Lean Six Sigma, Kaizen and Kata for Chemical Engineers

Ms. Janet L. Hammill Leadership Career with Dow Chemical, GE Plastics and Alcoa Six Sigma Master Black Belt (6σ MBB) Director, J L Hammill Consulting, Hammill.Janet55@gmail.com

AIChE and ABEQ Oct 2016

Agenda

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Observation: This Document contains 5 Messages from Mars

Focus Lean Sigma, Kaizen and Kata Getting Started in 2016 Proven Success Take Aways

Message One: Focus

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At some point, everything's gonna go south on you and you're going to say, this is it. This is how I end. Now you can either accept that, or you can get to work. That's all it is. You just begin. You do the math. You solve one problem and you solve the next one, and then the next. And if you solve enough problems, you get to come home.

World Class Manufacturing Pillars are not just for Manufacturing

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We are talking about Excellence: You remember Jack Welch’s book Get Better or Get Beaten? and Bill George’s book True North?

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Process Vision

(To Be)

Benefits Realized

Gap Analysis

Process Vision • Vision • Executive Summary • Business Value • Project Scope • Project Tracker • Resources engaged • Key Metrics Tracker • High level Process • Collaboration Tools • Critical Success Factor • Quality Functional Deployment

Gap Analysis • Baseline key metrics • Diagnostic tools • Process assessment • Data quality report • Cause – Effect chart • FMEA, risks • Job Aids, Agreements • Troubleshooting guide

Implementation Plan • Project Plan Template Organizational Model Business Decisions & Policies Electronic invoicing Training & education Root Cause Correct Action Celebrate

Sustain & Translate Process Performance Reports Global Template & ERP Governance Sharing Mechanisms FMEA for sustaining reduction Control charts Control audits Project close and celebration

Implement Plan

Sustain & Translate

Define Measure/Analyze Improve Control (Six Sigma Project)

Business Process Excellence Journey Six Sigma Roadmap (Apply the Pareto Principle: 80/20 Rule)

Know Your Performance Capability

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Six Sigma improvement strives for precision and accuracy by reducing the deviation or spread and meeting the target.

What is 6 Sigma Quality Performance?

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To create this chart, all you need is performance measurements (the more the better). Then, you calculate the average and the standard deviation. Sigma is a measure of spread or variation or deviation. Analysis of improvement and process capability is based on this distribution.

Why 6 Sigma Quality Performance?

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SIGMA % GOOD % BAD DPMO

1 30.9% 69.1% 691,462

2 69.1% 30.9% 308,538

3 93.3% 6.7% 66,807

4 99.38% .062% 6,210

5 99.9777% 0.023% 233

6 99.9997% 0.00034% 3.4

2 Sigma: Putting performance of Tiger Woods. He misses approximately 1 out of every 3 putts.

1 Sigma: 470 empty coffee pots at work /year (who didn’t fill the coffee pot, again?) per 680 opportunities /year.

3 Sigma: 1,970 U.S. flight cancellations per day

6 Sigma: 10 U.S. flight cancellation per day

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Benefits Realized

Define Measure Analyze Improve Control

BPE Journey and Kaizen Roadmap Apply the Fit-for-Purpose, Good Change Principle

Define Product Group and Identify

the Customer Demand

Map the Product and Information

Flow

Determine the Bottleneck and

Process Efficiency

Streamline Process Flow and Eliminate

Waste

Develop System to Meet Tak

Time and zero WIP

Lean and Kaizen Process

Kaizen and Lean Tools and Process Apply the Fit for Purpose Principle

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Benefits Realized

BPE Journey and Kata Roadmap Apply the KISS Principle

What Do Six Sigma, Lean / Kaizen and Kata All have in Common?

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RIP David Bowie, Jan 1947 to Jan 2016

Benefits Realized

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Excellence Roadmap has Many Faces

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The Ford Motor Company developed the 8D (8 Disciplines) Problem Solving Process (PSP), and published it in their 1987 manual, "Team Oriented Problem Solving (TOPS)."

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Long Proven History Six Sigma

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Long Proven History The Toyota Way (Lean, Kaizen and Kata, plus more)

Application and Success using the Toyota Production System (TPS) spans decades

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Most Relevant is Your History Six Sigma and It’s Precursors in the Rohm and Haas History

Message Two: Lean Sigma, Kaizen and Kata

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In the face of overwhelming odds, I'm left with only one option, I'm gonna have to science the shit out of this.

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Six Sigma and Voice of the Customer How to Know What to Work on at the Enterprise Level

Surveys, interviews and data collection was completed to gather the Voice of the Customer (Chief Finance Officer). He wanted the working capital reduced, including the time to get paid by customers (Days Sales Outstanding).

He also told us the factors that define success, the Critical to Quality (and Success Factors) or CTQ’s as shown here in this house of quality.

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Six Sigma and the Charter How to Know What to Work at the Project Level

Problem: Working capital was too high. Goal: Reduce Accounts Receivables. Starting Point: When orders were shipped. Stopping Point: When the payment was verified. Timeframe: 6 months per team. Team: A finance group in a business unit in North America that had completed the IT installation of ERP. Process Importance: Executive level attention. Process problem: Develop full use of new metrics and process and automated business rules. Project Goals: Drove days sales outstanding down by 10 days with a savings of $9 mm. Process Measurements: Delays, daily automated rule override, Error rate, Time to resolve disputes.

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Six Sigma and SMART Metrics How to Know Your Control and Status Relative to the Goal

Metrics should be defined, gathered and analyzed for each process to gauge the success of process implementation and to provide a basis for improvement. A metric is a standard measure and reported to help manage a process and to assess performance in a particular area. They are a foundation for assessing a process and the basis for any improvement. Metrics need to be consistent and reliable.

Note: Bring out the Geek in your MBB and ask about Balanced Scorecard, Critical to Success Factors, Causal Variables, Gauge R&R, Basic Statistics, Graphing, Process Capability, Gaussian and Non-Parametric Distributions, ANOVA, Regression, Statistical Process Control, Simulations, Modelling, Design of Experiments

Moneyball’s Billy Beane: You get on base, we win. You don't, we lose. And I *hate* losing, Chavy. I *hate* it. I hate losing more than I even wanna win. (Quote from the movie Moneyball)

Graph the Metrics to See Progress

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Six Sigma and Process Map How to Define the Integrated Process Important to the Customer

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Six Sigma and the Defect How to Know What Goodness Look Like in Inventory Management

Key Metrics SCOPE Owner KPIV´S

Working Capital, Cost of Inventory

$MM Supply Director Fix the new Safety Stocks Weekly Inventory Reports For Business Production Batch Report Consignments Settings New Procedures Follow up the Sales and Forecasting Training to Sales organization System settings

Inventory Days Days Finance Fix the safety stocks in Manugistics Reports More communication

Slow Moving and Overage Provision

$ MM

Warehouse lead

Slow Moving Report Analysis of the data and RCCA More communication with the whole organization

including quality, manufacturing and sales Training Procedures

DFC, Days Forward Coverage

Days Warehouse lead

New report New procedure New Metrics by subfamily Communication Stock out/stock high

This table links the performance variables (Key Metrics) with the process variables (Key Input Variables [KPIVs]). Each measureable KPIV has a upper and lower limit or a date when this process variable was changed. Each Key Metric has an upper and lower specification limit. When outside the allowable range, a defect was recorded.

Six Sigma Control Chart (Minitab Chart) How to show reduction in slow moving inventory (metric tons) within each of 4 project phases

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M o n t h s f r o m w h e n w e s t a r t t h e p r o j e c t

I n d i

v i d u

a l V

a l u e

1 5 1 4 1 3 1 2 1 1 1 0 9 8 7 6 5 4 3 2 1

2 , 0

1 , 5

1 , 0

0 , 5 _ X = 0 , 4 9 3 U C L = 0 , 7 1 2

L C L = 0 , 2 7 4

1 2 3 4

O b s e r v a t i o n

M o v

i n g

R a n

g e

1 5 1 4 1 3 1 2 1 1 1 0 9 8 7 6 5 4 3 2 1

0 , 8

0 , 6

0 , 4

0 , 2

0 , 0

_ _ M R = 0 , 0 8 2 3

U C L = 0 , 2 6 9 0

L C L = 0

1 2 3 4

1 1 1

I - M R C h a r t o f s l o w m o v i n g p r o v i s i o n b y p h a s e s

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Kaizen and the A3 Report Out How to Tell the Kaizen Event Story once Completed

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Kaizen and Value Stream Map (VSM) How to Reveal the Hidden Factory in Fabricating an Aluminum Part

3 Classifications of Activities: Value Add, Non-Value Add & Business Value Add

Kaizen Event 4 Phase Structure

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Planning the Kaizen Event

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Kaizen Conducting the Event How to Conduct a Kaizen Event

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Kaizen and 8 Wastes (Muda) How to Know When Cost is NOT adding Value, DOWNTIME

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Kaizen and the Gemba Walk How to See Opportunities and Successes with Leaders

Genba (現場 ?, also romanized as gemba) is a Japanese term meaning "the real place." In business, genba refers to the place where value is created; in manufacturing the genba is the factory floor.

Gemba Walk – When? Timing and frequency is a function of “Who”.

VP of Operations – Quarterly

Plant Manager – Monthly

Manufacturing Director - Weekly

Team Leader - Daily

Operator

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Kaizen and the 5S’s How to Know Uncover Risks, Issues and Demonstrate Quality

Sort: When in doubt, move it out Set in Order: A place for everything and

everything in it’s place Shine: Clean and inspect or inspect

through cleaning Standardize: Make up the rules, Follow

and Enforce them Sustain: Part of Daily Work and it

becomes a habit

Before and After a Maintenance 5S event

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Lean Sigma and the Control Chart How to Measure Sustained Improvement –Batch Run Time

Plotting the performance in Europe and Asia over time (query response time) using Minitab control chart to see the impact of 3 changes (changing naming convention to shorter names, change bandwidth and changing run sequence).

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Lean Sigma and the C&E Diagram How to Uncover Potential Causes of the Problem

Getting the team together to brainstorm potential causes for every boxed category helps to uncover the primary root causes of the problem (stated in box at right).

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Lean Sigma and the 5 Why’s How to Uncover Root Causes

Lean Sigma and Risk Management How to Uncover and Mitigate Potential Risks

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FMEA to define the risk of changing the process and system used to run batch processes within IT

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Kata

Two Katas: Improvement and Coaching

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Improvement Kata A routine that helps you to improve,

adapt and evolve Coaching Kata

A routine that makes the experienced leaders and managers provide Improvement Kata to everyone

Coaching Kata

Improvement Kata

Kata and the Coaching Culture

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Kata: Learning and Engaging in Solutions

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Kata: an Investment in your People

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Kata Develops Agile Problem Solvers

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Kata and the Manager’s Role

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What is Management’s Role ?

Traditional Management Focus on the solutions

Establish targets Describe solutions Provide incentives Get out of the way and

periodically check results

Toyota Kata Management Focus on how solutions are developed

Establish targets Develop, via practice with

coaches, the capability in people to develop new solutions…

By having people practice a common way of working, like the improvement Kata

Ten Indicators that Managers Don’t Follow Kata Principles of Productivity and Respect

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Being a Bottleneck Not Truly Delegating Responsibility Not Conveying Clear Expectations Not Giving Useful Feedback Not Letting People Telecommute When the Work Allows It No “Concentration” Time Neglecting Employees Needs for Better Job Performance Insisting on a Doctor’s Note to Take a Sick Day Scrimping on Training Creating a Climate of Fear and Anxiety

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Message 3: Getting Started Igniting the Journey

Every human being has a basic instinct: to help each other out. If a hiker gets lost in the mountains, people will coordinate a search. If a train crashes, people will line up to give blood. If an earthquake levels a city, people all over the world will send emergency supplies. This is so fundamentally human that it's found in every culture without exception. Yes, there are assholes who just don't care, but they're massively outnumbered by the people who do.

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Getting Started Continuous Improvement Deployment Steps Paint the Big Picture Sponsorship Focus Plan the Work Readiness Assessment Training and Coaching Work the Plan Embed in the Culture

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Message 4: Proven Success

Improving Annual Report Figures in Working Capital Stopping Price Erosion Reducing Legal Claims Increasing Compliance and Safety

Mars will come to fear my botany powers.

Business Process Excellence (BPE) Journey Expected Benefits Realization with ERP

% of Respondents with Measurable Results(Note: Based on multiple answers per respondent.)

0 10 20 30 40 50 60

Improved Sales & Operations PlanningImproved On-Time Delivery

Improved Supplier ManagementTransportation/Logistics Cost Reduction

Faster Financial Close CycleMaintenance Reduction

Order Management/Cycle Time ImprovementProcurement Cost Reduction

Productivity ImprovementIT Cost Reduction

Revenue/Profit EnhancementEffective Cash Management

Personnel ReductionInventory Reduction

AnticipatedActual

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Proven Success: Price Erosion

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Proven Success: HR Leave of Absence Defects Opportunity: Improvement:

Impact: Future Opportunities:

Problem: The magnitude of negative earnings can be reduced. A significant cause of negative earnings is expected to be a result of late entries for critical data and updates.

Action: By tracking the late entry corrections, the root causes can be investigated and mitigated.

Benefits: A reduction in negative earnings as a result of late entries is the primary benefit and with this report it can be managed monthly.

Working closely with HR Operations to ensure training and reminder communications are in progress. An expected root cause for summertime increases are associated with the need for timely management of interns status.

Next Steps: Timely data entry: Entry of critical data is more timely managed (such as departure and return dates from LOA), The course of action planned is to ensure training and reminder communications are regularly provided to the appropriate groups (HR representative and analysts and line managers).

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Proven Success: Compliance and Safety

Expected Benefits from a Lean Event

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Message 5: Take Aways Lessons Learned

Start with a Vision of Process Excellence Select Projects that Provide Strategic Value Assign your Best Project Leaders Monitor with SMART Metrics Trust the Process – Build Creativity and Drive Change Expect Sustainable Results Close the Project and Celebrate Seek the Next Opportunity for Process Excellence

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Continuing the Dialog

What are the compelling drivers in your organization now? How do you ensure alignment on current state and

desired state? How to gather the Voice of the Customer? What does it take for you to engage the team? Why do you leaders need to know change management? Do your efforts result in value delivery? When do you improve, how do you know the results are

sustained? What are you going to do to bring Kaizen and Kata into

your organization as a result of this roundtable discussion?

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Thank You

Let's go get our boy.