6 Sigma & Lean Sigma
6-Sigma uses statistical inference in a disciplined manner, a data-driven methodology specifically aimed at reducing variation, predicting probability and eliminating defects. Lean by comparison is a data driven methodology, focusing on the elimination of waste through team-based activities. Lean incorporates many tools including six sigma. By combining the two approaches, especially in mature continuously improving organizations creates the most productive methodology.
· Founding Lean Principles
Toyota is well documented as the founder of "Lean Thinking", which has been adopted by many organizations including Manufacturing, Service and Public sectors globally. While 6-Sigma was originally developed by Motorola and further developed by GE it is being employed in many Global companies such as 3M, Apple Computers, Caterpillar, Ford and Xerox to name but a few.
· Lean Enterprise
All organizations regardless of the type of business deploy processes, procedures and systems to fulfill customer requirements. A Lean Enterprise applies Lean Principles to every facet of the organization ensuring that products or services exceed customer expectations relative to Quality, Cost/Value and Delivery Time, while simultaneously improving employee satisfaction and the working environment. It is about people and processes continually and sustainably adding value to products or services.
· Value
Commonly described as what the customer is willing to pay for. That is processes that change the product or service positively towards the customer's expectations.
· Value Stream
An unimpeded sequence of processes that deliver value to the customer. The Value Stream commences with an order and flows through the complete supply chain, to the delivery of the goods or service. (May include payment)
· Flow
Movement between value adding processes without delay or interruption.
· Pull
Triggering a process as customer demand requires it. Each process reacts to a downstream trigger for replenishment. As the internal and external customers consume their supply, at the planned level, they trigger an upstream process to replenish.
5 Why's
An acronym for root causes analyses. The practice of asking why 5 times when presented with a problem to try to identify potential root causes.
5S
An acronym to present the 5 topics for a highly organised, orderly, clean, safe and standardised workplace. The stages of 5S are Sort, Set in Order, Shine, Standardise and Sustain.
ABC Production Analysis
Based on Pareto affect, if 80% of your inventory dollars is in 20% of your inventory item types, then we should afford more attention to those 20% for accuracy and reduction. B items maybe 15% of dollars for 40 % of items and C maybe 5% of your dollars is in 40% of your items so why count them all regularly. Infers counting A items regularly for maximum result.
Acceptable Productivity Level (APL)
A workplace and output level established by management or with employees as the level of output per resource investment that is acceptable.
Activity-based costing
An accounting system that assigns costs to products based on the amount of resources used to design order or make a product.
Automatic Line Stop
Built in Quality (Jidoka) and Mistake Proofing (Poka Yoke) to ensure processes stop whenever a defect or non standard condition occurs. Often referred to Autonomation, where the human element is built into automation.
Andon
The Japanese word for lantern. An Andon signal today usually combines a visual and audible signal indicating to employees and supervision that attention is required to an area, process or within a process. Andons can signal we need replenishment, we are about to stop, we have stopped, breakdowns, quality issues, safety issues, cranes, temperature, pressure etc, etc.
Assemble to Order
Where products or services are assembled or provided upon receipt of a customer's order. Their will a number of items ready to make a whole product or service that are assembled when the order arrives, it can be assembled quickly and to the exact customer's specification.
Autonomation
A term developed by Taiichi Ohno to describe "automation with a human touch". Autonomated machines will stop when abnormalities occur so that they will not create large amounts of scrap and do not need an operator to watch the machine.
Bottleneck
Any process or resource whose capacity for work is less than the demand required.
Balance Chart
A stacked bar chart that illustrates work content per operator and/or machine. Is used extensively to create the best balance work for operators or machines in order to achieve improvements in flow. Balance charts have a close relationship with Takt Time.
Balanced Workplace
A workplace where capacity of resources are balanced exactly with market demands.
Batch and Queue
Typical mass production methodology working on economies of scale and high focus on utilisation. Traditionally work going through a system will be produced in large batches to maximise "efficiency" and then sit in a queue waiting for the next operation.
Batch-and-Queue
Producing more than one piece of an item and then moving those items forward to the next operation before actually needed. Thus, items need to wait in a queue.
Benchmarking
The process of measuring products, services, and practices against those of leading companies.
Best-in-Class
A best-known example of performance in a particular operation. One needs to define both the class and the operation to avoid using the term loosely.
Blitz
A blitz is a fast and focused process for improving some component of business a service or product line, a machine, or a process. It utilises a cross-functional team of employees for a quick problem-solving exercise, where they focus on designing solutions to meet some well-defined goals. Often called Kaizen Blitz
Brownfield
A Brownfield site is an existing facility that is usually designed traditionally for mass production methods, functionally layed out and difficult to optimise for lean flow.
Build to Order
A processing environment where a product or service is completed in entirety after receipt of a customer's order.
Capital Linearity
A philosophy linked to capital expenditure for equipment such that maybe the required additional capacity and an increase in flexibility can be added by using a number of smaller machines rather than one big and very expensive machine.
Current State Map
Helps visualise the current production process and identify sources of waste. The foundation from which we improve.
Continuous Flow
Processing of items seamlessly flowing from one work station to the next without queues, with none or little inventory between stations to complete an entire item of partially. Each processing step completes its work just in time before the next process needs the item.
Capacity Constraint
Where processes which are not bottlenecks are arranged in such sequence, batches, schedules that they constrain flow.
Cell
An arrangement of people, machines, materials and equipment--with the processing steps placed right next to each other in sequential order--through which parts are processed in a continuous flow. The most common cell layout is a U shape.
Change Agent
A highly motivated force that moves areas, whole organisations and value streams to improve and change positively. Consistently questioning the current state of work activity toward a future improved state.
Constraint
Is anything that limits processes, systems or people from achieving higher performance or output. See Bottleneck.
Critical Path
A series of activities that have to be consecutive as the next step cannot proceed until the preceding step is completed. Generally represent the longest time path through the process.
Cycle Efficiency (CE)
CE is a measure of the relative efficiency in a processing system. It represents the percentage of value added time of a product through the critical path vs. the total cycle time (TCT). Also referred to as the velocity of VA to NVA.
Cycle Time Interval
The frequency that a particular item is made during a set period of time.
Dependent events
Events that can only occur after a previous event
Demand
The sales or consumption of an item over a period of time including seasonal variation. Analysis includes gaining an understanding of the customer's requirements for quality, lead-time and price.
DMAIC
A Six Sigma acronym used to systematically approach workplace improvement and change. Define, Measure, Analyse, Implement and Control
Eighth Waste
In modern times we refer to the 8 wastes of lean, with the 8th waste being the under utilising of the collective brain power and energy of our employees and suppliers. "No one of us is as smart as all of us."
Engineer to Order
Products or services where customer's requirements are generally unique from one order to the next therefore they are engineered from a low risk level. This can mean entirely or from a modular or component level upon receipt of an order.
External Setup (SMED)
Known as outer exchange of die (OED). These are work elements during a changeover from one item to the next that can be performed whilst the process is still in motion. They can be carried out externally without stopping the process.
Feeder lines
A series of special processes that allow pre-processing tasks off the main work flow.
FIFO
An inventory and workflow methodology that employs systems and unique work storage hardware to ensure FIRST IN FIRST OUT. (reduces shelf storage times) Usually includes strategically sized inventory that keeps the sequence of the production uniform throughout the value stream maintaining flow. Has a Reliance on pitch time and material handling milk runs.
Finish to Order
Products and Services designed in such a way that uniqueness processing is left to the final stages of processing. Finishing to order then has the unique stages completed to each customer requirement.
Functional Layout
The practice of grouping machines or activities by type of operation performed.
Future State Map
A blueprint for lean implementation. Your organisation¹s vision or process intent, which forms the basis of your implementation plan by helping to design how the process should operate.
Gemba
Japanese term used to describe the "actual place" where value is added or the shop floor. Toyota and Lean are most famous for the "Go to Gemba" and find what is really happening approach.
Greenfield
A new production facility not restricted by practices of the past therefore having ability to design for workflow and a culture of adapting change without resistance.
Heijunka
Levelling work flow by value stream and quantity over a fixed time period. This is necessary to ensure JIT, work flow optimisation and work balance Takt Time can be established.
Hoshin Kanri
Working to select goals, projects, achieving goals and designation of people, resources and establishment of project metrics.
Hoshin
The Japanese work for Planning and used throughout operational, financial, strategic, and project based scenarios.
Value Stream Map
A visual representation of the aggregated material and information flows within a company or business unit.
Inspection
Mass production would use inspectors after the fact. Lean producers assign the responsibility of quality to the areas where the processes are performed. Inspections are performed within the areas that own the assembly process. Inspection. Comparing items or information against specifications and standards to determine if it meets requirements.
Internal Setup (SMED)
Often referred to as Inner Exchange of Die (IED). These are the changeover work elements that have to be performed with the process stopped.
Inventory
The money the system has invested in purchasing things it intends to sell.
Inventory Turns
A measure to quantify the pace at which inventory rotates throughout a company. Inventory turns = annual cost of goods sold / average value of inventory during year.
Jishuken
A Japanese word used to describe a "hands-on learning workshop"
Jidoka
Quality built into processes such that if a process is not capable of creating the required output then it will not operate until it can.
Just in Time (JIT)
Producing and conveying only the items needed by the downstream process when they are needed and in the quantity needed.
Kaikaku
Radical improvement designed to quickly eliminate and/or add value to a value stream. Also described as Breakthrough Kaizen.
Kaizen
Incremental change for the better. The organised use of common sense to improve cost, quality, delivery, safety and responsiveness to customer needs.
Kaizen Event
Part of a continuous improvement program. A focused, dedicated and well defined event that is used to get quick hit value by implementing "do-now" solutions leading to waste elimination.
Kanban
A signal designed to specify what and when to produce or withdraw items within a pull system.
Kanban Post
A storage container for Kanban cards pulling deliveries.
Kitting
A process in which employees are supplied with work ready kits to complete their process. This eliminates time-consuming trips from one location to the next for all of the information and items required to complete their task. Also kitting is used to complete customer orders from warehouse stock.
Labour Linearity
A manning philosophy such that as demand increases or reduces manpower is added one at a time as such manpower requirements are linear to production volume.
Lead-Time
The total time from the beginning of the supply chain to the time something needs to ship. The sum of the VA/NVA time for a product to move through the entire value stream.
Lean
A business improvement strategy relentlessly focussing on reducing waste within a system. Producing the maximum sellable items or services at the lowest operational cost, while optimising resources and inventory levels.
Lean Manufacturing
A manufacturing philosophy that shortens the time between the customer order and the product build and shipment by eliminating sources of waste. It attacks waste within a plant or process; waste elimination results in cost reduction.
Lean Transactional
The application of Lean to business processes such as paperwork flow through an office in accounts or marketing.
Level Selling
The elimination of sales spikes generated by end of month sales targets at dealers and so forth. This allows for improved flow of demand from the customer and improvements in anticipated demand.
Machine Cycle Time
The amount of time unit spends in the operational cycle of a machine
Management by Walking Around (MBWA) - Go to Gemba
These are practices whereby managers frequent the workplace where they have direct responsibility, discussing work with employees, challenging non value adding activities and performance at the coal face.
Margin of Safety
A boundary from which the customer, organisation, people, plant and equipment maybe adversely affected. Can be a margin of safety issue associated with the safety and health of people, continuous supply, reliability, capacity, quality and environmental conditions.
Mean
The statistical measure on a sample that is used as an estimate of the mean of the population from which the sample was drawn. Numerically equals the sum of scores divided by the number of samples.
Milk Run
Reducing transport costs and batch sizes by performing multiple pick up and drops at multiple suppliers using one truck.
Muda
The Japanese word for waste or Non-Value Added activity.
Mura
The Japanese word used to describe variation or fluctuation.
Muri
The Japanese word used to describe overburdening or strain/stress.
Nemawashi
A Japanese expression used to describe the practice of obtaining support and buy-in for change by firstly the idea and then the plan with upper management and stakeholders. Directly translated means "preparing the ground for planting".
Necessary Non Value Added
These are non value added (See NVA) steps in a process that are necessary due to economics and other constraints such as cannot move physical locations of buildings, cannot supply every employee with a photocopier, cannot have a pharmacy on every floor of a hospital.
Non-Value-Added Activity (NVA)
An activity that takes time, resources or space that does not add value to the product itself. The activity may be necessary however the customer is not willing to pay for it.
One Piece Flow
Making and moving only one piece or part at a time. See Continuous Flow
Operator Cycle Time
The time it takes an operator to go through all of his or her work elements before repeating them.
Order Interval
Represents the frequency (days) that a part is ordered.
Operations
Work or steps taken to transform material from raw materials to finished product.
Overall Equipment Effectiveness (OEE)
A total productive maintenance (TPM) measure of how effectively equipment is being used. OEE = availability rate x performance rate x quality rate.
Overproduction
This was considered by Taiichi Ohno to be the worst type of waste as it creates and hides all other wastes.
Pacemaker
The only point in the process that is scheduled and therefore dictates the pace of a whole system of processes.
Pacesetter
The point in the process that limits the output of the total process.
Plan, Do, Check, Act (PDCA)
An improvement cycle introduced to the Japanese in the 50's by W. Edwards Deming. Based upon proposing then implementing an improvement, then measuring the results and acting accordingly.
Plan for Every Part (PFEP)
A comprehensive plan for each part consumed within a process. This would take the form of a spreadsheet or simple table and contain such data as pack-out quantity, dimensions, location of use and storage, order frequency and so on. This provides one accurate source of information relating to parts.
Pitch
The amount of time required by a process area to process one set or package increment / container of products. Takt time x pack-out qty = pitch
Poka-Yoke
A mistake proofing method or device to prevent errors from occurring during the process.
Perfection
Always optimizing value-added activities and eliminating waste.
Process Kaizen
Improvements made at an individual process or in a specific area. Sometimes called "point kaizen".
Processing Time
The time a product is actually being worked on in a machine or work area. PULL: A system of cascading production and delivery instructions from downstream to upstream activities in which the upstream supplier waits until the downstream customer signals a need. A pull system means producing only what has been consumed by downstream activities or customers.
Policy Deployment
Setting a series of goals, implementing projects to achieve the goals, designation of people and resources for project completion, and using project metrics.
Problem Solving Task
Assignment and delivery of taking an issue, concept or problem in part or in full, through a system of planning, problem solving, risk assessment, change management through to process, product or service launch.
Preventive Action
Is the activity and actions put in place to totally eliminate the potential for failure, non conformance, defects, breakdowns, accidents, prosecution etc and to prevent any likelihood of re-occurrence.
Process Capability
Process capability is a statistical measure of the process's tendency to vary for a given sample and particular period, with the variation expressed in sigma or standard deviations and directly compared to the acceptable specification limits. The capability requirement is usually stated as a number of standard deviations or sigma capability index. (Usually also required is Cp and Cpk index)
Point of use
A technique that ensures people have exactly what they need to do their job--the right work instructions, parts, tools and equipment--where and when they need them.
Production Kanban
A visual signal to specify the items and quantity that an upstream process must produce to meet demand just in time.
Pull
Material flow triggered by an actual customer need rather than a forecasted schedule. Downstream processes signal to upstream processes exactly what is required and in what quantity.
Push
The production of goods regardless of demand or downstream need, usually to forecasts and in large batches to ensure "efficiency". (Traditional Mass Mindset)
Operating Expenses
The money required the system to convert inventory into throughput.
Quality
Meeting expectation and requirements, stated and un-stated, of internal and most of all the end customer.
Quality Function Deployment (QFD)
Using cross-functional teams to reach consensus that final customer specifications are incorporated in a cascading way through the value stream.
Queue Time
The time a product spends in a line awaiting the next design, order processing, or fabrication step.
Red Tag
A visual method used to easily identify unnecessary items in a workplace. Items that are not needed for completing a job are moved to a holding area, sorted, and then stored or discarded depending on their determined need for completing a job. (See 5S)
Reengineering
The engine that drives Time-Based Competition. To gain speed, firms must apply the principles of reengineering to rethink and redesign every process and move it closer to the customer.
Response Time
The time it takes to satisfy an order
Resource Utilisation
Optimising the use of resources to increase value to customers and increase output.
Right Size
Matching plant and equipment capacity to demand, space, layout and lean processing.
Standard Work
Specifying tasks to the best way to get the process completed in the amount of time available (Takt time) while ensuring the work is completed right the first time, every time.
Statistical Fluctuations or Spikes
Information and data that cannot be precisely predicted. Have special causes and un-natural occurrences.
Sub - Optimisation
A condition where gains made in one activity are often offset by losses in another activity or activities, created by the same actions creating gains only in the first activity.
Safety Stock
Inventory held to compensate for unpredictable variation in demand, supply, quality and downtime.
Sensei
Japanese word for "teacher" and denotes mastery within their field of knowledge. A Lean Sensei should be a wise and easily understood mentor that guides thinking with his subjects rather than dictates the point so as to promote learning.
Set-up Time
The amount of time required to changeover a process after producing the last good item to the first different good item.
Sequential Changeover
When a changeover time is within Takt time, changeovers can be performed one after another in a flow line. Sequential changeover assures that the lost time for each process in the line is minimised to one Takt beat. A set-up team or expert follows the operator, so that by the time the operator has made one round of the flow line (at Takt time), it has been completely changed over to the next item.
Seven Wastes
Are identified in Lean as Overproduction, Excessive Inventory, Unnecessary, Conveyance, Over Processing, Excessive Motion, Waiting, and Corrections.
Signal Kanban
A visual signal that triggers an upstream process to produce, when a minimum quantity is reached at the downstream process.
Single Minute Exchange of Die (SMED)
A technique to reduce setup or changeover times to eliminate the need to process in batches.
Spaghetti Chart
A visual chart showing the path taken by a product or a person during a process to highlight excessive motion.
Standardised Work
A defined work method that describes the proper workstation, tools, sequence of work, the standards required, quality, standard inventory, performance indicators and skills required.
SIPOC Diagram
The SIPOC (supplier-input-process-output-customer) diagram is a tool used in the Lean and Six Sigma methodology to identify all relevant elements of a process improvement project and to narrow the scope of a complexity before the work begins.
Standard work instructions
A lean tool that enables employees to work to good proven work practices as the foundation from which we continuously improve. It ensures that the quality level is understood and serves as the training aid. It enables absentee replacement individuals to easily adapt and perform the assembly operation.
Swim Lane Map
A process mapping variance used to study a process involving more than three functional areas, illustrating "who does what" in a given process. The swim lane map is a useful tool for effectively showing interruptions to a process due to handoffs between functions, transportation, queues and rework involved in a process. (Used where there are many levels of functional constraints)
Supermarket
A strategically controlled storage system, using visual replenishment systems, FIFO and JIT to meet demand of downstream processes.
Takt Time
The pace at which operational value streams have to meet customer demand. Value Stream Takt = Available Time / Customer Orders
Theory of Constraints
A lean management philosophy that stresses removal of constraints to increase throughput while decreasing inventory and operating expenses.
Throughput
The rate the system generates money through sales.
Total Cycle Time (TCT)
The time taken from work order release into a value stream until completion / movement of product into shipping / finished goods. From order to shipment and may include logistics delivery.
Total Productive Maintenance
A means where all employees contribute to maximising processing efficiency by analysing and eliminating down-time through up-front maintenance of plant and equipment.
Toyota Production System
The system developed and used by Toyota which engages all employees in the elimination of waste throughout the value stream.
Two Bin System
A visually managed fixed order system in which supply and demand is triggered by a two bin system. Replacement is triggered when the first bin is empty. When replenished the two bins are filled and so the cycle goes on. The terms are also loosely used for fixed ordering systems not using two bins but using similar methodology.
Value Added Activity
Any activity that changes the product in terms of fit, form or function towards something that a customer is willing to pay for.
Value Added Time
The time expended in value added activity to produce a unit. Time for those work elements that transform the product in a way for which the customer is willing to pay for.
Value Analysis
The analysing of a series of linked processes or value stream to identify the value added and non value added activities. A ratio is drawn from these to establish the value streams lean velocity.
Value Stream Map
A visual representation of a process showing flow of information and material through all the steps from the supplier to the customer.
Visual Control
Displaying the status of an activity so every employee can see it and take appropriate action. (See Andon)
Visualisation
The design of a workplace such that problems and issues can be identified without timely and in depth investigation. Truly visual work-places should be capable of assessment in seconds.
Waste
Any activity that consumes valuable resources without creating customer value.
Work-in-Process (WIP)
Any inventory between raw materials and finished goods.
Work Cells
An arrangement of people, machines, materials and methods such that processing steps are adjacent and in sequential order thus parts can be processed one at a time.
Yield
Output from a process related to expectations of capacity, cycle time, input consumption, work hours and quality.
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