Lean & Kaizen

What is Lean

Lean is a systematic methodology to maximize value added work by:

1. Removing waste and reducing process cost

2. Accelerating process velocity (reducing cycle time)
3. Improving process quality (by reducing opportunity for defects related to
non-value added activities)

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What is Six Sigma?
Six Sigma is a proven, data-driven and structured process improvement
methodology for sustainable business improvement driven by business and
customer expectations
Business philosophy and strategy
implemented and used by world class companies

? Structured problem-solving methodology

for efficient and effective problem solving

Six Sigma...
Data-driven decision process
...has many Objects which cannot be measured cannot be controlled

meanings Statistical degree of process capability

Six Sigma: 3.4 dpmo (defects per million opportunities) or a yield of 99.99967 %

Six Sigma is a strategy, a methodology, and a measurement!

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Kaizen, Lean, and Six Sigma: How they fit together

Methodology Focus Approach

Lean Reduce • Daily Kaizen

(quick wins)
Waste
• Lean projects*

Continuous
Improvement
Six Sigma Reduce DMAIC Projects*:
• Green Belt
Variation
• Black Belt

*Note: Lean & DMAIC projects can be accelerated using an approach called Kaizen Events (also called Kaizen Blitz
or Kaizen Breakthrough)

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Cost Plus vs. Cost Reduction Principle: Which is better?

Cost Plus Principle: Encourages increase in Sales Price to increase profitability

profit
sales Traditional Approach
price
cost

Cost Reduction Principle: Encourages reduction in Cost to increase profitability

profit
sales Lean Approach
cost price

Cost Reduction Principle is better because it allows the Sales Price to better align with
Market demand. Remember, Market dictates the Price, not the Producer!

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How does Lean Six Sigma improve overall business profitability?

LEAN SIX SIGMA

By Eliminating Waste By Reducing Variation

improved cycle time reduced cost of poor quality

improved process quality Improved product & process quality

+

Reduced operating costs improved bottom-line Improved

Improved customer satisfaction increased revenues Profitability

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Value Stream

A value stream is the set of an organization’s processes required to

develop a product or service from initial concept up to final delivery to the
customer

Concept Procure Distribute

Develop Provide Consume

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Value vs. Waste
90 +% of any process is wasted time or activity

Two things are always happening in any process in the value stream:

1.Things that should be done VALUE

2.Things that should not be done WASTE

Activities that consume resources but create no value = Waste

Before Value-added work

Non value-added work
After
Time

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Value is Defined by the Customer

Customer Value-Added Business Value-added

An activity is customer value-added only if:
•The customer recognizes the value and is willing to pay
for it
•It transforms the product into something that meets
customer requirements
•It is done right the first time
An activity is business-value added if, it is:
• Required to sustain the workplace ability to
perform customer value-added activities.
• Required by contract or other laws and regulation.
• Required for health, safety, environmental, or
personnel development reasons.

“Business Value-Added”
may not be Customer Value-Added

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Exercise: Identify Waste (1/2)
Example: Changing tires on a race car

Instructions:
Identify the VA activities in
the tire changing process.

Time to complete: 5 minutes

VA – Value Added
Example: Changing tires on a racing car at pit stop
Identify non-value added (waste) activities

Value Added?

__X___ 1. Walk to tool section to get jack

__X___ 2. Search for jack
__X___ 3. Walk back with jack
_____ 4. Use jack to raise the car
__X___ 5. Search for lug wrench
_____ 6. Remove lug nuts
_____ 7. Remove tire
__X___ 8. Walk over and get fresh tire
_____ 9. Replace tire
_____ 10. Replace lug nuts
__X___ 11. Wait until car has been filled with gas Value Stream Mapping
12. Lower car

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 Map & Measure Value
Value Stream Map for Transactional Process Stream
Nokia Example

Number of process steps reduced by 50%.

Number of CVA and BVA activities is 13 which covers 87% of all
steps.
Before streamlining, CVA and BVA activities covered 35%.

Future State
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Video
Racing Car Pit Stop

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Eight Types of Waste
(D.O.W.N.T.I.M.E.)

Not Utilizing
Defects Overproduction Waiting Employee Skills

Excess
Transportation Inventory Motion
processing
Each of© the 8 wastes is either a waste of Quality, Quantity, or People
Nokia 2014 - Lean Six Sigma Champions Training Version 0.17 - Quality
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Defects
Waste of Quality

Defective work or excessively checking work

Examples
• Operations
- Out of specification parts
- Processing error
• Product Development
- Inaccurate information
- Conversion errors
• Administrative
- Report error
- Incompleteor bad information
Lean Six Sigma Mentality … Built-In Quality
Never pass defectsdownstream
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Overproduction
Waste of Quantity

Creating parts ahead of schedule (vs. just-in-time)

Examples
• Operations
- Produce more than the customer requires
- Push production
• Product Development
- Extra features Produce or Order Only What is Needed,
- Requirements churn When it is Needed,
• Administrative
and in the Quantity Needed !
- Reports not acted upon

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Waiting
Waste of People

Waiting for previous process

Examples
• Operations
- Waiting for machine
- Waiting for previous process
• Product Development
- Delays
- Information unavailable
• Administrative
- Waiting for decisions
- Waiting for shared resources
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Not utilizing Employee Skills
Waste of People

• Under-skilled
• Over-skilled
• Not seeing employees as true process experts
• People told what to do, and not asked what they
think
• Not involving employees in finding solutions;
opportunities to improve processes are missed
• No opportunity to allow employees to contribute
everyday

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Transporting
Waste of Quantity

Unnecessary movement of product, service, and/or equipment

Examples
- Operations
• Poor plant layout
- Product Development
• Handoffs
• Multiple sources
- Administrative
• Poor office layout
Transporting adds cost, not value!
• Not co-located

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Inventory
Waste of Quantity

Holding extra material on shelves, racks, and floors. Could also be extra reports, or extra
storage of data.
Examples
- Operations
• Safety stock on all parts
- Product Development
• Partially done work
• Too much information
• Too many databases
- Administrative Efficient Use of Inventory …
• Partially done work Not Just-in-Case Inventory

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Motion
Waste of People

Motion that does not add value to the process

Examples
• Operations:
- Sitting, bending, walking
Searching Sitting
• Product Development: Walking
- Task switching
- Searching for information
• Administrative Choosing
Bending over
- Searching Minimize Wasteful Movements
- Choosing
Movement Work
- Extra key strokes / clicks
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Excess Processing
Waste of Quantity and People

Non-standard work, unnecessary processing

Examples
• Operations
- Hand finish
• Product Development
- Re-learning
- Data conversions
• Administrative Eliminate
- Too many signatures Excess
Work !
- Tasks not simplified

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What is the mother of all Wastes?

Overproduction causes other wastes (waiting, transportation, motion,

inventory, defects)

Slow down & balance processes whose capacity exceeds customer

requirement use MIN & MAX levels
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What is Kaizen?

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The Kaizen philosophy
Kaizen as an overarching philosophy to eliminate waste, improve quality, and
execute continuous improvement

improvement
Kaizen way
Kaizen means continuous improvement
Develop processes,
teams and strategy
everybody is involved Develop
on a everyday basis processes with
automation and
to improve everywhere investment

to focus on work that creates value add by

reducing unnecessary activities traditional way

time

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How do we apply Kaizen in practice?
A repetitive cycle of observation, analysis, implementation leading to continuous
improvement

The Kaizen principle states

Go to where the value is being added Observe the work and value
Check the actual things Grasp what is actually happening
Confirm the facts by real experience Do not trust on reports

Sequence of
Kaizen process Observation Analysis Implementation
assessment

• Observation of actual • Examination of each process • Give hands-on advice how to

processes on site step
• Comprehensive record of all • Creating of new process
activities sequence by eliminating non-
value-adding activities
(“waste”)
reduce non-value-adding
activities
• Introduce tools to improve
working conditions

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Kaizen requires an organizational culture change
A philosophy for continuous improvement involving the entire organization at all
levels of the hierarchy

• Apply Kaizen in daily work

• Seek continuously for improvements
Employees

• Steer Kaizen implementation of improvements

on a project level
Supervisors
• Collect improvement ideas from employees
and report them to the management

• Motivate staff to implement Kaizen

Management • Create “breading ground” where the
continuous improvement philosophy can
“grow”

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Kaizen Basics
The 3 M‘s

MUDA 200 Kg
1000 Kg
(useless waste)

MURA
The 3 M´s
(variability)

MURI 1000 Kg

(inflexibility) 500 Kg

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 How Kaizen is applied to TI installation in
Create value by removing non-value adding activities, resulting in less effort and less waste

principle
Reworking
Kaizen analysis After initial process With continuous
improvement improvement

Movement

Installation process
Continuous
improvement
resulting in
Waiting further effort
time reduction
over time

Overprocessing

Value adding process step Non-value adding process step (“waste”)

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 Create Stable &
Standardized
Processes

Basic Lean Tools

> Autonomation (Jidoka)
> Inspections
> Mistake Proofing (Poka Yoke)
> Why-Why
> Fishbone Analysis

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 Create Stable &
Built In Quality (Jidoka) Standardized
Processes

• Tools or Methods to Eliminate Defects

• Detect defects when and where they occur
• Prevent defects from passing to the next operation
• Identify and eliminate root causes of defects

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 Create Stable &
Built In Quality (Jidoka) Standardized
Processes

• Equipment autonomation (automation with the “human touch”)

• Separate operator work from machine work
• Before: Operator watches machine run
• After: Operator loads and moves
- Auto shut-off
- Auto unload
- Operator moves to next operation
• Question: Do you watch your household appliances run?

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 Create Stable &
Error Proofing (Poka-Yoke) Standardized
Processes
Poka-Yoke: to avoid (Yokeru) inadvertent errors (Poka)

• Shigeo Shingo developed Poka-Yoke to achieve zero

defects.
• Translated into “error-proofing”
• Used to avoid inadvertent errors
• Design the process so that mistakes are impossible or at
least easily detected and corrected.

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 Create Stable &
Poka Yoke-Mistake Proofing Standardized
Processes

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 Create Stable &
Three Levels of Mistake Proofing Standardized
Processes
From end customer perspective…
1. Successive Detection - good
Finding the error after your operation

2. Self Detection - better

Finding the error during your
operation
Level-2: Detect errors
during processing Best
3. Source Detection - best
Level-3: Prevent
Better errors from The process detects the error,
occurring making it impossible to do
wrong
Level-1: Detect
Good defectsbefore they
move to next step

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 Create Stable &
Error Detection Vs. Cost Standardized
Processes

Source, Self, and

Successive checks make
Mistake Proofing much
more effective
than other detection
methods!

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