DSC2006/DAO2703

 Module Objectives:
1. Raise your awareness and interests in M
2. Introduce concepts, theories, and tools of TM

 Today’s Outline
 Introduce process improvement with Lean Six Sigma
 Introduce sustainable M

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 Overview: Process Theory
 Continuous process improvement
 How is the process doing?
 Define flow unit and draw process flow diagram and identify process types
 Assessing process efficiency
 Capacity (resource, process, bottleneck): productivity of time
 Flow rate and cycle time (at steady state)
 Capacity utilization and other such as Labor/machine utilization
 Assessing process effectiveness
 Flow time (includes waiting time) and inventory (includes queue length)
 Quality
 How can it (the process) do better?
 Process improvement through
 Product and process technology innovation
 Bottleneck analysis and capacity improvement
 Line balance and cycle time reduction
 Batch size decision and setup/changeover time reduction
 Assigning and sequencing jobs so to better utilizing resources
 Measuring and reducing waiting time of flow units
 Manage quality with process control and process capability
 Lean Six Sigma
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 Introduce 6s Quality
 Originally developed in 1986 by Motorola, the business management
strategy is now used in many different industries in an effort to improve
the quality of products or services produced by the business through the
removal of defects and errors. The strategy involves creating groups of
people within the business or organization who have expert status in
various methods, and then each project is carried out according to a set of
steps in an effort to reach specific financial milestones. A six sigma process
is defined as one in which 99.99966% of products created are expected to
be statistically free from defects. Also called Lean Six Sigma. by
BusinessDictionary.com
 Statistically: having no more than 3.4 defects per million
 Conceptually: programs designed to reduce defects and improve yields
 Objective: improving quality, reducing costs, and increasing customer
satisfaction

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 6s Quality
 Statistically
 Process capability is improved to an extent that the specification range,
USL to LSL, can capture process variability range m±6σ. As a result,
when a process is perfectly centered, we have Cp = 2.0 ( >> 1.33) and
there will be only 1.98 defective parts per billion.

LSL
USL
• Z=-6 • Z=6
• F(z) = 0.00000000099 • F(z) = 0.00000000099

m - 6s -3σ m +3s m + 6s

F(-3.99) = 0.0033% F(3.99) = 0.0033%

-3.99σ’ -3σ’ m +3s’ +3.99σ’

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 6s Quality
 Statistically
 When a process is not centered, assuming the mid-point of LSL and USL
to be 1.5s away from the process mean m (below is an example that it is
to the right of process mean, so LSL is tighter), we then have Cpk = 1.5 ( >
1.33) and there will be only 3.4 defective parts per million.

off-center by 1.5s

LSL
USL
• Z = -4.5 • Z= 7.5
• F(z) = 0.0000034 • F(z) = 0.0000000000

m - 4.5s -3σ m +3s m + 7.5s

F(-3.99) = 0.0033% F(5.49) = 0.0000%

-3.99σ -3σ m +3s +5.49σ

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 Introduce Lean Operations
 Lean operations began as lean manufacturing, also known as JIT in the mid-
1900s. Developed by Taiichi Ohno and Shigeo Ohno of Toyota, Japan
 Lean processes (or systems) have three basic elements:
1. Focused on waste reduction, especially excess inventory

2. Demand driven: make the system flexible

3. Has a culture dedicated to excellence and continuous improvement

 Seven sources of waste in lean systems:
1. Excess Inventory
2. Overproduction
3. Waiting time
4. Unnecessary transporting
5. Processing waste
6. Product defects
7. Inefficient work methods

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 How to be Lean?
Balance the process
 Introduce Takt time
 The cycle time needed to match customer demand for final product
 Sometimes it is referred to as the heartbeat of a lean system
 Takt time is often set for a work shift
 Procedure:
1. Determine the net time available per shift
2. If there is more than one shift per day, multiply the net time by the
number of shifts
3. Compute the takt time by dividing the net available time by demand

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 How to be Lean?
Reduce Batch (lot) size
 Benefits of small batch (lot) size
 Reduced in-process inventory (WIP)
 Lower holding inventory costs
 Less storage space
 Increased ease of balancing operations
 Increased visibility of problems
 Permits greater flexibility in scheduling
 Inspection and rework costs are less when problems with quality occurs
 Less inventory to ‘work off’ before implementing product improvements
 Setup Time Reduction
 Large batch size is the result of long setup time
 Small lot sizes and changing product mixes require frequent setups
 Unless these setups are quick and relatively inexpensive, they can be prohibitive
 Setup time reduction requires deliberate improvement efforts
 Single-minute exchange of die (SMED): A system for reducing changeover time
 Group technology may be used to reduce setup time by capitalizing on similarities in recurring operations

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 Group Technology
 One characteristic of lean production systems is multiple
flexible manufacturing cells supported by group technology
 A group of machines designed to handle intermittent processing
requirements and produce a variety of similar products
 Includes supervisory computer control, automatic material handling,
and robots or other automated processing equipment such as CAM &
CIM (NC: CNC & DNC)
 Benefits include
 Reduced changeover times
 High equipment utilization
 Ease of cross-training workers

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 How to be Lean?
 Quality Improvement
 Quality defects during the process can disrupt operations
 Autonomation (jidoka) 自働(動)化
 Automatic detection of defects during production
 Two mechanisms are employed
 One for detecting defects when they occur
 Another for stopping production to correct the cause of the defects

 Poka-yoke (Fail safe)

 Building safeguards into a process to reduce or eliminate the
potential for errors during a process
 Examples
 Electric breakers
 Seatbelt fastener warnings
 ATMs that signal if a card is let in a machine
 Designing parts that can only be assembled in one position

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 How to be Lean?
 Pull using Kanban Cards (Visual Systems)
 Card or other device that communicates demand for work or materials
from the preceding station
 Kanban is the Japanese word meaning “signal” or “visible record”
 It can be paperless production control system
 Authority to pull, or produce, comes from a downstream process

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 Toyota Production System: Lean Operations
 A flexible processes (or system of operations) that strives
to use considerably less resources and yet to achieve
 Shorter cycle times
 Higher quality
 Lower inventory level
 Lower overall costs
 Greater productivity
 …
 The ultimate goal is to have a balanced system/process that
can achieve smooth and rapid flow of
materials/parts/products to match supply to customer
demand
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 Lean Implementations
 ‘Romantic’ Just-In-Time
 JIT is the One True Path to manufacturing enlightenment
 JIT is simple and you can implement it over the weekend
 The goal of JIT is “zero inventory”
 Used to be synonymous with JIT
 Inventory is evil, don't even think about using the “t-word” in planning
 ‘Pragmatic’ Just-In-Time
 One form of waste is inventory, why do inventories exist?
 economies of scale, speculation, uncertainty (in demand, supply, capacity and quality)
 These characteristics prevent a smooth flow of product – result in “kinks” in the process
 JIT seeks to eliminate these kinks and smooth out the flow.
 Don’t eliminate inventory without first solving the underlying problem!
 Make the problem go away
 Reduce setup times, remove uncertainty, improve quality, etc.
 Simple, but not Easy.

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 Lean Implementations
 Prepare for obstacles
 Management may not be fully committed or willing to devote the necessary resources to conversion
 Workers/management may not be cooperative
 It can be difficult to change the organizational culture to one consistent with the lean philosophy
 Suppliers may resist
 Common Problems Associated with JIT Implementations
 52% - Cultural Resistance to Change
 31% - Lack of Resources
 14% - Lack of Top Management Understanding or Commitment
 Transitioning to Lean Systems
 Make sure top management is committed and that they know what will be required
 Decide which system/process will need the most effort to convert
 Obtain support and cooperation of workers
 Begin by trying to reduce setup times while maintaining the current system
 Gradually convert operations, begin at the end and work backwards
 Convert suppliers to JIT

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 Sustainable Operations Management (SM)
 Components of sustainable operations
 Purchasing: selecting and developing suppliers with small footprints, i.e.
Green purchasing and inbound logistics
 Product design: use of life cycle assessment (LCA) to reduce
environmental impact and Design for Environment (DfE), i.e. Green
product design
 Process: cleaner and more resource-efficient process and green
technologies
 By-product management: eliminate or find alternative use, especially waste
materials management throughout the process
 Green Supply Chain Management: Green outbound and reverse logistics
 Product life extension and end-of-life recovery: refurbishing, remanufacturing,
recycling, including waste management

DSC3226: SM

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 Today’s Learning Points
 To be able to understand and articulate
 Six Sigma Quality
 The characteristics of Six Sigma Lean operations
 Balance
 Small Lot size and setup time reduction
 Quality improvement and Poka-yoke
 Pull
 Sustainable M
 Green: purchasing, product design, process and supply chain

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