Next is personal discipline. This is paramount to all types of success. Every employee need to have personal discipline in time management, quality assurance, and finances to the company. The third element is improved morale. Organization and employees put in place motivational strategies such as good working conditions, merit promotions, worker benefits, etc., to improve morale of employees. Fourth element is quality circles. It encourages employees to interact with other quality circles; they will have opportunities to share ideas, skills, and other relevant resources. This encourages them to own the improvements. The last element of Kaizen system is suggestions for improvement. It is the provision for the opportunity to express suggestions freely; no matter what the worker’s rank or how absurd the suggestion is, they should be welcomed and considered. The Kaizen cycle of events is as described below: First standardize the operation and activities; then measure the operation. After that compare measurement to requirements and then innovate to meet requirements and increase productivity across the board. Finally, standardize new operations and continue the cycle ad infinitum. That brings us to the end to this lesson on ‘Overview of Continuous or Continual Improvement.’ In the next slide, we will look into the summary of the lesson covered so far.

1.44 Summary

Here is the summary of what we have covered in this lesson on Overview of Continuous Improvement. We started with by understanding what the continual improvement process is. Then we provided details on differences between continuous versus continual improvement. And then at the end, we covered Kaizen approach for continual improvement.

1.45 Lesson 5 Lean An Overview

In Lesson 5, we will provide an overview of Lean, which originated as Lean Manufacturing and these days is popular by the name Lean Management. Lean is based on Toyota Production System methodology to improve process by reducing non-value-adding activities and eliminating waste.

1.46 Agenda

In this lesson titled Lean – An Overview, we will understand what Lean is, along with the history of Lean, principles of Lean, the key benefits of implementing Lean, and why one should implement Lean before Six Sigma. Let us move on to the next slide which discusses Lean.

1.47 What is Lean

So, what is Lean? Lean is a principle of eliminating waste or muda and reducing non-value adding activities. Here, waste is anything that is unnecessary for the process; and non-value adding activity is any activity the customer is not willing to pay for, or one that doesn’t add value to the product. Lean helps in increasing the speed of the product manufacturing process. Remember, achieving continuous flow is one of the biggest benefits of implementing Lean. In the next slide we will learn the history of Lean.

1.48 History of Lean

Let us now see the history of Lean in the chronological order which is as mentioned below. In 1911, Fredrick Winslow Taylor, father of Scientific Management, introduced the concept of standardization. Henry Ford described waste reduction as a key principle of improving efficiency in “My Life and Work” in 1922. Henry Ford was able to reduce manufacturing effort by 60%-90%. Toyota started its first Kaizen processes in 1936; post its vertical-change from textiles to trucks. Toyota Production System started off in 1970s and their pillars—Just in Time and Autonomation— were the first pillars of Lean manufacturing. Coined by John Krafcik, Lean manufacturing comes to the knowledge of the world in 1988. So that was the history of Lean in the chronological order, now let us see the principles of Lean in the next slide.

1.49 Principles of Lean

The principles of Lean are also known as Lean 5. These 5 principles of Lean act as a guide to effective Lean implementation in any organization. Let us now discuss the 5 Lean principles. The first principle is to identify value, which specifies value from customer’s standpoint. The second principle is to map the value stream. This principle identifies all the steps that add value, and eliminate those that don’t add value. The third principle is to create flow. Here value creating steps should occur in a tight sequence. Establish pull, the fourth principle let customers pull from upstream activity. The fifth principle is to seek perfection, according to which, once value streams are identified, waste is eliminated, and Non-Value-Adding (Also called as NVA) activities are reduced; flow will happen and the customers will start pulling. This process is continued until the state of perfection is reached.

1.50 Key Benefits of Implementing Lean

In this slide we will discuss the key benefits of Lean. Key benefits of Lean are summarized below. First is improved customer service. As turnaround time is reduced, customer is able to get things faster. Improved productivity is the next benefit. As processes are becoming more Lean and non-value added activities are getting reduced, whatever work done is directly contributed to the final product and service. Defect and rework reduction, another benefit, leads to better quality products and higher profit margins. The next benefit is waste reduction. Here waste is identified, reduced, and eliminated from the process to make it more efficient Improved flow, this benefit helps in getting the most out of the end-to-end process; and material, parts, and people flow through the system seamlessly. Improved Lead Times is another benefit to get anything done or delivered, leading to increase in business. Reduced levels of inventory, frees up space and capital investments and reduces inventory that gets expired or outdated. This is the last benefit mentioned here. It is important here to have a quick recap on a point made earlier. The most important benefit of Lean is to help achieve Continuous Flow. We will continue with the key benefits in the next slide as well.

1.51 Key Benefits of Implementing Lean(Contd.)

By implementing Lean, Typical Lean project benefits summary is mentioned below. It has been observed that on an average Productivity increases by 25% as more focus is on value add activities. With defects reduction, the scrap levels get reduced by 20%. While focusing on inventory reduction, the Space needed to store the inventory is reduced by 40%. With continuous flow and reduction in rework, the delivery improves by 26%. And finally, due to reduction in inventory levels, the stock turns get improved by 33%.

1.52 Why Lean before Six Sigma

In this slide we will discuss why Lean is necessary before Six Sigma. In Six Sigma circles, it is always recommended by the Black Belt to check for the Lean status of a project before they get to the implementation of Six Sigma. Now let us discuss the reasons why a Black Belt should do so. A Black Belt should always check the process for waste and reduce it before starting the Six Sigma based improvement project. As a Green Belt, he would only have checked for waste. As a Black Belt, he can actually use Lean tools to eliminate or reduce waste. It is important to first reduce or eliminate the waste in the process before taking on activities to reduce variation. Without this, we may not get the full value out of the improvements. It is because reducing variation without eliminating waste will result in the waste hindering with the variation reduction approach. Check the example mentioned below as it illustrates the importance of Lean. Checking the efficiency of an overweight runner running a race of 100 meters is worthless. First, he needs to be Leaned, i.e., all the waste (Extra calories) needs to be removed and then the efficiency needs to be measured. Let us now look into the summary of Lean-Overview.

1.53 Summary

In this lesson, we have learnt that waste is anything unnecessary in a process and non-value adding activities (NVAs) are activities customers aren’t willing to pay for; by implementing Lean we can eliminate waste and reduce NVAs; the 5 Principles of Lean; several key benefits of implementing Lean; and why should we implement Lean before Six Sigma. That brings us to the end of this lesson, in which we have covered the overview of Lean.

1.54 Lesson 6 Lean Concepts Explained

Let us start Lesson 6. In this lesson, we will understand some popular Lean concepts. Please note that all the Lean concepts are not covered in this lesson, as comprehensive Lean coverage is out of the Black Belt body of knowledge. We would though find enough information on Lean in the next two lessons for implementing a Lean project.

1.55 Agenda

The agenda for this lesson includes the following topics: Warusa Kagen (pronounce this as Wah-roosa Kaa-guhn), 3Ms, 8 Waste, Mottainai (pronounced moat-tie-nigh), HOSHIN KANRI (pronounced as h?’ shin kaan-ri), TAKT Time, Cycle Time, Lead Time, Production Cycle Efficiency, Batch Size, Every Part Every Interval (EPEI), EPEI Calculation Spreadsheet, Batch Size – Assignment, Crew Size, and Standardized Work in Progress also known as(SWIP)(abbreviate).

1.56 Warusa Kagen

This slide as well as the next few slides will cover the Japanese concept, Warusa Kagen (pronounce this as Wah-roosa Kaa-guhn). Let us start this concept with a quote from Gemba Panta Rei. The quote says “For the want of a nail the shoe was lost; For the want of a shoe the horse was lost; For the want of a horse the battle was lost; For the failure of battle the kingdom was lost; And all for the want of a horseshoe nail.” Warusa Kagen (Wah-roosa Kaa-guhn) is a condition of badness. It represents small abnormalities that are often undetected and needs a keen management eye to identify the issues. Most issues that we see plaguing a company are directly or indirectly Warusa Kagen issues. It is important to note that Warusa Kagen identifies the gap between how ideal the process should be and how actually it is performing. In the coming slide, we will discuss how to deal with Warusa Kagen and the various Warusa Kagen conditions.

1.57 Warusa Kagen(Contd.)

Wah-roosa Kaa-guhn We can deal with Warusa Kagen (Wah-roosa Kaa-guhn) in the following way. One among them is to demand cleanliness at workplace, and then another one is to have visual controls in place such that any small things, or anomalies can be easily detected and alerted to the operator. We should have respect for people there and should also adhere to standards and work procedures. Sounds simple, isn’t it? Yet when it comes to implementing such things, most organizations fall behind. Muda, Mura, and Muri are the three Warusa Kagen (pronounced as Wah-roosa Kaa-guhn) conditions. Muda represents waste, Mura represents unevenness, and Muri represents overburden. In the next slide we will discuss the 3 Ms.

1.58 3Ms

3Ms In this slide we will discuss the 3 Warusa Kagen conditions or the 3Ms namely Muda, Mura, and Muri. These are the conditions that are reduced or eliminated by the help of Lean. Let us now understand what these conditions represent. First condition, namely Muda, represents wasteful work or work that doesn’t add value to the final product or service as seen from the customer perspective. Second one, Mura, represents unsteady work or work happening irregularly; and third and final condition, Muri, represents inefficient work. Anytime in an organization if someone doesn’t work efficiently, then it is a direct hint that Muri exists at that workplace. It is important to note that TIMWOODS, popularly known as 8 Lean wastes, are different types of Muda.

1.59 8 Types of Waste (TIMWOODS)

In this slide, we will discuss 8 key types of waste, how to identify and eliminate them from the processes. This is popularly known as TIMWOODS. These 8 types of waste are as mentioned below. First waste type is travel. When one has to travel at any time to get something done, then it is a waste due to travel. Second waste is inventory. Keeping excess inventory is another type of waste. The excess inventory will require additional resources for handling, counting, tracking, reporting, and management, thus resulting in additional cost. There will be additional investment for this excess inventory which will result in cash been tied up. We would also need additional storage space or find existing storage space used up. Some of the excess stock might become unusable after a certain time period if it is perishable, or gets expired, obsolete or gets damaged during storage. The third type of waste that we will discuss is motion. Any movement of people, resources, or machines that do not contribute or add value to the product or service is considered motion waste. Next is waiting .Waiting for another process to complete or for someone to provide any details, the time spent waiting is a waste. Over production is another type of waste. If production happens for more than what is needed, it would be considered over-production waste. Similarly there is another waste, known as over-processing. If a product is continued to process more than it needs, it would be considered over-processing waste. Another type of waste is defects. Anytime when there are defects that cause scrap or rework on the product, it is a waste. The last waste type is skills. If there are any unutilized skills in the organization or teams, it is called a waste.

1.60 Mottainai

In this slide, we will understand Mottainai (pronounced moat-tie-nigh). Mottainai (pronounced moat-tie-nigh) is an exclamatory word, which in Japanese means “Oh! What a waste!” This exclamatory word is used with anything that has been identified unnecessarily. Mottainai refers not only to physical wastes, but also wasted as well as wasteful efforts and actions, and more importantly time. Mottainai has very limited practical significance, but underlines TPS’ (T-P-S) or Toyota Production System’s commitment and culture when they identify waste. This word goes to show the culture that has existed in Toyota till date when it comes to the identification of waste. In the next slide we will find a new word to study namely HOSHIN KANRI (pronounced as h?’ shin kaan’ri).

1.61 Hoshin Kanri

HOSHIN KANRI (pronounced as h?’ shin kaan’ri) is a Japanese word, where HOSHIN means shining metal and KANRI means management or control. It is a strategic management technology that has been popularized by Dr. Kaoro Ishikawa. HOSHIN KANRI (pronounced as h?’ shin kaan’ri) helps an organization to do the following. Focus on a shared, long term goal; empower the employees to communicate the goal to the leaders; involve the leaders in planning the goal; and ensure the participants in the goal-setting exercise are accountable for the outcome.

1.62 Hoshin Kanri(Contd.)

This slide summarizes the key steps to do Hoshin Kanri (pronounced as h?’ shin kaan’ri). The steps are as mentioned below. Set or define annual and medium to long term policy; Define the company approach and the quality policy; Convert methodological policy to objective policy; Identify the composition of policy; Identify the type of deployment. It could either be Top down OR bottom-up; Target the deployment; Discussion on how the plan needs to be rolled out; Finalization and rolling out of policy; and Top management internal audit. In the next slide we will discuss the diagram of HOSHIN KANRI.

1.63 Hoshin Kanri(Contd.)

This slide shows a diagrammatic representation of Hoshin Kanri (pronounced as h?’ shin kaan’ri), a powerful Lean planning and management tool. The diagram represents strategic execution linking strategic planning and operational execution. It is an anti-clockwise cycle that starts with box number 1 that says "Develop the Strategy," where the Mission, Values, and Vision are identified, strategic analysis is done, and strategy is formed. The next part of the cycle is "Plan the Strategy," in this, the strategy map and themes are developed followed by setting measures and targets for the group, building an initiative portfolio, and securing funding. After getting the strategy in place, the next step is to “Align the organization,” in this, business units, support units, and employees are aligned around this strategy. Next step in the cycle is “Plan Operations,” where key process improvements are planned along with sales planning, resource capacity plan, and budgeting. Then, get into execution mode and monitor and learn from data. Here strategy reviews and operating reviews are done at a regular basis. The last part of this cycle is to “Test and Adapt,” where, regular analysis is done for profitability, correlation with the strategy is validated and emerging strategies are adapted. With these the cycle completes. As we can see there are several checks and balances in between these phases linking to reviews and plans. In the strategic plan, Strategy Map, Balance scorecard, and Strategy Execution or (stratex) are planned and tracked. The inputs are received from “Plan the Strategy” phase, “Align the Organization” phase and result details are received from “Operating Plan”. It feeds output to “Plan Operations”, shares details to Operating Plan and provides performance measures to “Monitor and Learn” and “Test and Adapt” phases. In the Operating Plan, sales forecast are carried out, resource requirements are identified, dashboards are built, and dashboards and budgets are updated. It receives inputs from “Plan Operations” phase, strategic plan and results details from execution phase. It feeds output to strategic plan and provides performance measures to “Monitor and Learn” phase. In the next slide we will discuss TAKT Time.

1.64 Takt Time

Let us now get introduced to the first of the Lean measurement that deals with time. This is called TAKT Time. Now, let us look into a few more points related to TAKT time. TAKT is an alternative for the German word, TAKTZEIT (Pronounced as Takt-zaayet), which stands for Rhythm of Music. TAKT time is the time available to produce each unit. It is calculated by total time available divided by total units to be produced. TAKT Time also sets the required pace of production, in order to meet the customer demand. TAKT Time is equal to the available time for production divided by customer demand. TAKT time helps in identifying the target of the production line. In the next slide we will understand TAKT time using an example.

1.65 Takt Time(Contd.)

Now, let us understand TAKT time by means of an example. A company works for 8 hours in a day that is 480 minutes out of which break time is 30 minutes and meeting time is 30 minutes, and the customer needs 100 products. What is the TAKT time for the production line? We can calculate TAKT time by following the process mentioned below. First, we need to calculate available production time. Available production time is scheduled time minus break time minus meeting time. In this case, available production time is 480 minutes minus 30 minutes minus 30 minutes. That gives the answer for available production time as 420 minutes. But, here the customer demand is 100 units. Applying the formula as mentioned in the previous slide, the TAKT Time is 4.2 minutes per product. So the interpretation is that the production line needs to manufacture 1 unit every 4.2 minutes. This means that the target for producing one unit or one product is 4.2 minutes and the business must strive to meet the current customer demand. In the next slide we will understand cycle time.

1.66 Cycle Time

Let us now understand what cycle time is. Cycle time is the time when actual work happens in the process. Cycle time is also referred to as processing time. Cycle time is split into four components as mentioned below: First one is auto time, which is the time spent by machines running unattended. Next is manual time, the time spent in loading, unloading, and adding components during the same process. Third one is delay time, which is the time spent waiting for the operator, other process to finish, parts, or raw material availability. Final one is machine time. It is the time spent by machine working on the part. Understanding these four components of cycle time is important, because it tells us how much time did manual staff work on the product, and how much time the machines worked on the product. In an ideal production process, the cycle time must be as close to the TAKT Time as possible. If cycle time is less than TAKT time, then it can result in a possible overproduction and increased inventory levels. This is preferable than cycle time being greater than TAKT time. If cycle time is greater than TAKT time then the production line fails to meet the customer demand. This means that customers may have to wait for their products to be delivered.

1.67 Lead Time

In this slide let us understand what Lead Time is. Lead Time is the time between customer order and delivery of the product. For example, delivery of most pizzas from Domino’s Pizza is 30 minutes. 30 minutes here is the expected Lead Time set by Domino’s Pizza for its customers. Small order of preexisting items will have a lead time of few hours due to operational push and pull mechanism. This means, a push and pull mechanism is considered ideal for most businesses. Larger orders or custom makes will have lead times in weeks or months. For example, a custom made car ordered to make will take at least 6 months to deliver. This is typically in case of a pull process where the company starts manufacturing once it receives customer demand. Reducing lead time should be the target, but to do so, we should reduce cycle time, setup time, and wait time. Lead time will automatically get impacted with a reduction in all these times. In the next slide we will discuss an assignment, calculating the Lead Time.

1.68 Lead Time Assignment

Let us understand how lead time is calculated with the help of a problem. A customer orders a product on 26th February to the company. The company starts work on 28th February, and completes it by 29th February. It ships the product on 02nd March and the product reaches customer on 5th March. From this, we will have to find out the cycle time, throughput time, and the lead time. In the next slide, we will understand how to find the above mentioned times.

1.69 Lead Time Assignment(Contd.)

The problem for the assignment has been given in the previous slide. Before beginning with the problem, note down all the figures and dates as mentioned in the previous slide. Let us first calculate cycle time. The cycle time is 2 days assuming there was no setup time and idle time on 28th and 29th of February. The throughput time is 3 days assuming raw materials are assembled on the 27th February; throughput time is the time taken to convert raw materials to finished goods. Do you see how throughput time is different from cycle time? The lead time is 9 days. The customer ordered the product on 26th February and received the product on 5th March. Now let us check out the interpretation of the findings. In this problem, the TAKT time has not been given. Had it been given and if cycle time was greater than TAKT time, the customer would have had to wait longer for his product. Product should have been shipped on the 29th February. Why did it get shipped as late as 2nd March? Why did the delay happen? A Black Belt is supposed to ask all these questions and work on the remedial measures.

1.70 Production Cycle Efficiency

In this slide, let us understand the concept of production cycle efficiency, also known as process cycle efficiency or PCE. PCE is given by the formula, value added time divided by total time multiplied by 100 per cent. In other words, PCE shows how much of the total lead time is utilized in doing actual process work. Actual process work means nothing but value-added work. Value added work means all work that adds value to the product and something that the customer would pay for. Cycle time is the closest indicator of value-added work. For example, if the lead time for a product is 20 hours and Value Added Time is 2 hours, the PCE is calculated as 2 divided by twenty multiplied by hundred percent which is 10%. This indicates that only 10% of the overall process lead time is utilized in doing value-added work.

1.71 Batch Size

Batch Size In the previous few slides, we have explained the concepts of TAKT Time, Cycle Time, and Production Cycle Efficiency. Now, in the next few slides, we will learn more about Batch Size. Traditionally, production models are used to run on EOQ (abbreviate) also known as Economic Order Quantity and ELS (abbreviate) also known as Economic Lot Sizing. Batch Size and a related concept, one piece flow, were introduced with Toyota Production System and Lean. To calculate Batch Size, an important metric EPEI (abbreviate) needs to be understood completely; EPEI stands for Every Part Every Interval. In the next slide we will understand EPEI or Every Part Every Interval.

1.72 Every Part Every Interval(EPEI)

In this slide, we will look into a situation for calculating EPEI. Three items with their daily demand units, Cycle Times, Run Times, and Setup Times or SU(S-U) Times indicated in the form of a table are shown in the slide. We can refer to the slide for the necessary data for the calculation given in the next slide.

1.73 EPEI(Contd.)

In this slide we will calculate the EPEI. Let us start with Step 1. As mentioned in the slide, total available production time is 12 hours. That is 720 minutes. Total run time of machines is the sum of run times of all three items mentioned in the table which is 100 minutes plus 200 minutes plus 300 minutes and that equals 600 minutes. Total time for setup and changeover available is the total available time minus total run time which is 720 minutes minus 600 minutes and that equals 120 minutes. In Step 2, we will calculate the actual setup time. Actual setup time is 10 minutes plus 20 minutes plus 30 minutes and that equals 60 minutes (sum of the set up times of all the items.) It is in Step 3 that we calculate EPEI (abbreviate) EPEI is actual setup time divided by total available setup time. Applying the formula on the data, the EPEI is 0.5 Days. Interpretation is that EPEI in this case is 0.5., i.e., we can do a setup every 0.5 day (also, can be interpreted as two setups per day.)

1.74 EPEI(Contd.)

EPEI is continued in this slide as well. The benefits of calculating and adhering to the EPEI concept and metric are as mentioned below: It reduces lead time to as low as possible, it helps identify setup time accurately; –it is easy to calculate; it is easy to understand how to reduce it; and finally it is easy to implement. Optimal EPEI means finding optimum number of changeovers to match TAKT time. This eliminates waste due to waiting or over production in the system. For this, we might have to slow down the process as well as match TAKT time. Also it means that the production is leveled, which is extremely helpful when the production patterns are extremely volatile. In the next slide, we will look into an EPEI calculation spreadsheet.

1.75 EPEI Calculation Spreadsheet

EPEI Calculation Spreadsheet We can see a snapshot of the EPEI calculation spread sheet that has been enclosed for reference, in this slide. Please note that this sheet has been provided as part of the toolkit.

1.76 Batch Size Assignment

Batch Size – Assignment Let us now calculate Batch Size with the help of this small assignment given. According to the slide, number of machines is given as 10. The Cycle Time per part is 2 minutes. Average daily demand is 20 and the available production time or work hours is 480 minutes. The average changeover time is 60 minutes and this happens once at the end of every shift. The solution for this is mentioned below. Solution In step 1, we will understand how to calculate production time needed. Production time needed is number of machines multiplied by Cycle Time per part multiplied by Average Daily Demand. Taking data from the problem, production time needed is 10 multiplied by 2 multiplied by 20 and that equals 400 minutes. Time available for setup is available production time minus production time needed. Applying the formula with the data that we have, the total time available for setup is 80 minutes. Let us look into step 2 in the next slide.

1.77 Batch Size Assignment(Contd.)

In step 2 we will calculate EPEI. EPEI is number of setups possible in the 80 minutes setup time. The formula for EPEI is Total Setup Time calculated divided by Average Setup Time provided. Applying the formula, the EPEI is 1.33. How many machines do we have? From the data, we see that we have 10 machines, right? If we have 10 machines, we need to do 10 changeovers, don’t we? The number of setups of 1.33 tells us that only 1.33 changeovers are possible, not 10. EPEI, if noted from the explanation, is the time required to cycle all the parts. Working at 1.33 changeovers per day, it would take 7.5 days to complete all changeovers. The EPEI for this assignment thus is 7.5 days.

1.78 Batch Size Assignment(Contd.)

Batch Size is given by the formula EPEI multiplied by daily demand. By doing this basic calculation, batch size is calculated as 7.5 multiplied by 20 that equals 150. Here the interpretation is that our daily demand is 20, but our Batch Size is 150. This means that we are over-producing As a Black Belt this is how we interpret and read numbers. The question is how to reduce this batch size? The answer to this is by reducing either Cycle Time or Changeover Time. Let us first explore the option of reducing batch size by reducing cycle time, in the next slide

1.79 Batch Size Assignment(Contd.)

As discussed, if we reduce Cycle Time to 1 minute from the existing 2 minutes. Then, production Time needed is 10 multiplied by 1 multiplied by 20 and that equals 200 minutes. The available time for setup is 480 minutes minus 200 minutes and that equals 280 minutes. Number of setups possible is to 280 minutes divided by 60 minutes and that equals 4.67. So, we can now reduce our lot size from 7.5 days’ worth demand to about 2.5 days’ worth demand. Reducing the cycle time by 50% results in almost a 70% reduction in inventory! Isn’t that great? The relationship here is that reduction in Cycle Time leads to reduction in EPEI which leads to reduction in Batch Size and finally, it leads to reduction in Inventory. Now, in the next slide let us look into reducing Batch Size by reducing Changeover Time.

1.80 Batch Size Assignment(Contd.)

Let us first reduce Changeover Time to 30 minutes with no change to the Cycle Time. Number of setups = 480 minus 400 divided by 30 = 80 divided by 30 = 2.67 setups. So, that means with a 50% reduction in changeover time, we can achieve a good 50% reduction in Batch size. It is important to note that Batch Size indicates inventory levels in the production line. Needless to say, the Batch Size needs to be kept at minimum levels possible, which means that the inventory should be reduced.

1.81 Crew Size

In this slide, let us now try to understand what Crew Size is. Crew size is the number of people needed to man the production line. Crew Size is given by the formula, Cycle Time divided by TAKT Time, in its simplest versions. Let us take an example to understand crew size. A product works on a TAKT of 80 minutes and has Production Cycle time of 400 minutes. What is the Crew Size? Here is the solution. From the formula mentioned above, Crew Size is 400 minutes divided by 80 minutes which is equal to 5. Thus, we need 5 staff on the line to ensure TAKT target is met.

1.82 Crew Size Assignment

In this slide, we will find an assignment. This and the next few slides will help us deal with all complications related to Crew Size. Let us assume that in this case, the manual cycle time is about 240 seconds and auto cycle time is about 160 seconds. Now, divide 240 by 80 and that equals 3. In this equation, we have considered only the manual cycle time. Therefore, we need a staff size or crew size of 3 to meet the customer demand, on the assumption that the auto cycle time is running at 160 seconds. Thus the optimal crew size is given by the formula – manual cycle time divided by TAKT time. Here we can see how the optimal crew size is different from crew size.

1.83 Crew Size Assignment(Contd.)

Crew Size In this slide we will look into another assignment, which has to be completed with the help of the assumed or hypothetical data. Here crew size for the example given below is calculated with the help of excel spread sheet. The manual cycle times are as given below: Product A – 5 minutes Product B – 4 minutes Product C – 6 minutes The daily demand for these products is as given below: Product A – 30 units Product B – 30 units Product C – 40 units Thus, a total of 100 units are to be produced in an available time of 400 minutes for production. TAKT Time here is 4 minutes per product. For simplicity reasons, let us take no changeovers for the product. This assignment will be continued in the next slide as well.

1.84 Crew Size Assignment(Contd)

From the previous slide we learn that this is a mixed model production cell. So we just cannot add up all manual cycle times and divide them by the TAKT Time, as anyways the demand for each product is different. To get weighted average cycle time, use the excel formula = SUMPRODUCT() (pronounced as sum product open bracket close bracket) to get sum of products of cycle and demand. Then, divide the output by SUM() (pronounced as sum open bracket close bracket)of the demand to get the weighted average. Calculate the TAKT time by using the formula total available time divided by sum of demand. And finally calculate the Crew Size by using the formula Average Cycle Time divided by Takt Time. In order to find out Crew Size using weighted average cycle time, divide weighted average cycle time by Takt Time. This will give the optimal crew size.

1.85 Standardized Working Progress(SWIP)

In this slide, we will discuss another Lean concept, standardized work in Progress, popularly known as SWIP (pronounced as S-W-I-P). Please note that only the concept of SWIP is to be understood in the Black Belt training curriculum. Let us take an example to understand this. The customer demand is 100 units and the available time is 400 minutes of production, factoring in the breaks. TAKT Time is 400 divided by100 which equals 4 minutes per piece. Assume that the manual labour time per piece is about 2.5 minutes and automatic time is 1.5 minutes, Then, the Total Cycle Time is 2.5 minutes plus 1.5 minutes which is equal to 4 minutes. Thus, SWIP (abbreviate) is equal to 1. This is the minimum necessary process inventory needed, to maintain one-piece flow. The SWIP of 1 means we need 1 piece of SWIP per person or in simple terms, 1 piece of minimum inventory is necessary per person to maintain one piece flow.

1.86 Summary

That brings us to the end of this lesson. Before we start with the next lesson, let us do a quick recap of the topics discussed in this lesson. In this lesson we have understood the concepts of: Warusa Kagen (pronounced as wah-roosa-kaa-guhn); 3Ms;8 types of Waste; Mottainai (pronounced as motei-neigh); and HOSHIN KANRI (pronounced as h?’ shin kaan’ri)Approach. Also, we have learnt the concepts and calculations of TAKT Time, Cycle Time, Lead Time, Production Cycle Efficiency, Batch Size, Crew Size, and finally Standardized Work in Progress (SWIP). We will look into lesson number 7 in the next slide.

1.87 Lesson 7 Lean Tools Explained

In this lesson we will cover some of the important Lean Tools and explain their purpose and how to use them. We will understand some popular Lean tools, which as a Black Belt, we would use in our real life projects during Lean implementation.

1.88 Agenda

In this lesson, we will learn about 5S; SMED; Heijunka; Genchi Gembutsu; and Value Stream Mapping (VSM). Let us start this lesson by discussing 5S.

1.89 5S

The first tool that we would be learning about is 5S. In terms of application, this is one of the easiest tools to apply in Lean Manufacturing. The objective of applying 5S is to have a clean workplace, which further improves the chances of manufacturing a quality product at all times. 5S stands for Sort, which in Japanese is Seeri; Stabilize, which in Japanese is Seeton; Sweep, which in Japanese is Seeso; Standardize, which in Japanese is Seeketsu; and Sustain, which in Japanese is Shitsuka. By applying 5S, we can realize organized workplace, quality, and improved health and safety of workers as the key benefits.

1.90 5S(Contd.)

This slide provides us with a pictorial overview of the 5S cycle. It starts with Sort, which helps in organizing things that we use most and separate them from things that are not used. The second S is Stabilize, which ensures every item is labelled accurately and is in its place. Shine or Sweep, which is the third S, makes sure that the workspace is clean and tools are in working order. The fourth S is Standardize, which helps putting together standard operating procedures. The fifth and the last S namely Sustain, which is the most important part of the cycle ensures that the gains are sustained. The 5 S forms a cycle and need to be followed continuously as a journey to get the maximum out of it.

1.91 5S Audit Worksheet

5S Audit Worksheet In this slide we will find a snapshot of the 5S Audit Worksheet. Use the 5S Audit Worksheet tool provided as part of the toolkit whenever a 5S Audit is done at the workplace.

1.92 SMED

In this slide, we will learn about SMED (pronounced as S-M-E-D) or Single Minute Exchange of Die. It is one of the most powerful Lean tools and is practically used in all Lean implementations. The thought behind using SMED (pronounced as S-M-E-D) was the losses that occurred due to high setup time, which was one of the major reasons for lead times to get protracted. Setup time is the time spent in setting up machines to make them ready for production. Thus, in Lean implementation, reducing the setup time is one of the key objectives for a Black Belt. The basic idea in doing SMED is to reduce complications in machinery and make it simpler, easier, and faster to setup. Remember one thing, if we have machines in our production line, we cannot have zero setup time. We can only look to reduce the setup time to manageable levels. Setup time is further classified into internal and external Setup time. External setup is one that can be completed while machine is in operation. And the time taken for setting it up is called the external setup time. While, internal Setup requires machine shutdown for operation and the time required for the same is termed as the internal setup time. The main goal of SMED is to change all internal setups to external setups, reduce length of internal setups if unavoidable, and reduce lengths of external setups. Let us discuss the benefits of SMED in the next slide.

1.93 SMED(Contd.)

Some benefits of SMED are mentioned below: It will help reduce the setup time. Since there is less downtime, higher efficiencies are gained by using it. SMED will help in increased capacity; this will lead to have more machine time available and hence can produce more at the same time with same machines and resources. It will reduce number of work in progress products. SMED will help reduce the batch size. Overall safety of the workers on the shop floor is increased. There will be higher flexibility. Waiting time will be reduced. Operator’s preference can be honoured. The flow of raw material in SMED is such that there is no stock to be maintained and inventory does not build up resulting in reduced inventory. This is the final benefit that will help us get towards stockless production. It is important to note that SMED is an important technique, which is adopted in most Lean implementations and one that starts with study of Setup time.

1.94 Heijunka

In this slide, we will discuss Heijunka, a very popular production levelling technique. Before we learn about Heijunka, please note that there are two types of levelling techniques. One is demand levelling and the other is production levelling. Heijunka is a production levelling technique. Heijunka is a Japanese word, which means leveling. Heijunka’s concept, also known as Heijunka Box, ensures that volatile customer demands are leveled. Heijunka principle helps in reducing muda. Here is a gentle reminder– Muda is one of the Warusa Kagen (pronounced as wah-roosa-kaa-guhn) conditions. The main goal of Heijunka is to produce intermediate goods at a ready constant rate, by reducing fluctuations in the production process. In scenarios of constant demand, leveling is easy to do. In scenarios where demand fluctuates, leveling can be done as per demand leveling or production leveling. Here is how Heijunka is implemented. Step 1 in leveling production is to assemble a mix of models in each batch, and Step 2 is to reduce Batch Size.

1.95 Heijunka An Example

In this slide we will look into an example that illustrates the working of Heijunka. A company workshop works for 8 hours a day, 5 days a week, and 20 days a month. It manufactures a product in one hour. Below is the average market demand: A 28 B 60 C 18 D 18 E 10 F 6 Total 140 Assume changeovers and setups to be taking place for one hour every day. A traditional planning model will manufacture 28 products of A in 1 hour slots, and then 60 products and so on. As per Heijunka Planning, the batches would have a mix of all the models and with a reduction in Batch Size. By doing so, we can reduce lead time by up to 45%.

1.96 Genchi Genbutsu

In this slide, we will learn about Genchi Genbutsu. Genchi Genbutsu or Genchi Gembutsu means "go and see.”. Genchi Genbutsu suggests that in order to truly understand a situation one needs to go to "gemba" or visit the shop floor where the real work is done. This is also called as the Heart of Lean, as by doing Genchi Genbutsu on the gemba (shop floor), management can identify key issues (visual as well as hidden). Genchi Genbutsu in simple words is a management activity, with no statistical connotations attached to it. The objective is to enforce the management to step out of their cabins and regularly visit the Gemba (Shop floor) to inspect for problems. If the problem exists on the shop floor it needs to be understood and solved at the shop floor and cannot be done sitting in the cabin. Genchi Genbutsu is, therefore, a key approach in problem solving.

1.97 Value Stream Mapping(VSM)

In this slide, we learn more about Value Stream Mapping or VSM, a powerful Kaizen activity which figures in all Lean implementations. Among the principles of Lean, the second principle of Lean was to map the Value Stream. It is here that a Value Stream Map is used. Value Stream Mapping (VSM) is a very powerful tool that helps in identifying the wastes and moving from the current state process to a future state process. VSM must always be preceded by rigorous Genchi Genbutsu, which will help collect relevant data for the process. It is important to remember that the process needs to be mapped from a customer point of view and not from a process point of view. A lot of people think that the value needs to be mapped from a business standpoint. That concept is incorrect. Always make sure to identify value from the customer’s perspective. VSM has to be done in two steps. Step 1 is to create a current state map identifying all wastes and Step 2 is to create a future state.

1.98 VSM Symbols

In this slide, we will see the symbols that are used in drawing a Value Stream Map. VSM is drawn with the help of a software application Microsoft Visio. We can also draw a VSM on Microsoft Word and Microsoft Excel. We will be discussing VSM in the coming slide as well.

1.99 Value Stream Mapping(Contd.)

The important data metrics that are to be collected before drawing a Value Stream Map are given below: Cycle time or the time taken to make one product; Change over time from last good piece to next; Uptime or the on-demand machine utilisation); Number of operators; Net available working time; Scrap rate; Pack size or pallet sizes; Inventory; and Yield. It is important to know that any data that contributes to the product flow or adds to the cost of the process should be collected by Genchi Genbutsu. That is one of the reasons why Genchi Genbutsu is one of the non-compromised activities in Lean implementation.

1.100 Value Stream Mapping(Contd.)

In this slide we will discuss the key steps to do Value Stream Mapping. Key steps to do Value Stream Mapping are as mentioned below. They are: First, list all of the steps in a process from beginning to end and create a diagram with a box for every step, in sequence. In the next step, calculate the time currently required to complete each step of the process, and add that time to the box. Now add the time in each box to yield the Total Cycle Time. Then, identify Non-Value-Add (also called as NVA) steps. NVA steps include inspection, test, rework, set-up, inventory buffers, and product movement other than customer delivery. Or in simple words, it includes any activity that does not improve the form, fit, or function of the product on the first pass through the process. In the next step, move the boxes representing NVA steps to the right of the value-adding steps. Now add the time in each of the NVA steps to yield the NVA Cycle Time. This is the waste that could be eliminated if only value-added steps were performed. Add the time in each of the value-added process to yield the Value-Added Cycle Time as the next step. After that step calculate the percentage of the Total Cycle Time that is a function of NVA steps. A pie chart can be constructed for this purpose. Next, identify the target cycle time per business discussions. Now, diagram the target process and determine the Total Target Cycle Time. Then, analyse the NVA steps to identify actions to reduce or eliminate these operations. Some NVA steps may be necessary for the business. After that analyse the Value-Added steps to identify improvement opportunities and implement actions to reduce the cycle time. In the last step, diagram the improved process, compare to the target process, and identify gaps for further improvement actions, in an on-going cycle, until the target is achieved. Please use the tool, VSM template, provided as part of the toolkit to construct own VSM. For further instructions, refer to the Generic VSM worksheet in the toolkit. With that we come to the end of this lesson. Let us look into the summary in the next slide.

1.101 Summary

In this lesson, we have learnt how to use 5S, SMED, Heijunka, Genchi Genbutsu, and also how to construct Value Stream Map for a process. It is important to refer to the Worksheet Lean Glossary in the Toolkit provided for understanding the tools, concepts, and their applications better. It is quiz time! Attempt the quiz questions to check your understanding on this section of Lean Six Sigma Black Belt. In the next section we will be discussing DFSS: Pre-Define and Define (DMAIC) (pronounced as D-may-ik).

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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