International Journal ’’Total Quality Management & Excellence’’, Vol. 38x, No. 4, 2010.

Integrating Lean with/within Six Sigma UDC: 1

Tatjana V. Šibalija , Vidosav D. Majstorović

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Faculty of Engineering International Management, European University, Carigradska 28, 11000 Belgrade, Serbia; [email protected] 2 Faculty of Mechanical Engineering, University of Belgrade, Kraljice Marije 16, 11000 Belgrade, Serbia Paper received: dd.mm.yyyy.; Paper accepted: dd.mm.yyyy. Abstract: The paper presents basis of Lean manufacturing methodology and discuss the approaches for integration of Lean and Six Sigma: the Lean – Six Sigma synergy implemented “start from the scratch“ or integration of Lean principles and tools into an existing Six Sigma program. Key Words: Lean, Six Sigma, integration, principles

1. INTRODUCTION Six Sigma (SS) was developed by Motorola in the 1980s to systematically improve quality by reducing variation, which leads to elimination of defects. Six Sigma could be defined as a data driven philosophy resulting in dramatic improvement in products/service quality and customer satisfaction. Lean manufacturing was developed in Toyota in the 1960s with the objective to increase cycle time, reduce waste and create a value for the customer. To address issues of competitiveness and high demands related to quality improvement, short time to the market and cost reduction, many today's companies understood the advantages of integrating Lean and Six Sigma into one methodology commonly referred as Lean Six Sigma. Lean Six Sigma (LSS) is a rigorous, data-driven, results-oriented approach to process improvement. It combines two compatible, widely-recognized methodologies, proven effective in various applications. By integrating Lean and Six Sigma, a powerful methodology is created for improving quality, efficiency and speed in every aspect of a business. Typically, organizations use LSS to make improvements in their operations from managing their supply chain processes and billing processes to new product design, development and production.

2. LEAN MANUFACTURING Lean origins come from Japanese automotive industry, precisely from Toyota Production System (TPS), after the World War II. In a historical context (figure 1.), Lean manufacturing presents a fundamentally more efficient system than a mass production. Mass production mind-set referred to: producer “push”, movement of materials, high volume, inspection, expert-driven, decomposition, periodic adjustment, in contrast to Lean mind-set that implies: customer “pull”, flow of value, flexible response, prevention, knowledge-driven, integration, continuous improvement Lean thinking is the dynamic, knowledge-driven, and customer-focused approach through which all

people in a observed system eliminate waste and create value on a continual basis. It could be said that “Becoming lean is a process of eliminating waste with the goal of creating value.”[1].

2.1 Lean principles Basic Lean manufacturing principles are [1], [2]: • Value: Value for specific product should be precisely specified from the end customer standpoint (figure 2). • Value stream: The value stream for each product should be identified, implying both value-added and non-value added activities. A value stream is a sequence of events that flow from concept to delivery, adding value to customer’s expectations. The overall objective is to eliminate activities that do not create value. Wastes or non-added value categories in production (known as seven wastes in manufacturing) are presented at figure 3. In average, less than 1 % of activity is value adding, and typically, resources are focused to improve 1% and ignore the 99 % opportunity. • Flow: Value flow is determined by customer’s requirements and should be made without interruptions. The flow could be understood as the continuous movement of product, favouring single-piece flow and work cells versus production lines. The value-creating steps should occur in tight sequence so the product will flow smoothly toward the customer. • Pull: The customer should pull value from the producer. When last customer in production chain pull the product, each production process is triggered to manufacture the product (figure 4). • Perfection: Production perfection should be persuaded continuously. Since value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, the continual improvement process is continued until a state of perfection is reached in which perfect value is created with no waste. Basic Lean metrics, according to the Lean characteristics, are: Customer focused -holistic metrics aligned with strategy; Eliminate waste to create

International Journal ’’Total Quality Management & Excellence’’, Vol. 38x, No. 4, 2010.

Figure 1. Lean manufacturing in a historical context of production and quality development

99%

OVER PRODUCTION

OVERPROCESSING TR AN SP OR T

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TIVE DEFEC

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1% Figure 2. Value specified from the customer perspective in Lean

Figure 3. Seven wastes

Figure 4. Example of the pull principle of manufacturing value - throughput vs. output measures; Continuous improvement - reassessment and results. In Japanese manufacturing philosophy three are three forms of waste: “mura“, “muri“ and “muda“. “Mura“ is related to unevenness in work demand or

work flow. In order to establish just-in-time (JIT) system, it is necessary to levelled work flow (Heijunka) and then creates a system that triggers and signals pull work flow. “Muri“ presents overburden of the system processes and capacities that further could

International Journal ’’Total Quality Management & Excellence’’, Vol. 37, No. 1-2, 2009. results in mistakes made due to rush or stress. That is why the common threshold of 85% of capacity usage is establish, to allow some flexibility and prevent forcing the system to accept more than it can handle. “Muda“ is related to 7 wastes. There are two types. First type presents necessary but non added-value waste – figure 2 (e.g. activities performed in order to meet regulations; existence of photocopiers and printers on every desk, etc.). Second type is unnecessary, non value adding waste.

2.2 Lean tools The most commonly used Lean tools are [1], [2]: 5S (See 5S) Process Mapping Value Stream Mapping (VSM) Visual Management Performance Measurement Kaizen Events and Kaizen Blitz Just in Time (JIT) Kanban Takt Time and Work balancing Heijunka (Work levelling) Standardised Work A3 Reporting Total Productive Maintenance (TPM) Overall Equipment Effectiveness (OEE) Corrective Action & Problem Solving Poka Yoke (Mistake Proofing) Autonomation Andon system, etc. Kaizen in Japanese means “change for the good“, which could be interpreted as a drive for continual improvements. Kaizen Blitz (“blitz“ refers to “fast and focused“) is rapid analysis of the specific area which results in rapid improvements. This is usually applied in areas where there is a serious threat to the organisation. Kaizen Events are less disruptive, generates the results over a longer time period and also demonstrates that the organisation is serious about achieving results from all areas of the business. In Japanese word Kanban visual sign or record. Today it is used as a visual signal for “pull“ or JIT, on order to provide instructions (in terms of time, place, quantity) for processing material in a value stream. The following categories are related to Kanban: Kanban Post or Board (area for Kanban visual signs); Withdraw Kanban (signal which define the item and quantity that a downstream process can withdraw from stock or upstream process); Signal Kanban (when a minimum quantity is reached by the downstream process it is a trigger that schedules an upstream process or supplier to start with supply in exact quantity); Production Kanban (define exactly whish item and quantity should be produced); Milk Run (disciplined and predictable material flow and supply). Takt Time presents the calculated time which is needed to manufacture a product in order to fulfil the customer demands. Work flow presents smooth value adding set of activities as the item moves across the system. Work in Process (WIP) is inventory -

(material or information) between process steps or machines, waiting to be processed. Just in Time (JIT) is a management toll for productivity and efficiency improvement that ensures the right items are processed at the right time in the exact quantity and delivered exactly where required. Work is triggered by the actual customer demand. Key elements of JIT are: takt and pitch time, quick change over (SMED), OEE, work standardisation, TPM, capacity, reliable suppliers and quality. Value Stream Mapping (VSM) is a graphical mapping presentation of a system, aiming to show macro-picture of how streamlined work processes are relative to current workflow and a future workflow. The “future map“ shows the desired VSM. Based on this vision, the priorities are established to set the projects for improvement in order to reach the desired state. The VSM contains key information and performance indicators (demand, cycle times, takt time, number of resources, available time, quality etc). Total Productive Maintenance (TPM) is a continuous improvement method focused on process equipment performance that is easy and cost-effective to implement. Everyone is responsible for the overall equipment effectiveness. The operators are “machine owners“, trained and empowered to monitor and continually improve machine performance. Engineering and maintenance provide key services to operations. Management are responsible for establishing a structure to achieve the TPM goals. The TPM key principles are: - Overall Equipment Effectiveness (OEE), - Focus on defects, - Working environment – behaviour, - Equipment “ownership”, - Continuous Improvement through teamwork. 5S refers to the five disciplines coming from the Japanese language, that describe the principles of maintaining an efficient and effective workplace, equally applied in the factory, office, stores, etc. 5S tool is usually effectively used to eliminate wastes, by following steps: Sort (Seiri) - Remove all unnecessary items, Set (Seiton) - Make all necessary items easily accessible; Shine (Seiso) - Clean and inspect area; Standardize (Seiketsu) - Establish standards and maintain performance; Sustain (Shitsuke)- Continually improve - integrate 5S into culture. This toll is of particular importance for TPM, for the elimination of the wastes and for “Kaizen events”. Correct implementation of 5S results in smooth-running business operations and in motivated and engaged employees. Poka Yoke (or mistake proofing) is a method for designing products, machine, tools or processes at such way that the defects occurrence is not physically possible (e.g. the machine can be designed that no defected parts will be accepted in the process). A general framework for the successful implementation of a Lean is presented at the figure 5. It could be noticed that beside Lean tools, Six Sigma tools and techniques are sometimes implemented into the Lean program. .

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International Journal ’’Total Quality Management & Excellence’’, Vol. 38x, No. 4, 2010.

Figure 5. Lean implementation framework

3. LEAN SIX SIGMA

ACE (Pratt & Whitney ), Lean+ (Boeing), Electronics (Rockwell Collins ).

Both the Lean and the Six Sigma methodologies have proven effective over the last decades in achieving dramatic improvements in cost, quality, and time by focusing on process performance. Lean optimizes flow and strives to eliminate waste, while Six Sigma stresses quality through the elimination of variation in all enterprise processes. Lean and Six Sigma are complementary approaches, and if applied correctly, their integration could present the long-term business improvement approach: 1. Lean: - focus on elimination of non-added activities, - focus on "doing the right things", - define and establish the value flow according to customer perception; 2. Six Sigma: - focus on reduction of variations of value-added activities, - focus on "doing the right things from the very beginning", - makes the value flow run smoothly, with no interruptions. The main differences between Lean and Six Sigma are given in the table 1. However, bringing these two approaches together creates synergistic benefits to maximise the customer satisfaction, from a various perspectives (table 2). A possible approach to integration of Lean and Six Sigma is presented at figure 6 [3], including: using Value Stream Mapping to develop a set of projects that will either adopt Six Sigma or Lean tools; teaching Lean principles first to increase momentum and introducing the Six Sigma process later on to tackle the more advanced problems; and adjusting the content of the training to the needs of the specific organization. With reference to this, most companies first start to use basic Lean techniques to eliminate waste from processes, and then apply Six Sigma through DMAIC (DefineMeasure-Analyse-Improve-Control) approach using statistical techniques to ensure that the potential causes of problems are not missed. Some of the companies that implemented LSS adopted their own name for this synergy, such as: Textron Six Sigma (Textron), AFSO21 (US Air Force),

Table1: Lean vs. Six Sigma Objective Focus Theory Application

Six Sigma Deliver value to customer Problem focused Reduce variation 1.define 2.measure 3.analyse 4.improve 5.control

- Figures and numbers are valued - System output improves if variation in all processes inputs is reduced Primarily Application manufacturing sector processes Training Teaching principles and "cookbook approach style", based on the best practice Infrastructure Mostly ad-hoc, no or little formal training Assumptions

Lean

Lean Deliver value to customer Flow focused Remove waste 1. identify value 2. identify value stream 3. flow 4. pull 5. perfection - Waste removal will improve business performance - Many small improvements are better than system analysis All business processes Teaching a generic problem-solving approach relying on statistics Dedicated resources, broadbased training

3.1 Integrating Lean within Six Sigma There is an emerging question: Is it possible to integrate Lean into an existing Six Sigma program? According to recent studies, it is possible to introduce Lean concepts and tools without creating problems in the Six Sigma structure, and this can generate more high-and-quick impacts [5], [6]: • In order to capture all possible defects in the observed system, defects could be defined and categorised using Lean seven wastes: - Rejects: errors in products, information, documents; includes any rework and scrap, - Transportation: movement of products, materials, tools, documents, items of any type, by any means including electronically;

International Journal ’’Total Quality Management & Excellence’’, Vol. 38x, No. 4, 2010. Table 2. The synergy of Lean and Six Sigma [4] Lean contribution Established methodology for improvements Focus on customer value stream Project-based implementation Understanding current conditions Collect product and production data Document current layout and flow Time the process Calculate process capacity and Tact time Create standard work combination sheets Evaluate the options Plan new layouts Test to confirm improvement Reduce cycle times, product defects, changeover time, equipment failures, etc.

Six Sigma contribution Policy deployment methodology Customer requirements measurement, crossfunctional management Project management skills Knowledge discovery Data collection and analysis tools Process mapping and flowcharting Data collection tools and techniques, SPC Data collection tools and techniques, SPC Process control planning Cause-and-effect, FMEA Team skills, project management Statistical methods for valid comparison, SPC 7M tools, 7 QC tools, DoE

Figure 6. One approach – Roadmap for Lean and Six Sigma integration Over production: doing work not required or not adding value or features for the end user, such as using materials of higher grade than required, producing to tighter tolerances than necessary, etc; - Waiting: waiting for next step, waiting for parts, for information, for instructions, for schedules, for equipment, for software, for previous process to finish, etc - Over processing: producing more than the downstream customer immediately requires. multiple inspections, reviews and approvals; - Movement: unnecessary motion (motion not creating value) of products, raw material, tools, people, including bending, reaching, turning, lifting, and equipment left idling,; - Inventory: backlog of work • During implementation of a Six Sigma program, in general, 5S is could help in organising, cleaning, developing, and sustaining a productive work environment; Poka-Yoke could be used for designing an error free flow or way of working; -

and value stream mapping can help to understand the flow of the material and information as a product makes its way through the value stream. • In DMAIC phases, the following Lean tools are commonly integrated: Seven wastes could help in detecting and categorising all of the possible defects (visible or hidden) in the system. Valueadded to non-value-added ratio; Takt time. Takt time is the rate at which a completed project needs to be finished in order to meet customer demand. During the Measure phase, the actual cycle time should be measured. In Analyze phase, the cycle time can be compared with the customer' demands in terms of the delivery time. If a discrepancy exceeds the tolerance, improvements would be needed to match the cycle time with the takt time for the system, as demanded by the customer. Value stream mapping can show the flow of materials and information, and categorizes activities into value adding and non value adding. The focus is on identifying and eliminating the "pure waste" non-value added activities in each

International Journal ’’Total Quality Management & Excellence’’, Vol. 37, No. 1-2, 2009. process step and reducing the wait time between consecutive steps wherever possible. These help make a process more compact, which is related to a benefit in process improvement projects aimed at reducing variation. This tool also can be a part of a Kaizen cycle, incorporated within the Analyze and Improve phases. In the absence of concrete statistical data, 5 Why's could be applied (asking "Why?" five times to discover the root cause of the problem), to make the task more manageable.

One possible framework for integrating Lean into Six Sigma DMAIC approach is presented at figure 7. The outer circle shows Lean tools implemented in the phases of DMAIC cycle. It is interesting to note successful implementation of Lean tolls not only in DMAIC, but also in DMEDI approach that deals with new product, service or process. First two steps are identical to DMAIC, but third, fourth and fifth steps mean, respectively: Explore options; Develop a new product, process or service; and Implement the best solution [7].

Figure 7. One approach – Integrating Lean within Six Sigma [2]

4. INSTEAD OF CONCLUSION LSS synergy can help in sustaining the business, in general, by [1]: - defining product line in terms of customer value, - developing more capable processes and highquality products, - reducing all kind of wastes - shortening product time-to-market, - reducing inventory requirements, - spreading common goals and shared knowledge in a supply chain, preserving supplier relations - allowing faster response to changing market demands and customers needs, - preserves environmental resources It is important to stress the long-term sustainability of LSS integrated program. It requires the top-to-down reinforcement that includes: training; full involvement of key stakeholders in implementation; establishing LSS as corporate culture, not as a “current fashion”; and diverse representation in various functions managers, finance, logistics, manufacturing, etc. Whether applying integrated Lean Six Sigma from the scratch, or introducing Lean principles and tools

into an existing Six sigma, this synergy can boost both the tangible benefits and the turn-around time for process-improvement projects at the company [5]- [7]. Anyhow, it is essential to establish the right balance between the data-driven and quantitative basis of Six Sigma and the Lean mindset and problem solving, according to the actual needs of the observed system.

REFERENCE [1] http://ocw.mit.edu [2] http://www.sixsigmainstitute.com [3] Bertels, T., Integrating Lean and Six Sigma, http://www.isixsigma.com, 2010. [4] .Pyzdek, T., Six Sigma Handbook, McGraw-Hill

Companies Inc., New York, 2003. [5] Shubhajit, R., 5 Lean Tools and Principles to Integrate into Six Sigma, http://www.isixsigma.com, 2010. [6] Johnson, M. E, Dubikovsky, S. I., Incorporating

Lean Six Sigma into an Aviation Technology Program, Proceedings of SEFI 2008 Annual Conference, 2008. [7] Byrne, G., Lubowe, D., Blitz A., Driving operational innovation using Lean Six Sigma, IBM Institute for Business Value, 2007.

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