Posts Tagged ‘six-sigma’

CBO Director Underestimates Public Sector Waste

Friday, September 16th, 2011

At a meeting of the Supercommittee Tuesday, Congressional Budget Office Director Douglas Elmendorf cautioned that ferreting out waste, fraud and abuse would have a negligible impact on the panel’s work. “There is no evidence that suggests that this sort of effort can represent a large share of the $1.2 trillion or $1.5 trillion or the larger number that some of you have discussed as being the objective in savings for this committee,” Mr. Elmendorf said. The Washington Times story goes on to say that Vice President Joseph R. Biden is touting his efforts to find $1 billion in wasteful government spending here and there.

$1 billion dollars of waste in a federal budget that for 2012 alone is estimated to be $3.729 trillion? By my math this amount represents 0.027% of the budget. And that assumes that the Vice-President is looking at only one year’s savings. Such a pittance is hardly worth the bother.

My experience with the private sector suggests that there is in the neighborhood of 25%-40% waste in any organization which hasn’t applied Lean Six Sigma or any similar technique. This is well documented by research. The public sector certainly has at least this much room for improvement. At the low end of the estimate this represents a potential savings of $932 billion in the 2012 budget alone, or about 85% of the projected 2012 deficit. The fact that the CBO Director believes that public sector waste reduction opportunities is negligible indicates that he is completely unaware of the reality of the situation. It is unfortunate that he is spreading his ignorance to the Supercommittee charged with finding real savings. The implications for true reform and for eliminating non-value added activities rather than value-added activities are ominous.

The Operational Excellence community of professionals in the Quality, Six Sigma, Lean and Lean Six Sigma fields know from experience that the amount of waste is huge. This presents governments at all levels with the opportunity to eliminate deficits completely while not cutting value for the beneficiaries of programs. The question is, when will our political leaders begin to take this seriously? There is currently some work being pursued by the folks at Strong America Now to make this happen. Some Presidential Candidates, such as Newt Gingrich, are speaking out. The comments of Mr. Elmendorf and Mr. Biden’s efforts indicate that the current leadership has yet to understand the magnitude of the opportunity before them.

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Free E-handbook of Statistical Methods

Thursday, September 8th, 2011

Click here to access the NIST/SEMATECH e-Handbook of Statistical Methods. NIST is an agency of the US Department of commerce, so this work was undertaken at public expense. It covers literally every statistical tool used in Lean Six Sigma, and many, many more. It includes hundreds of case studies and examples. Best of all, it’s free! Enjoy!

nist-ehandbook-example

Skewness from NIST E-handbook

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The Lean, Six Sigma, and Quality Triad

Tuesday, May 31st, 2011

In response to a message from a colleague asking about the relationship between Lean, Six Sigma and Quality, I wrote the following:

Both Lean and Six Sigma (and Lean Six Sigma, the combination of the two) are ways of improving operational excellence. Lean does this by improving flow through value streams, primarily focusing on the elimination of various forms of muda (waste.) Six Sigma does this by identifying what customers and other stakeholders want and delivering it with minimal waste, variation and errors.

The Lean and Six Sigma DMAIC disciplines focus on the processes for creating and delivering products and services that meet or exceed customer expectations. The Design for Six Sigma discipline focuses on the design of products or services that meet or exceed customer expectations. Quality is a discipline which focuses on identifying customer requirements and expectations, translating them into internal requirements, and assuring that the requirements are consistently met. Of course, these Quality activities provide input into both Lean and Six Sigma. It is the “Y” being solved for when waste is identified (Lean) or when searching for the root causes of waste, variation and errors (Six Sigma.)

Thus, Lean, Quality, and Six Sigma are all different aspects of excellence.

I welcome your comments on how you consider the three areas to be related. Or do you consider them to be unrelated ideas?

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Six Sigma Becomes Political Topic

Monday, March 28th, 2011

The blog Politico reports that Six Sigma is being proposed by at least one potential 2012 presidential candidate as a way to make the Federal Government more lean and efficient. Tim Pawlenty, former Minnesota governor and 2012 GOP hopeful is a true believer in the Six Sigma business management strategy that’s popular with Fortune 500 companies, but not many politicians. Just hours after launching his presidential exploratory committee, Pawlenty was on a conference call with supporters ticking off the ways he’d reform the federal government — “Six Sigma principles,” he said.

“I couldn’t be more excited about it,” Pawlenty told listeners. Pawlenty was first introduced to Six Sigma during his tenure as governor. In 2003, the new commissioner of the Minnesota Pollution Control Agency brought in Six Sigma to train her staff. At the time, agency was only issuing about 9 percent of its permits every six months. But with Black Belts and Green Belts from Six Sigma on board, the agency greatly accelerated its work and began issuing 70 percent of the permits within that time frame — all without layoffs or relaxing environmental standards. “I’ve seen the power of it,” Pawlenty said. “I’ve witnessed it firsthand.” Continue Reading

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When to Use Your Eyeballs, and When Not To

Thursday, March 24th, 2011

Fig. 1-Large and Small Samples of Normally Distributed Data

One of the exercises I assign to students in my training involves creating two histograms from normally distributed random numbers. The results often look similar to those shown in figure 1. When I ask students to comment on their histograms I usually get comments about the averages, spread, and other statistical properties. However, that misses the point I’m trying to teach.

When we do Six Sigma we usually spend a lot of time mining historical data from databases. Sometimes the sample sizes are large, and sometimes they can be quite small. In fact, even large sample sizes can become small when we slice-and-dice them drilling down with various categories and sub-categories in search of CTQs. Statistical software will often automatically fit a normal curve to histograms created from these data. It’s often tempting to use the fitted curves to make an eyeball judgment about the normality of the data. Sometimes this is a good idea, and sometimes it isn’t. If the sample sizes are small, then the curve may not appear to fit the data very well simply because of small sample variation. Witness the top histogram in figure 1 for an example of a curve fitted to a histogram from a sample size of n=20. The histogram looks like a poor fit, but the p-value of a normality test tells us that the fit is pretty good anyway. So we’re probably safe assuming normality and acting accordingly.

The lower curve is fitted to a sample of n=500 data values. It appears to be a much better fit, and the p-value will back this conclusion. But what if the eyeballed curve fit and the p-value disagree?

histogram-and-probability-plot

Fig. 2-Decent Fit but Lousy P-value

Sometimes the fit of the curve is “close enough,” but the p-value will tell you that the fit is awful. Take a look at figure 2. The histogram suggests that the normal curve fits the data pretty well. There are many practical situations where you could use the normal distribution to make estimates and your estimates would be just fine. These are data on the time it takes to complete technical support calls. If you assume normality and you estimate costs or make a decision about process acceptability, your decisions will be essentially correct. However, the probability plot and AD goodness-of-fit statistic clearly show that the data are not normal and that the lack of fit is particularly poor in the tails (p < 0.005.) A closer examination shows that even in the tail areas the discrepancies are fractions of a percent. For example, the normal distribution estimates that 99.9% of all calls will take less than 35 minutes to complete, while the data show about 99.5%. Chances are these differences are of little or no practical importance.

The point is that in the business world we often need to make decisions and then get on to other, more urgent matters. The normal distribution is a handy device for getting quick estimates that are useful for such decisions. If your sample size is relatively large (say 200 or more) then you can go with the normality assumption if the fitted curve looks reasonably good. On the other hand, if you only have a small amount of data, you can still use the normality assumption if the histogram fit looks lousy, providing the p-value of the goodness-of-fit statistic says the normal curve is okay, i.e., if p > 0.05. The normality assumption is so useful that it’s worth using as a default, even if you bend the rules a bit.

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A Sampling Question

Monday, March 14th, 2011

A Six Sigma Green Belt student asked an interesting question about sampling. Here’s the question and my response.

QUESTION:
======================
Just a question that I thought I would run by you…
I work in the Automation industry, and am currently working on two production lines, and logging data for the parts being produced. One line is producing 60 parts per minute and I can thus log the data for every part. The other line is producing 240 parts per minute, and it is not possible to log the data for every part. I remember reading somewhere that in order to perform SPC you must take n consecutive samples (I think n was 5) every x number of cycles. What I need is definitive guidance on how to calculate n and x. I also need to know the statistical reason that n and x are used in order to explain this to the customer. Any feedback you can give me in relation to this would be greatly appreciated.

Regards,

AT in Irelend

RESPONSE:
======================
There is no rule that you need to sample n consecutive samples every x number of cycles. You are probably thinking of a technique known as PRE-Control, which is different than SPC. PRE-control also incorporates rules for deciding when to increase or decrease sampling frequency, stopping rules for processes, etc.. Personally, I don’t like PRE-Control for a variety of reasons, but if you have The Six Sigma Handbook, 2nd edition I discuss in starting on p. 661 or the 3rd edition starting on p. 465. My primary reason for disliking PRE-control is that it is a specification-based scheme (which I dislike in principle) and it will allow process variation to increase until it is as wide as the specs allow. SPC is all about reducing process variability to a minimum by identifying special causes of variation. When used in conjunction with Lean Six Sigma, SPC will also address common cause variation.

Instead of PRE-control I suggest that you consider using standard SPC control charts. I don’t know anything about your process so I can only offer general advice. If you’re already logging in metrics for 60 parts-per-minute I would be surprised if you’re not encountering problems like autocorrelation, which requires an adjustment to standard SPC such as using EWMA charts instead of classical control  charts. If you have autocorrelation and are not using the proper chart, then you will be experiencing a lot of “false alarms.” Processes seldom change by any meaningful amount in a matter of seconds, so you can probably extend the sampling interval. If you feel that you can economically sample 60 per minute, and that it is wise to do so, then you could sample this number of parts from the process running 240 parts per minute rather than checking every part. It would be best to choose the sample at random, rather than sampling every 4th part. Samples chosen using a fixed pattern are susceptible to problems if the process exhibits similar patterns. For example, if the process had 4 positions on a workstation then your 1-in-every-4 sample would always be sampling from the same workstation. Sometimes the patterns in the process are quite difficult to spot, and “Murphy’s Law” can strike at any time. Murphy’s Law states that anything that can go wrong, will go wrong.

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Lean Six Sigma Improvement and Work Design, Part 13

Monday, September 6th, 2010

This is the thirteenth and last post in a series taken from a lesson in Pyzdek Institute Lean Six Sigma Black Belt training. You can find all of the articles in the series by searching this site for the title.

Sustain

Sustain  is the name of the whole 5S game. You gain nothing by deploying the first 4 S’s, only to let things go back to business as usual in the long run. In fact, you probably create an attitude among workers and supervisors that management isn’t really serious about Lean Six Sigma.

Just why things tend to get worse unless we pay close attention to them is a debatable proposition. There is an analogous concept used in thermodynamics: entropy.  One definition of entropy is applied to human systems, “The inevitable and steady deterioration of a system or society.”[1] In physics entropy is inevitable in closed systems. These are systems where there is no additional input of energy. The same applies to Lean Six Sigma 5S systems: if no additional effort is put into sustaining the improved state, then deterioration is inevitable and steady. You simply have no choice. If you want to sustain the benefits of 5S you must put forth the required effort to do so. Here are some guidelines to help you do so.

  • Provide periodic refresher training on 5S.
  • Schedule the required time to perform 5S on a daily basis.
  • Create a standardized approach to 5S that clearly spells out how 5S will be implemented.
  • Have your Lean Six Sigma process owner acknowledge and accept ownership of 5S.
  • Create programs to recognize 5S efforts and reward compliance with standards.
  • Keep 5S fun! Think of creative ways to keep 5S from becoming drudgery. (5-Minute 5S contests anyone?)

Safety–The Real 1st S

A workplace where 5S is practiced is not only clean and well-organized, it is also safe. Clutter and unnecessary materials and equipment contribute to accidents. People can locate the tools and materials they need without searching among  unneeded objects and moving them out of the way. There are no oil spills where people can slip and fall. Adequate and clearly marked aisles make transportation safer. Marked storage areas which contain only what is needed are less likely to have excess inventory that can fall and injure people.


[1] http://dictionary.reference.com/browse/entropy

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Lean Six Sigma Improvement and Work Design, Part 12

Monday, August 30th, 2010

This is the twelfth post in a series taken from a lesson in Pyzdek Institute Lean Six Sigma Black Belt training. Future posts will continue the topic. You can find all of the articles in the series by searching this site for the title.

Standardized Cleanup

Standardized cleanup is used to maintain the 5S activities described so far. The definition is somewhat circular: when the 5S activities of Sort, Set in Order, and Shine are properly maintained, then you have standardized 5S. When 5S has been standardized you avoid backsliding.

Determine Responsibilities

The tools needed for standardized cleanup include the tools already introduced: 5S maps and 5S schedules. In addition you’ll need a new tool: the 5S Cycle Chart (see Figure 14.) To create such a chart you sort the duties into Sort, Set in Order, and Shine categories and use a letter code to identify the cycle period. The resulting 5S Job Cycle Chart can be used as a checklist by the personnel responsible for the various 5S activities.

Figure 14-5S Job Cycle Chart

 

 

5S Job Cycle Chart

5S Job Cycle Chart

 

 

 

Integrate Sort, Set in Order, and Shine with the Work Routine

Make these three 5S activities a part of the normal work done in the work cell. This integration will reinforce the idea that 5S isn’t something added on to the work being done, it is an integral part of it. One mechanism for implementing this is “Visual 5S.” As with the visual workplace in general, the purpose of visual 5S is to be able to tell at a glance that 5S activities are being done on an ongoing basis. For example, if Set in Order requires that  tools are kept on a pegboard, then the tool outlines on the pegboard will indicate which tools are currently in use. This means that any blank space observed on the pegboard at the start or end of the shift is an indication of a problem.

Another mechanism is 5-minute 5S. This is similar to the 5-minute shine described earlier, only the scope is the entire 5S program. Don’t get hung-up on the “5-minute” part of this activity, it’s just an easy to remember tag. However, think of it as something you do quickly. You may want to use a visual display to make it easier to track your 5-Minute 5S activities, such as that shown in Figure 15.

Figure 15-5 Minute 5S Signboard

 

 

5 Minute 5S Signboard

5 Minute 5S Signboard

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Lean Six Sigma Improvement and Work Design, Part 11

Monday, August 23rd, 2010

This is the eleventh post in a series taken from a lesson in Pyzdek Institute Lean Six Sigma Black Belt training. Future posts will continue the topic. You can find all of the articles in the series by searching this site for the title.

Shine

 

Cleaning Inspection

Cleaning Inspection

 

Shine can be thought of as the Lean Six Sigma version of housekeeping. It involves making sure that dirt, grease, and grime is eliminated from the work place. The goal is to make the workplace a safe and pleasant place to work. Shine also assures that items and equipment will be ready to use when needed. Shine is an ongoing activity, not a once-in-a-while “spring cleaning” type of event.

Cleaning and inspection go hand-in-hand. When you clean an area you automatically inspect the working surfaces, floor, equipment, parts, etc. that you are cleaning. This is a side-benefit of cleaning because it highlights issues and opportunities that would otherwise be overlooked. To get the full benefit from this you will need to incorporate a method for easily reporting any problems discovered.

 

Shine Steps

Identify the shine targets. What warehouse items (parts, raw materials, subassemblies, etc.,) equipment (machines, tools, worktables, desks and chairs, etc.,) and spaces (floors, work areas, beams, windows, shelves, lights, etc.) will be cleaned?

Assign responsibilities. Use the 5S map to create specific areas that will be assigned to individuals. Set up and post a schedule showing when each area is to be cleaned. Be sure that shine activities take place throughout each day.

Determine the shine methods. Start and end each shift with a shine inspection. Determine what will be cleaned and how it will be cleaned, including the cleaning supplies and equipment needed. Implement the “5-minute shine” drill. You will be surprised at how much can be done in an intense 5-minute effort. Develop standard cleaning procedures that assure that time is spent on actual cleaning rather than on preparation for the task.

Tools. Apply the Set In Order approach to your cleaning tools, thereby making them easy to find and easy to use.

Shine! Now it’s time to get to work on the targets. Have the responsible people follow the shine procedures and, using the proper tools, clean the work area to the required standards.

Deal with issues identified during cleaning. Finally, respond to any problems found during the shine process. When possible, fix things immediately. The standard cleaning procedure should include what steps to take to deal with problems that can’t be fixed at once. To whom should they be reported? What forms, etc. are needed? It is a good idea to attach a tag to any equipment where maintenance has been requested to remind workers and supervisors that maintenance is pending.

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Lean Six Sigma Improvement and Work Design, Part 10

Monday, August 16th, 2010

This is the tenth post in a series taken from a lesson in Pyzdek Institute Lean Six Sigma Black Belt training. Future posts will continue the topic. You can find all of the articles in the series by searching this site for the title.

Set in Order

Once the Sort phase has been completed, it is time to set the remaining needed items in order. Items are arranged and labeled so they are easy to find and use when needed. When this is done a great deal of waste is eliminated in production and office activity. For example, it will no longer be necessary to waste time searching for the needed item, nor will it be necessary to return an item because it wasn’t the item you actually needed. You’ll make fewer errors due to using the wrong tool or material or form.

Setting in order revolves around standardization, and, conversely, standardization revolves around setting things in order. The key principle is visual control. For example, Figure 10 makes it clear to the surgical team which instrument goes where by providing drawings and verbal descriptions. In factories, Lean Six Sigma teams often keep things simple by drawing outlines of the tools on simple pegboards, as shown in Figure 11. It is then easier to see which items are currently in use, as well as where a given item needs to go when it is returned. If possible, attach the tool to a retractable cord so it automatically returns to the correct location when released. Color-coding the tools helps reduce errors (Figure 12.)

 

Figure 10-5S Surgical Instruments Organizer

5S Surgical Instruments Organizer

To further simplify, teams should organize tools so they are presented in the order of use and are easily accessible to operators. Ideally operators will be able to get the needed tool without even looking at the tray or pegboard. This may require providing storage areas with additional space between tools to make it easy to reach them.[1]

As a general set in order rule, frequently used items are located nearer to the work cell than items used less frequently. Items that are seldom used are usually stored in a remote location to reduce clutter.

Figure 11-Pots and Pans Outlined on Pegboard

Pots and Pans Outlined on Pegboard

Figure 12-Engine Assembly Line in Poland with Color-Coded Overhead Tools on Retractable Cords

Engine Assembly Line in Poland with Color-Coded Overhead Tools on Retractable Cords

Locations

The locations where WIP, jigs, tools and other equipment are stored can be determined by evaluating the “5S Map,” such as that shown in Figure 7-Work cell Layout. This is done as follows:

  1. Draw the 5S Map on a floor plan, preferably drawn to scale. Indicate the location of WIP, fixtures, tools, etc. on the scale drawing.
  2. Draw a spaghetti diagram of the work flow on the 5S map. Identify wasted motion.
  3. Create alternative 5S maps which reduce or eliminate wasted motion.
  4. Simulate the work flows represented by the various 5S maps and choose the best alternative.
  5. Create the new work cell layout, including locating the WIP, tools, fixtures and jigs, etc..

Once the improved layout has been determined, create “signboards” to identify the locations for the various items needed in the work cell. This includes location indicators that show where the various items go, such as marking off floor areas with tape or paint. It also includes item indicators which show the specific items that belong in each location. Finally, you will need amount indicators to specify how many of each item are needed. Signboards are used to identify machine locations, locations for standard procedure displays, storage of equipment when it is not being used, location of WIP and finished goods inventory, racks and spaces within racks for various items, and named work areas.

Floor locations are often shown in places other than the work cell itself. For example, paint (or colored tape) is used to show aisles and aisle direction, door swing space, storage locations, zones which are off-limits for storage, hazardous areas, etc.. Additional information can be conveyed by the use of color-coded paint. For example, red might show off-limit areas, green might show operations areas, and yellow might indicate divider lines.[2] If you use color-coding, be sure that the color uses are standardized.

 


[1] In the case of the surgical instruments tray, a person normally hands the needed instrument to the surgeon.

[2] Color coding has other uses as well. For example, it can be used to show  which tools are used together, which equipment make up a “set” for producing a particular item, etc.. Be creative and use your imagination to identify how to use simple, visual means of conveying information at a glance.

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