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  • Chapter 10

    Lean Systems andLean Systems and

    Six-Sigma Quality

    10-1

  • Lecture Outline

    What is Lean?

    Lean Production

    Respect for People

    10-2

    Respect for People

    Total Quality Management (TQM)

    Statistical Quality Control (SQC)

    Six-Sigma Quality

    Lean Six-Sigma Supply Chain

  • What is Lean?

    Lean is a management approach forcreating value for the end customerthrough the most efficient utilizationresources possible

    10-3

    Standard in many industries

    Often results in:

    large cost reductions

    improved quality

    increased customer service

  • Lean Six Sigma

    Combines the approaches of Lean and Six Sigma

    Six Sigma methodology to identify and eliminate causes of

    quality problems

    10-4

  • Tenets of Lean

    There are six tenets of the Lean Philosophy:

    1.Elimination of Waste

    eliminate all non-value adding activities

    2.A Broad View2.A Broad View decisions made for the success of the

    entire supply chain all supply chain members responsible for

    adding value

    3.Simplicity the simpler the solution the better

    10-5

  • Tenets of Lean Continued

    4. Continuous Improvement emphasis on quality and continuous

    improvement called kaizen

    5. Visibility visible problems are identified and solved

    6. Flexibility easily switch from one product type to

    another, using flexible workers thatperform many different tasks

    10-6

  • Elements of Lean

    Lean is composed of three elements thatwork in unison:

    Lean Production

    Total Quality Management (TQM)

    Respect for People

    10-7

  • Elements of Lean

    10-8

  • Lean Production

    Coordinated system for producing theexact products desired, delivered in rightquantities to where needed Just-in-Time

    The Pull System

    Visual Signals

    Small Lot Production

    Uniform Plant Loading

    10-9

  • The Pull System

    Traditional approach

    supply chains work as push systems

    inventory carried to cover up problems

    Pull approach

    each stage in supply chain requestsquantities needed from the previous stage

    no excess inventory generated

    reduced inventory exposes problems

    10-10

  • Visual Signals

    Communication between workstations

    Kanban signal or card in Japanese

    contains information passed between stations contains information passed between stations

    authorizes production

    10-11

  • Visual Signals

    10-12

  • Small Lot Production

    The amount of products produced at anyone time is small

    reduces inventory and excess processing reduces inventory and excess processing

    increases flexibility

    shortens manufacturing lead time

    responds to customer demands morequickly

    setup time must be low

    10-13

  • Uniform Plant Loading

    Problem

    demand changes are magnified throughout thesupply chain

    contributes to inefficiency and waste

    Uniform Plant Loading

    production schedule is frozen for the month

    also called leveling

    helps suppliers better plan own production

    10-14

  • Respect for People

    Respect for all people must exist for anorganization to be its best

    flatter hierarchy than traditional organizations

    ordinary workers given great responsibilityordinary workers given great responsibility

    supply chain members work together in crossfunctional teams

    Look at Role of:workers, management, and suppliers

    10-15

  • Role of Workers

    Workers have the ability to perform manydifferent tasks and are actively engaged inpursuing company goals

    Worker DutiesWorker Duties

    improve production process

    monitor quality

    correct quality problems

    Work in Teams

    quality circles

    10-16

  • Role of Management

    Create the cultural change in theorganization needed for Lean to succeed

    provide atmosphere of cooperation provide atmosphere of cooperation

    Empower workers to take action based ontheir ideas

    develop incentive system for lean behaviors

    10-17

  • Role of Suppliers

    Lean builds long-term supplier relationships

    companies partner with suppliers

    improve process quality

    information sharing

    goal to have single-source suppliers

    10-18

  • Total Quality Management (TQM)

    TQM is an integrated organizational effortdesigned to improve quality at every level

    Look at:Quality GurusQuality Gurus

    Voice of the Customer

    Costs of Quality

    Quality Tools

    ISO 9000

    10-19

  • Quality Gurus

    10-20

  • Voice of the Customer

    Quality is defined as meeting or exceedingcustomer expectations

    Determine customer wants: Determine customer wants:

    focus groups

    market surveys

    customer interviews

    10-21

  • Costs of Quality

    10-22

  • Quality Tools

    Lean requires workers to identify andcorrect quality problems

    Seven Tools of Quality Control:

    Cause and Effect Diagrams Cause and Effect Diagrams

    Flowcharts

    Checklists

    Control Charts

    Scatter Diagrams

    Pareto Analysis

    Histograms

    10-23

  • Cause and Effect Diagrams

    Identify causes of a quality problem

    sometimes called fishbone diagrams

    10-24

  • Flowchart

    Diagrams the sequence of steps in anoperation or process

    10-25

  • Checklist

    Lists common defects and number ofoccurrences of the defects

    10-26

  • Control Chart

    Determines whether a process is operatingwithin expectations

    10-27

  • Scatter Diagram

    Graph that visually shows how twovariables are related to one another

    10-28

  • Pareto Analysis

    Based on the premise that a small number ofcauses create the majority of problems

    identifies problems based on degree of importance

    10-29

  • Histogram

    Chart that shows the frequency distribution ofobserved values of a variable

    10-30

  • ISO 9000

    Family of standards for quality management

    increased international trade developed a need

    published by International Organization for Standards(ISO) in 1987

    concerns measuring and documenting the qualityprocess

    ISO provides a certification process

    ISO 14000 standards for environmental management

    10-31

  • Statistical Quality Control (SQC)

    SQC is the use of statistical tools to measureproduct and process quality

    Three categories:

    Descriptive StatisticsDescriptive Statistics describe quality characteristics

    Statistical Process Control (SPC) a random sample of output is used to

    determine if characteristics are acceptable

    Acceptance Sampling sample determines if whole batch is acceptable

    10-32

  • Sources of Variation

    All processes have variation

    Assignable Variation

    caused by factors that can be clearly caused by factors that can be clearlyidentified and managed

    Common Variation

    inherent in the process

    also called random variation

    10-33

  • Process Capability

    Process Capability evaluates the variation ofthe process relative to product specifications

    Product Specifications

    ranges of acceptable quality characteristics ranges of acceptable quality characteristics

    also called tolerances

    Process Variation

    all processes have natural variation

    defects are produced when variation exceedsproduct specifications

    10-34

  • Process Variation Equal toSpecification Range

    10-35

  • Process Variation ExceedsSpecification Range

    10-36

  • Process Variation Narrower thanSpecification Range

    10-37

  • Process Capability Index

    where: USL = upper specification limit

    6

    LSLUSL

    rangeiationvarprocess

    rangeionspecificatproductCp

    LSL = lower specification limit

    Cp Values:

    Cp = 1: process is minimally capable

    Cp 1: process is not capable of producingproducts within specification

    Cp 1: process exceeds minimum capability10-38

  • Cp Example

    Given a process with three separate machinesthat are used to fill jars with pasta sauce.

    specification range is between 30 and 34 ounces

    process mean, , is 31 ounces process mean, , is 31 ounces

    10-39

    Machine

    A 0.6

    B 0.7

    C 1.2

    Calculate the Cp foreach machine todetermine capabilities

  • Cp Example Continued

    A:

    6

    LSLUSLCp

    11.1)6.0(6

    3034Cp

    Machine A has a A:

    B:

    C:

    10-40

    11.1)6.0(6

    Cp

    95.0)7.0(6

    3034Cp

    55.0)2.1(6

    3034Cp

    Machine A has aCp > 1, howeverthe process meanis not centered

  • Cpk Example

    Cpk addresses the lack of centering of theprocess over the specification range

    3

    LSL,

    3

    USLminCpk

    Machine A:

    Cpk = min (1.66, 0.55) = 0.55

    10-41

    33

    )6.0(3

    3031,

    )6.0(3

    3134minCpk

  • Process Control Charts

    Graph that shows whether a sample of datafalls within the common range of variation

    1.sample process output

    2.plot result on the control chart2.plot result on the control chart

    3.use to determine if process is in control

    can monitor: variables

    characteristics that can be measured