IT-465 Six Sigma Lean Chapter 1

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IT-465Six Sigma LeanChapter 1

• Southern Illinois University
• At Carbondale

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Why Implement WCM?

• Profits are the reward of satisfied customers
• Customer satisfaction Defined as meeting a
  customers expectation for the quality, delivery,
  price, performance, and service of its products.
• TQ Total Quality
• TQM Total Quality Management

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Customer Satisfaction

• Requires execution by the entire company team on
  the customers requirements.
• The goal must be customer satisfaction.
• Profits are the reward of satisfied customers
  and, ultimately, the source of jobs.

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Customer Satisfaction

• Customer satisfaction alone has the power to
  guarantee profits and jobs.
• Customers guarantee the jobs of employers and
  companies.
• Customers will not pay the wages of anyone,
  hourly or management, who does not add value to
  the future product.
• Its not the employer who pays the wages.
  Employers only handle the money. Its the
  customer who pays the wages. Henry Ford

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Waste

• Is anything other than the MINIMUM amount of
  people, time, equipment, material, parts, and
  space required to ADD VALUE to the product

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Adding Value

• Any operation or process the customer is willing
  to pay for.
• Adding value generally means changing the shape
  or form of the product.

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The 8 General Types of Waste

• Scrap/Rework
• Transportation
• Motion
• Waiting Time

• Inventory
• Overproduction
• Overprocessing
• Underutilized Human Resources

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Improved Profitability

• Waste Elimination
• Leads to
• Improved Customer Satisfaction
• Leads to
• Improved Profitability

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Improvement Change

• If you always do what you have always done, you
  will always get what you have always got.
• Japanese Success Factors
• Teamwork
• A company-wide war on waste.
• Dedication to perfect quality.

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Customer Satisfaction Lower Costs

• The reality of satisfying the customer is that it
  does not raise costs.
• Customer satisfaction always costs less.
• The reason is simple. In every plant, there are
  inherent roadblocks which prevent it from
  performing in a manner that meets the customers
  expectations.

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Roadblocks

• Scrap/Rework
• Machine Setups/Unplanned Downtime
• Supplier Lead Times
• Inventories
• Lost Time Accidents

• Material Handling
• Inspection
• Inventory Storage
• Product Test
• Counting Inventory

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Scrap/Rework

• Limits competitiveness, costs are borne by the
  buyer.
• Prevents on-time deliveries which cause
  additional costs in overtime, premium freight,
  warranty, and/or administrative costs.
• Represents quality problems which could reach the
  customer. 100 inspection is only 85 effective.

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Machine Setups/Unplanned Downtime

• Reduces manufacturing capacity
• Prevents on-time deliveries
• Promotes building inventories
• Supports the requirement for indirect labor and
  higher costs.

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Supplier Lead Time

• Prevents the reduction of product lead times.
• Prevents the ability to becoming a World Class
  Company.
• Since WC companies require WC suppliers

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Inventories

• Adds carrying cost of inventories.
• Approximately 25-30 per year is waste
• Hides unsolved manufacturing problems
• Scrap
• Rework

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Lost Time Accidents

• Causes physical and mental hardships on team
  members and their families.
• May limit the full participation and involvement
  of the team member.
• Prevents a member from being available to serve
  the customer.
• Injury claims add cost to the product.

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Product Test

• Not a value added operation when used as an audit
  of manufacturing or assembly processes.

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Office Area Waste

• Conflicting Department Goals
• Traditional Accounting Methods
• Poor Product Designs
• Order Processing Time

• Hunting, Looking, Searching
• Waiting Time
• Purchasing Reorders, Transactions, Supplier
  Invoices
• Authorizations

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Summary

• World Class Manufacturing World Class
  Enterprise
• A technique that can continuously improve the
  following business and manufacturing processes
• Safety, quality, productivity, and delivery
• While reducing
• Lead-time costs