Lean Six Sigma

Growth thru Process Improvement

Jim Peterson
8*229-2487

Growth is the GE initiative

Customers Growth leaders Innovation

Globalization

Execute for growth

Commercial excellence

Great technology

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Process Improvement Focus

to improve the speed & quality of our key customer facing processes NPI by applying Lean Six Sigma Methods and Tools measuring our success by

Net Promoter Score (NPS)

ITO

Quality & Speed

OTR

GROWTH

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Evolution of GE Change Processes

Lean Six Sigma .wing to wing process focused Career focused Six Sigma Project focused Six Sigma Change Acceleration Process Work Out 1989 1992 1996 1999 2005

Customer impact Leadership Productivity X-functional involvement Employee Voice

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Evolution of Six Sigma

Six Sigma
Mrktg. Eng. SC Sales Svc

Lean Six Sigma

Mrktg. Eng. SC Sales Svc

Customer

OTR ITO NPI

= Six Sigma Project = Action workouts
NPI = 24 months NPI = 18 months NPI = 12 months

Discrete projects for specific problems Reduce defects to deliver quality & productivity Individual project approach

End-to-end processes value stream map Reduce waste to deliver speed & quality Cross functional team AWO approach
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The Lean Work-Out Approach

Lean WorkOut

1 wk New Process Launch

1 wk

6-9 Months

VSM

AWO

VSM Implementation

Strive For Perfection

Value Stream Map Current State Future State 6-9 Month Plan

3-5 Cross Functional Teams Make Change Attack Top VSM Priorities

Ongoing Awos Following VSM Implementation Plan Six Sigma Projects Turn VSM Future State Vision Into Reality

Achieve Future State Repeat The Process

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Lean & Six Sigma working together to improve processes

Start by mapping the entire Value Stream
Lead Time / Cycle Time
Work . . . Value Add Time Wait / Waste . . . Non Value Add Time

Diagnose causes of long waits and or waste - Lack of coordination, lack of flow - Rework due to poor quality

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Lean & Six Sigma working together to improve processes

Use Lean and Six Sigma to attack process inefficiency
Lead Time / Cycle Time
Work . . . Value Add Time Wait / Waste . . . Non Value Add Time

Use Lean to attack lack of coordination, lack of flow, waste

Use Six Sigma to attack rework due to poor quality

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Lean & Six Sigma working together to improve processes

Lead Time / Cycle Time

Work . . . Value Add Time Wait / Waste . . . Non Value Add Time

Before After After

Result is always faster Cycle Time and Better Quality

Need a Balanced Approach to Improve Processes

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What Is Lean?

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What is Lean? A Strategy For Maximizing Value to Customers The relentless pursuit of the perfect process through waste elimination
All we are doing is looking at a time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the nonvalue added wastes
Taiichi Ohno Founder, TPS 11 /

Lean Fundamentals
TPS
Pull Single Piece Flow (w/feedback) Takt Time Stop at an Jidoka abnormality Autonomation

JIT

Heijunka
Leveling, Sequencing

Lean is a SystemNot Just a Set of Tools

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3 types of process inefficiency

MUDA (waste) wasted time, motion, material, etc. MURA (variability) inconsistent processes, practices, equipment, etc. which lead to defects MURI (unreasonableness) requiring a process to do that which it is not capable of doing
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Lean Showcases

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Applying Lean to ITO and NPI

Products Minimize Time for Material to Flow from Start to Finished Goods Minimize Time for Information to Flow from Start to Finished Process

Knowledge

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2005-2006 Initiative: Lean Showcases

Demonstrate that Customer facing cycle time reduction drives growth Lean Work-Out perfect tool for driving significant cycle time reduction Wing to Wing Multifunctional Action Oriented Approach totally compatible with GE culture

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Lean Showcases: Criteria

Passionate business leader Representative segment of business Address at least two of three processes customers care about: New Product Introduction (NPI), Selling (ITO), Fulfilling (OTR) Growth impact exceeding $50 million in revenue

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Process Improvement

LEAN Showcase Case Studies

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Electrical Distribution Business Overview

Sales Op Profit

Business Turning Around

2003 2004 2005 2006 2007E

Oth er

Serving Multiple Markets

Resi
Small Comml Schools Retail Facilities Offices

Oil & Gas Data Ctrs Utilities Hospitals

Industrial/ Lg Comml OEM

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Electrical Distribution Small Projects - Selling

Fast Appeals Pricing Results
Sales/Margin Vpts Last 10 months 36 hours National Launch 19 minutes Old Process Now
Small Price Medium Volume Job Size Large Capacity

Sales Vpts CM Vpts

Additional Activities
Launched Integrated Switchboard NPI 70% installation cycle reduction; increased incremental sales run rate YTD Launching Small Projects Same Day Distributors serve from stock Currently in pilot stage; targeting incremental Sales
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Electrical Distribution Business Overview

Sales Op Profit

Business Turning Around

2003 2004 2005 2006 2007E

Oth er

Serving Multiple Markets

Resi
Small Comml Schools Retail Facilities Offices

Oil & Gas Data Ctrs Utilities Hospitals

Industrial/ Lg Comml OEM

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Electrical Distribution Complex Projects

Before
Specification work with consultants

After
System designed by the end customer, the consultant and GE

Coordination left to the customer

Switchgear Transformers Motor Control Centers Multilin

GE takes on system coordination Composite bids & drawings = standard

Factory Teams

Customer/Sales

Internal processes too slow 53% on-time quotes 8.6 avg days to quote 19 screen shots for project status

Lean Tools applied to process 93% on-time quotes 4.4 avg days to quote 1 screen for project status
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Examples of Success
Lean Pipeline
Specification Specification

Inquiry Inquiry

Order Order

Project Project Startup Startup

Energization Energization

Inquiry To Order System Coordination National Gypsum

Quote Quote Costs Costs

Inquiry To Order System Coordination Kuwait Pump Stations

$3.2 million project @ target CM W/O Lean Team With Lean Team Empowered to say no. Clearly understood system requirements
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Catching Issues at Quote Stage

Lean Six Sigma Faster, Better

Innovating (NPI) Selling (ITO) Fulfilling (OTR) Time to Market Time to Yes Time to Deliver

Cycle Time = Competitive Advantage

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Appendix

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Resourcesfor More Information

The Toyota Production System The Toyota Way Lean Thinking
Perspectives by the founder of the TPS 14 Principles by a professor & student of TPS TPS as a business system approach How-to Value Stream Mapping Guide Lean as a total business solution What makes TPS work at Toyota

T. Ohno J. Liker

D. Jones & J. Womack D. Jones B. Emiliani S. Spear & K. Bowen

Learning to See

Better Thinking, Better Results The DNA of TPSHBR article

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Lean Glossary
5S Action Workout Andon Automation Autonomation Cell Chaku-Chaku Building Blocks for shop floor discipline and control; Sort, Sweep, Standardize, Self Discipline, Sustain. (Kaizen) A 3-5 day event with the teams focused on taking action and making changes quicklySolving problems empirically, through physical simulation, observation and iteration. A visual device, usually a specialized light that operators use to call attention to an abnormality. The use of this is to request immediate attention and action to the problem. The use of machines working independently of manpower. The process of separating the work of man and machine characterized by: work not movement; quality built into the process; and visual management. (see Jidoka) The optimal physical layout or machines and manpower A method of conducting single-piece flow in which the operator proceeds from machine to machine (in a counter-clockwise fashion), taking a part from the previous operation and loading it in the next machine. Then taking the part just removed from that machine, checking it and loading it into the following machineetc, The total time required for a task to be complete. Cycle time is process specific, and many cycle times will exist within an overall lead time of making a product Work done simultaneous to or in conjunction with transportation or conveyance. e.g. (1) an assembly is moving down a line while a person is performing work, (2) a person acts as a conveyor carrying a part to the next machine in a Chaku-chaku fashion. The main purpose of flow is to quickly and continuously identify and eliminate waste. The process of level loading and sequencing the timing of customer demand for products or services.
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Cycle Time Flow

Heijunka

Lean Glossary
Jidoka Jidoka (Autonomation): One of the 3 main principles of Lean, it has 2 main elements: 1) Stopping the process when an abnormality has been detected 2) Building human intelligence into machines or software, giving automation the ability to make a decision to shut down automatically in the case of an abnormality in order to stop defective products from flowing into the next process. Jidoka measures are incorporated in the assembly process by use of Andons and Pin-Pan-Pon; stopping when abnormality is detected. (Just in time): One of the 3 main principles of Lean, its the philosophy of production characterized by 3 elements each must be present to ensure JIT functions properly. (1) single piece flow, (2) producing according to TAKT time, (3) pulling of material from upstream process Change for the better or Continuous Improvement A hands-on process of short duration to develop iterative solutions, with each iteration an improvement on the last. A method/device of pulling from previous processes in order to control material flow, cap inventory levels, and to take pulse of the customer. Grouping component parts used in a process or build for ease of assembly. (see material presentation) The total time it takes the product to go from raw inventory to the finished product. Order to remittance lead time refers to the total time from when an order is placed until the finished product is shipped. Introducing material to the line or cell in a manner that is easy and effective for the operator.

JIT

Kaizen Kanban Kitting Lead Time Material Presentation

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Lean Glossary
MUDA Poka-Yoke Any type of waste elements that add no value to the product: i.e. Waiting, Transporting, Over production, Excess Motion, Inventory Defects, Human Touches. Mistake proof: usually refers to the use of fail-safe devices in the process in order to prevent defects from occurring and insure quality. When this ingredient is added to automation will yield autonomation. ( see Jidoka ) A study of the process and machine sequence for a group of similar parts. It can be used to standardize product flow for ease of cell implementations. A study of the quantities demanded of different products produced at a work location. This picture of the volume and variety of products can be used to identify high impact areas to concentrate efforts or identify the need to use process razing to make products more similar. System of manufacturing in which each process withdraws the parts it needs from the preceding process when they need them, in the exact standardized amount needed. The time a part sits waiting to be worked on. Machine changeover steps that are performed while the machine is processing parts or off-line from production time. Machine changeover steps that are performed while the machine is stopped during production time.

Process Router Analysis Process Quantity Analysis Pull System Queue Time Set-up, External Set-up, Internal

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Lean Glossary
Shingijutsu Single Piece Flow A company founded by C. Nakao and K. Iwata, former employees of Taiichi Ohno, the creator of the Toyota Production System. The word Shingijutsu translates as new technology or better way. Production system in which only one part at a time is processed or assembled and the work is verified before being sent along the production line to follow processes. The 2 elements of SPF are 1) a Do and 2) a Check or verification that the Do was done correctly. This introduces a feedback loop into the system. Single Minute Exchange Die (i.e., under 10 min) has become a title for the category of improvement devices used in manufacturing to allow for quick change over of machine/fixture set-ups. The combination of people and machines required to accomplish production in such a way as to minimize waste and variation by establishing only 1 way to perform the process Minimum and standardized amount of work in process required to perform operations Sequence of repeatable tasks that an operator performs. Shows the outline of work for each worker in a cell. Recorded on it are: Takt time, work sequence, standard WIP, quality checks, safety precautions, etc. A table that clarifies how much time is spent doing manual work and traveling at each production process. A visual system that has a predetermined amount of inventory and all facets of 5s in order to detect abnormalities.

SMED Standard Operations Standard WIP Standard Work Standard Work Sheet Standard Work Combination Sheet Super Market

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Lean Glossary
Takt Time The pace that is set for the system to operate at. Customers establish Takt Timethe following equation is used to establish it: Available production time / required production (fcst & act demand)..must be like units; e.g., 1 shift = 1980 min/wk 1980 = 10 mim = Takt Time fcst = 198 units/wk 198 Total Productive Maintenance is the total involvement of all employees in a cell to improve the process. The specific activities required to design, order, and provide a product from concept to launch order to delivery raw materials to finished goods. The process of detailing the process of converting raw material to finished goods. This is typically mapped with the 7 flows (info, people, equipment, raw material, sub-assembly, assembly,engineering) one at a time, or in a combination. Refers to the means by which anyone can tell at a glance if production activities are proceeding normally or not. A communication, discipline and pacing tool. The time that a worker is idle when no work is available. Work In Process; inventory of materials that has been already started processing. Rework, set-ups, inspection, repair processing, transportation, unnecessary work to complete the manufacture of a product. Anything that isnt directly changing the form fit or function of the part. Only necessary direct work to manufacture a product. Anything that the customer is willing to pay for or an operation that changes the form, fit, or function of the part.
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TPM Value Stream Value Stream Mapping Visual Management

Waiting Time WIP Work, Non-value added Work, Value Added