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A printer focuses on getting an image on some kind of media. A manufacturer focuses on getting products manufactured to specifications. Your business may not involve life-or-death services or products, so your mistake rate is unlikely to be any better. Operations: Operations includes every other aspect other than the core business: marketing, sales, orders, purchasing, billing, payments, etc. These are all operational problems. Most businesses spend too much time working on their strengths making the core business process more effective and efficient and too little time working on their weaknesses marketing, sales, invoicing, billing, shipping, purchasing, and payments.
While the customer-affecting improvements to the core business are important, the profit-affecting ones on the operations side are critical to reducing costs and boosting profit. To make breakthrough improvements in speed and quality possible, you have to take some time out of your busy schedule and shift your focus. I got the part numbers and went to one of the checkouts in Appliances.
They said that they could order the dishwasher, but not the TV. The TV department wanted to charge me double to have it delivered on the same day as the dishwasher. We all get trapped mentally inside of our companies and our orientations because we spend so much time working in them. It takes some mental gymnastics to learn how to step outside of the business, to get some distance from it, so that you can work on the business and its processes.
If you want a reliable, dependable business that produces predictable, consistent results, you will need proven methods and tools to make it happen. Customer-serving processes grow up in an ad hoc fashion. Business owners come to rely on their people, not their processes, to deliver a consistent return on investment. It becomes a way of life in most businesses. When daily heroics are required to avoid missing commitments and preventing mistakes, companies come to rely on heroes.
The clinical side of healthcare is especially prone to this process. This is another mistake. This often comes from your business orientation. People-oriented companies focus their attention on who is doing the job. Peopleoriented businesses believe that quality and productivity are a function of their people, not their processes. Unfortunately, great people come at a premium price and when they leave they take their wisdom and process with them.
When these wizards leave, they take their highly refined mental processes with them. Process-oriented businesses, on the other hand, rely on mistake-proof processes to ensure that care is delivered on time and error-free. Process-oriented companies focus on developing and following the right process.
They depend on good processes to produce superior results. They have procedures for everything from cleaning restrooms e.
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Based on research done in Australia, most hospitals are implementing rapid response teams RRTs to prevent codes. There are a few key vital signs that indicate a patient is heading for a code; nurses are being trained to identify these trends and call in an RRT. The hospitals that have implemented RRTs have cut their codes and mortality rates by half or more. Similarly, hospitals have identified a few key procedures and therapies that can prevent problems for heart attacks, heart failure, ventilator acquired pneumonia and infection prevention. Some of these are as simple as an aspirin at arrival and discharge.
The Institute for Healthcare Improvement IHI estimates that these therapies saved , lives over an month period from to This is the power of good processes. They not only save time and money; they can save lives. Labor costs are cheaper because you are not bidding for a small group of the best people; you can hire anyone and train them for the job. Watch your customers. What are they doing?
Maybe you can easily see ways to make your product more beneficial, easier to use, less likely to fail, and so on. How long does it take to gather all the information to issue an invoice or bill? Why does a purchase order take so many approvals? Why does it sit in so many in-baskets waiting for a signature? Face it, your product or service is lazy. Watch your product, not your people. Research into the science of change has found that one set of problem-solving methods e. Then you will want to discover a new set of methods and tools to solve the next class of problem.
Consider antibiotics: they fight bacterial infections, but not viruses like the common cold. The same is true in business. Since most processes are created by accident in an ad hoc way, problems with the processes are fixed using common sense and trial-and-error as the business grows. Eventually, they stop working all together. This early-success and later-failure syndrome affects all problem-solving methods. Throughout time, people have routinely found ways to solve seemingly unsolvable problems.
Edison invented the light bulb. The Wright brothers figured out how to fly. But to do this, they invariably had to invent new ways to solve problems that exceeded the grasp of the old methods. Fortunately, the methods and tools for creating and improving your processes and systems have already been developed and proven in every industry. Lean Six Sigma has a seemingly bottomless pit of tools and techniques to make improvements, but I have found that a few key tools used in the right sequence are all you need to start making immediate breakthrough improvements in speed, quality, productivity and profitability.
Every business has to improve the key aspects of performance every year just to keep even with the competition. Turn your business into an asset that produces predictable results. The Universal Improvement Method Give a man a fish and you feed him for a day; Teach a man to fish and you feed him for a lifetime.
Life and business involve a series of incremental, sustaining improvements punctuated by periodic, dramatic and disruptive improvements. Invariably, this process of personal and professional evolution involves four key steps: 1. Focus on one key problem, skill, or area of your business life at a time. Improve significantly in that area. Sustain the improvement through repetition and practice until it becomes an unconscious habit. Measure and monitor to ensure that you sustain the new, higher level of performance. Honor your progress through simple rewards.
This simple process is the secret of mastering every aspect of your business. This lack of clarity translates into confusion about what to do and when to do it. The secret of success is to avoid trying to do everything and instead focus on the most important, highest leverage things to improve. This is where you should spend your time. Lean Six Sigma Demystified 20 Improve He who would learn to fly one day must first learn to stand and walk and run and climb and dance; one cannot fly into flying.
Get started, but start simply, inexpensively. Focus in one of two broad areas: 1 eliminating delay using Lean or 2 reducing defects or variation using Six Sigma. Step two. Identify one mission-critical problem to solve. It must be something you can affect directly. Step three. Make the invisible visible. If you want to reduce delay, defects and variation: 1.
H INT Most of the delay occurs between activities. A hospital admission process may take a little more or a little less time. Housekeeping staff may take a little more or a little less time to clean a room. A manager may take a varying amount of time to make a decision. Getting bids for purchases will take varying amounts of time. Getting approvals for purchases takes a widely varying period of time.
A bottling factory may fill each bottle a little more or a little less. An injectionmolding factory may make bottles that are a little bigger or a little smaller, or the neck or caps may be a little bigger or a little smaller. Variations in temperature, pressure, time of day, shift workers or whatever may cause these variations.
Step One. To use them; you just have to know how to read them. Control charts will tell you when something abnormal happens to your process. There are rules built into the QI Macros software that will alert you to each potentially unstable condition so that you can take action.
Step Two. Monitor and sustain the improvement. In the beginning, be patient and open to learning about how these charts will reveal the inner mysteries of how your business works. As they alert you to changes, take action to restore the new, higher level of performance. HONOR In every work, a reward added, makes the pleasure twice as great —Euripides Most businesses are constantly improving, but sometimes we forget to take time to honor our progress.
There will always be more to learn and more to do. What have you learned? Life is often lived in fits and starts, moving ahead and falling back, but in general, with the right set of starting beliefs and values, the quality of life improves. Where were you five or ten years ago? What has improved? What have you let go of that you no longer need? Without rewards, anyone will eventually give up their quest for improvement. Develop a system of rewards and recognition. How will you know what to focus on next? Return to your measurements.
The methods and tools of Lean will help drive dramatic improvements in speed and productivity. The methods and tools of Six Sigma will help drive radical reductions in defects and variation that will improve productivity and profitability. There are a handful of tools that you will need for each of these steps to move from three-to-five sigma.
There are some additional methods and tools that you can use to design innovative products and processes from scratch. As you begin to master the improvement processes, then, and only then, would I like you to consider expanding the scope to include more people and projects to the point that Lean Six Sigma becomes a way of doing business, not just a program of the month or the pet project of a CEO.
The methods and tools are the easy part; changing culture is hard. When you start by creating successful projects and let the corporate grapevine sell Lean Six Sigma for you, it will be easy to change the culture, because the culture will adopt and adapt Lean Six Sigma on its own. Lean Six Sigma will not fix everything about your business. But it is a management system that can improve morale, leadership, and products indirectly. Learning Lean Six Sigma will help you choose and improve your suppliers. It will help you understand and better serve your existing and undiscovered customers.
Take some time to test drive each of the improvement methods and tools. Apply them to your business and your processes. Best of all, these methods and tools have stood the test of time. Lean Six Sigma Demystified 24 In the story was a little different. As customers started to defect, Xerox turned to GE Capital to handle its billing. Using Lean Six Sigma, GE showed Xerox how to find and fix problems as well as eliminate steps from their processes to save time and boost profits. Quiz 1. You can do most of the work with a pad of Post-it notes, a flipchart and some focused attention.
Seems like everywhere you look you see Dell computers or laptops—on airplanes, in retail stores, or business offices. Then, using one-piece flow, Dell builds a custom, made-to-order PC for that customer.
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Traditional batch production manufacturing pushes products to consumers by purchasing parts and assembling products based on forecasted demand. This results in large inventories of finished goods; in this case, computers. Lean Six Sigma Demystified 26 they can maintain little or no inventory. Dell turns over its inventory 80 times a year compared to 10 to 20 times for its competitors. Dell orders parts, suppliers deliver them, and Dell immediately places them in production.
Shippers pick up the finished computers within hours of their completion and deliver them directly to the customer. This strategy minimizes inventory, reduces lead time, and accelerates the introduction of new technology. With less inventory and lower costs driven by this Lean approach to computer manufacturing, Dell can deliver better profit margins than anyone in their industry and pass the savings along to customers. Dell uses the power of Lean.
You can too. The refrigerator, sink, and stove should form a V-shaped work cell. The tighter the V, the less movement is required of the cook. My kitchen looks like the diagram in Figure Food comes out of the refrigerator, gets washed in the sink, cut up on the counter, cooked on the stove, and delivered to the table. Each meal is a small batch or lot. You never cook in batches big enough for the entire week. A trip to the supermarket each week replenishes the limited inventories of raw materials required. Your kitchen is the essence of a Lean production cell.
How can you set up your workplace to use the insights gleaned from your kitchen? The right-sized bread ovens are directly behind the ordering station. The first worker cuts the bread and puts on the cheese and meat; the second worker adds the vegetables and sauces; and the final worker rings up the meal. In contrast, have you ever been to an upscale, but poorly designed fast-food restaurant where you place your order, pay and then stand in a crowd of other people waiting for their sandwich?
A crowd forms right in front of the soda machine or the door to the bathroom creating bottlenecks. This is the essence of Lean production and one-touch, one-piece flow for paperwork. Womack and Daniel T. Jones In a global economy, everyone is competing against the clock. Customers today demand speed and customized solutions. So, speed is critical to your success. The amount of time it takes to deliver a product or service is far greater than the actual time spent adding value to the product or service.
Why does it take so long? The product or service is sitting idle for far too long between steps in the process non—value-added. Examples: A manufacturer of heavy vehicles only spends 2 days assembling a vehicle, but 45 days preparing the order. A claims processing group only spends 7 hours processing a claim, but it takes days for each claim.
Watch your product or service, not your people. The Rule. When you slash your cycle time for your mission-critical processes, you enjoy growth rates three times the industry average and twice the profit margins. Economies of Speed There is always a best way of doing anything. The last item in the batch has to finish before the first item can go on to the next step.
Toyota, for example, can produce up to nine different models of car on the same production line simultaneously and customize each one produced. And it seems to work well. Toyota and Lexus lead in defects per vehicle 25 per cars vs. Lean thinking originated at Toyota with the Toyota Production System. Sakichi Toyoda formulated the original ideas in the s and s.
Taiichi Ohno began to implement these ideas in the s but only made the leap to full implementation in the s. Shelves are restocked as they become depleted. In a pull system, the preceding process must always do what the subsequent process tells it. Lean Six Sigma Demystified 30 The visual ability to see low stock and replenish it became known as the kanban a. This is the essence of a kanban inventory and pull system. Material, parts, and products are impatient. The hardest part of learning to think Lean is abandoning old ideas about economies of scale and mass production.
These batchand-queue push system ideas must be the first casualties of the Lean transformation. In Lean, quality, productivity, and low cost come from producing small batches of a given product, start-to-finish without any piles of partially finished goods. The Lean Process The first step toward breakthrough improvements with Lean starts with reducing the time required to perform your mission critical processes. Analyzing processes to eliminate delay and making them faster follows the FISH process: Focus—to focus the improvement effort on mission-critical business processes and delays.
Improve—to reduce non—value-added NVA delay, waste, and rework.
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Sustain—to stabilize and monitor the improvements. Honor—to recognize, reward, and refocus efforts. Determine value—what does the customer want? The effects of improving speed, quality, and cost leads to higher customer satisfaction, retention, and referrals. All of which lead to growth and profitability. I want it when I want it, not when you can deliver it. Use pull systems—to avoid overproduction. Big inventories of raw materials or finished goods hide problems and inefficiencies. Institute one-piece flow—Make the work flow, so that there are no interruptions, wasted time, or materials.
Level out the workload— hejunka to the rate of customer demand or pull. Stop and fix problems—immediately to get quality right the first time. Standardize—to support improvement. Use visual controls—so that no problems remain hidden. Use only reliable technology—that supports the people and the process. Compete against perfection—not competitors. It was taking 60 hours for a production run to deliver its first finished product big batch sizes cause these delays.
It used to take 3 days and multiple shifts to make phones; they now make per shift. This has reduced inventory costs because components spend one-third less time in the factory. Faster robots on the assembly line were sitting idle waiting on slower robots. Matsushita doubled up on slower robots to feed more quickly the faster ones and increase flow. Despite the faster pace, defects are at an all time low. Matsushita serves 75 different markets and phones alone have over design variations. With over 77 parts for each circuit board, change over from one cell phone to another was taking too long.
Matsushita designed a circuit board that needed far fewer changes per model. Matsushita has seven plants worldwide producing 35 million products a year; so they test new production concepts in the mother plant in Japan and replicate the changes in all of their other plants. Since no two plants are of the same size or shape, it can take up to three months to adapt the changes to fit each plant.
To: When they come, build it fast Lean production. The top priority is to produce products at the rate of customer demand, not to keep workers busy. Sometimes the best thing you can do is to stop making stuff. Finished but unsold inventory is wasteful e. Create only a small inventory of finished goods to level out the production schedule.
The more inventory you maintain, the less likely you will have what you need! Too much inventory creates clutter and hides shortages. In the good old days, you could make and sell products using some sort of strategic planning. Lean Production Mass Production Build to order Make and sell Economies of speed Economies of scale Effective Efficient Pull from customer Push to customer Small lots Large batches Quick changeover Changeover unimportant Production cells that do everything Functional silos and production lines Right-sized machines Big, fast machines Fast to respond Slow to change Adaptive Rigid, inflexible General knowledge Specialized knowledge Lean prizes flexibility and speed.
Mass production focused on the economies of building lots of things at a lower unit price. While a lot of people are worried that American manufacturing is moving overseas, a Lean shop may find it easy to compete with low cost, mass producers who incur shipping costs. If your industry is worried that China will take over your markets, get Lean! The Seven Speed Bumps of Lean The seven speed bumps of Lean focus on non—value-added waste, which includes any activity that absorbs money, time, and people but creates no value.
Toyota describes these as: 1. Over production. The most common type of waste it creates inventories that take up space and capital. Excess inventory. Excess inventory caused by over production is waste. So do your products or services. Are they always waiting for the next value-adding process to start? So do employees. Are they waiting for missing parts or late meeting attendees? Waiting is waste. Unnecessary movement of work products i. Unnecessary movement of employees.
Are employees walking too far to get supplies or deliver a work product? H INT Walking is waste! Unnecessary or incorrect processing. Why have people to watch a machine that can be taught to monitor itself? Why do things that add no value? Is one group doing something that the next group has to correct?
Stop doing the unnecessary and start doing everything right the first time. They lead to repair, rework, or scrap. Lean will help you reduce or eliminate numbers 1 to 6. Six Sigma will help you reduce number 7. Keep only what is needed. Pitch everything else. A place for everything and everything in its place. Clean machines and work area to expose problems.
Develop systems and procedures to monitor conformance to the first three rules. Maintain the standard processes for sorting, straightening and shining. It takes about 4 hours to 5S a sq. Lab workers usually find one to two dumpsters worth of stuff to throw away. Simply put a red tag on it showing the date discarded and put it in a place designated as the red tag room.
That way, other shifts can find and retrieve needed items. This rarely happens. At the end of 30 days, throw it away or donate it to some cause. A key starting point for implementing Lean is the concept of value and the value stream. Value is defined by the customer, not the company, business unit, manager, or employee.
When I worked in information technologies, for example, programmers often focused on cool, new technology, not on what was fast, proven and effective for the customer. Craftsmen bear allegiance to their craft, not to their customer. Since most businesses have grouped work together into functional silos, each silo often skews the definition of value. While each silo attempts to optimize its own operation, the company fails to optimize the overall flow of products and services, which creates tremendous waste.
All of this delay and rework can be eliminated using Lean Six Sigma. Whenever I go in to work with a group on Lean, I start wherever the product starts and follow it around. I ask dumb questions about why things are done this way. Often the team will say it can be done. Then I ask: can we do it now? This is the essence of Lean. The moment you notice one of the seven speed bumps, ask yourself: Can I change this now? If so, just move the machine, tool or material. Most people are surprised when Japanese counselors come into a plant and they just start moving machines into production cells.
Double Your Speed! How long does it take to build a three-bedroom, two-bath, two-car garage house with all of the plumbing, fixtures, paint, carpet, and landscaped yard?
There is an annual contest to build a house as fast as possible. They do it by taking all of the idle time out of the process, combining steps, and getting all of the construction steps in the right order.
Pull versus Push Once you understand what the customer wants, then you can redesign the process to produce it in a way that minimizes time, defects, and cost. The secret is to only produce the product or deliver the service when the customer asks for it. This is the essence of a pull system. When I was 14, my father taught me how to shoot trap. In trap or skeet shooting, you stand at a position, load your shotgun, and shout pull! Then a clay target flies from the trap—left, right, or straight away. Then you do your best to break the target with a single shot. Compare this with mass production that produces large batches of finished inventory in anticipation of future demand.
Instead of producing inventory for projected demand, pull thinking forces you to produce parts and products when the customer actually orders them. If a customer orders a car, for example, it should kick off a series of requests for a frame, doors, tires, engines, etc. In Tokyo, for example, you can place a custom order for a Toyota and have it delivered within 5 days.
Pull means that no one produces anything until a customer downstream asks for it, but when they do, you make it very quickly. Optimally, you would want to build one piece or service one customer at a time. Builds in quality 2. Creates flexibility 3. Increases productivity 4. Frees flow and space 5. Improves safety 6.
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Improves moral 7. The trick is eliminating all of the delay between value-adding steps and lining up all of the machines and processes so that the product or service flows through the value channel without interruption. Mass production and large batches ensure that the product will have to sit patiently waiting for the next step in the process.
The mental shift required to move from mass production to Lean thinking is to focus on continuous flow of small lots. In-store inventories are one eighth of the United States average. The first step is to focus on the part, product, or service itself. Follow the product through its entire production cycle. In a hospital, you would follow a patient through from admission to discharge.
You can use a spaghetti diagram to show the movement of parts, products, and people through the current production maze. The second step is to ignore traditional boundaries, layouts, and so forth. In other words, forget what you know about how to assemble the product or deliver the service. The third step is to realign the workflow into production cells to eliminate delay, rework, and scrap. The fourth step is to right size the machines and technology to support smaller lots, quick changeover, and one-piece flow. This often means using simpler, slower, and less automated machines that may actually be more accurate and reliable.
The goal of flow is to eliminate all delays, interruptions and stoppages, and not to rest until you succeed. CELL DESIGN A cell is a group of workstations, machines or equipment arranged such that a product can be worked progressively from one workstation to another without having to sit and wait for a batch to be completed and without additional handling between operations.
Cells may be dedicated to a process, a subcomponent, or an entire product. Cells can be designed for administrative as well as manufacturing operations. Cell design helps build products with as little waste as possible. Arrange equipment and workstations in a sequence that supports a smooth flow of materials and components through the process, with minimal transport or delay. A work cell contains 3 to 9 people and workstations in a compact U-shaped arrangement Figure Cells ideally manufacture a range of highly similar products.
It should be self-contained with all necessary equipment and resources. The U-shape makes communication easy because operators stay close to each other. This improves quality and speed. Most factory floors and even office floors are organized into functional cells. Functional cells consist of similar equipments and activities. In a factory, a functional cell might include a bank of lathes, or presses, or welders. In the offices of old, there were groups of typists transcribing handwritten documents.
In information systems, there might be groups of system testers. In check processing, there might be huge banks of check sorting machines and clusters of people balancing the amounts in each batch of checks. These functional cells do not serve to create a Lean environment. Remember Matsushita? The only way to produce the first phone in 40 minutes versus 3 days is to organize into cells that do everything.
Some emergency rooms are using point-of-care lab testing.