Introduction to Lean Six Sigma & DMAIC: Part I

Establishing Complementarity
Course Overview
Dr. Douglas Montgomery, Regents Professor , ASU
Dr. Dan Shunk, Professor, ASU
Desired Learning Outcomes
• To be exposed to the concept of Operational Excellence and the
business ramifications.
• To be exposed to the history of Lean and Six Sigma and their
contributing developers
• To be introduced to the philosophy of Lean
• To be introduced to the principles of Lean
• To build the bridge between Lean and Six Sigma
• To be introduced to the philosophy of Six Sigma
• To be introduced to the principles of Six Sigma
• To be introduced to the tools of Six Sigma
• To understand the cultural implications of Lean and Six Sigma and
how to make change happen.
Motivation
• You are taking this course for a reason:
• Eliminate wasted time and resources?
• Build quality into workplace systems?
• Find low cost, reliable alternatives to expensive/new
technologies?
• Streamline the creation of business processes that need to be
“perfect”?
• Build a learning culture centered on continuous improvement?
Introductions
Dr. Dan Shunk
• Professor Emeritus, Industrial Engineering, ASU
• PIMSA Chair, CETYS Univesidad
• Adjunct Professor, Milan Polytechnic
• Married ~ 48 years
• Five children
• All married
• 10 grandchildren
• ASU since 1984 – LEAD Winner in 1990
• VP-GM, GCA Corporation
• Manager, Group Technology, International Harvester
• Manager, Industrial Engineering, Rockwell - Collins
• Co-founder, USAF “ICAM”
• Ph.D., Purdue Industrial Engineering
• Hoosier
Introductions
Dr. Douglas Montgomery
• Regents Professor, Industrial Engineering, ASU
• Foundation Professor of Engineering at ASU
• John M. Fluke Distinguished Professor of Engineering, Director of Industrial
Engineering and Professor of Mechanical Engineering at the University of Washington
in Seattle
• BSIE, MS and Ph.D. degrees from Virginia Tech
• University Distinguished Visitor at the University of Manitoba
• Office of Naval Research, the National Science Foundation, the United States Army,
and private industry sponsored research
• Supervised 45 doctoral dissertations and over 40 MS theses and MS Statistics Projects
• Author of thirteen books, over 160 papers, member of the Editorial Board of the
Journal of Quality Technology, the International Journal of Production Research,
Journal of Applied Statistics, Journal of Probability and Statistical Science, Naval
Research Logistics and Quality Engineering
The Course
Lean Six Sigma Green Belt
Course Outline
• Formal Introduction – 1 session
• Lean
* RDdmaicSI for Lean – 9 sessions
• Quality
* dmaic for Quality – 13 sessions
• Analyzing Relationships between variables - 3 sessions
• Design for Six Sigma - 3 sessions
• Six Sigma for Transactions - 1 session
An Introduction to Lean
Our Philosophy – Up Front!
• First, we need to simplify and establish what truly adds value:
o This is LEAN.
• Second, we need to integrate and get all the remaining
processes in control:
o This is SIX SIGMA.
• Ultimately, iffff we still have margin available, we will
automate.

Simplify : Integrate : Automate!

The Premise: Lean and Six Sigma are Complementary
• Lean and Six Sigma are complementary!

Lean says: Six Sigma says:

Six
“Don’t do a Sigma “Once we can identify value
process that added processes
does not add Lean let’s absolutely minimize the
Value!” variability and get them in
control
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01

Non-
0.005

Non-
VA
0

VA VA
60 70 80 90 100 110 120 130 140

0.14

VA VA
0.12

0.1

0.08

0.06

0.04

0.02

0
60 70 80 90 100 110 120 130 140
-0.02

Don’t waste your efforts employing six sigma principles and

Six Sigma Black Belt time on something that does NOT add
value!
 An Example
• Kenworth Truck Plant, Mexicali, Mexico
• Phase I
• Began assembling 8
trucks per day.
• “Leaned and Applied Six
Sigma to the Four Walls”
• After 18 months hit 22
trucks per day!
• 275% Improvement
• Same workforce!
• Phase II
• Started at 22 trucks per
day.
• “Leaned and Applied Six
Sigma to the Enterprise”
• After another 18 months
we were at 42 trucks per
day!
191% Improvement
Same workforce!
What is Lean?

Elimination of Waste!

The heart of Lean is the recognition and

elimination of waste!
Three Types of Activities Performed
• We need to sensitize you to types of activities performed:
1. Those activities that truly ADD VALUE.
2. Those activities that do NOT ADD VALUE but are needed
for the Value Add to happen.
3. Those activities that DO NOT ADD VALUE (muda).

• Our process shall let you do the following:

1. Focus on the Value Adds
2. Eliminate the Non-Value Adds
Examples
• VALUE ADD:
o Insert component into a Printed Circuit Board
o Ship Product
o Perform Service
• NON-VALUE ADD but NEEDED:
o Schedule PCB insertion operations.
o Inspect the finished product!
o Wrap protective materials around product to ship.
o Provide resources to perform service.
• WASTE:
o Pick up a dropped component.
o Track a lost package.
The History of Lean
Taking a Systems Approach to the way we do business!
Chronologically
• Lean did NOT start with Toyota:
o It springs from many inventors who saw “waste”!
• Standardized Work (IE)
o Frederick Taylor
• Motion Study (IE)
o Frank Gilbreth (therblig!!)
• Cellular Design
o Opitz, 1947
• The Systems Approach
o Churchman, 1966
• Quality Movement
o Deming, et.al.
• The Toyota Team
o Shingo, Ohno, et.al.
• Global Launch
o Womack, et.al.
Toyota Production System
• No discussion on lean is appropriate without mentioning the Toyota
Production System (TPS).
• For all intents and purpose, Toyota created the Toyota Production System
and thus the concept of Lean Production (oftentimes referred to as Lean
Manufacturing)
o Ohno, 1988;
o Womack, Jones & Roos, 1991;
o Monden, 1993;
o Rother & Shook, 1999;
o Fujimoto, 1999;
o Liker, 2004.
• Perhaps the most concise representation of the TPS, and its 14 principles, is
the “4P” model Liker (2004) presents.
Creating a Consistent Approach
• Establish One Common Continuous Improvement Base
Line:

“RDdmaicSI”
used for all!
Lean

Sustainability
Six Sigma Governance,
Risk and Compliance
Built Upon a Consistent Framework
• R - Strategically Recognize: Recognize a strategic gap
• D - Strategically Define: Define what is needed to fill the gap
We will formally
• d - Define What problem needs to be solved? develop starting
• m - Measure What is the current capability of the process? later this week.
• a - Analyze When and where do waste occur?
• i - Improve What are the improvement tools or strategies?
• c - Control What controls or metrics can be put in place to sustain the
gain?
• S – Standardize: Achieve standard work across the enterprise
• I – Integrate: Integrate this into all facets of the enterprise
RDdmaicSI
Principles of Lean
• Value –
o What does my customer want?
o What is my customer willing to pay for?
• Value streams – Is all work that I do providing value to the
customer?
• Pull – Do I do work only when it’s needed?
• Flow – Does work flow continuously through the value chain?
• Perfection – How good is the work I perform?

Womack, James and Daniel Jones, Lean Thinking, Free Press, 2003.
The Foundation of Variability
Variability Exists Everywhere
How We Manage Variability is Critical
Is an Ounce of Prevention
Really Worth a Pound of Cure?

• Quality is Free – Philip B. Crosby

• This book challenged the assertion that it would cost more to produce higher-quality goods and provided an
argument that it would cost more to produce a low-quality product.
Is an Ounce of Prevention
Really Worth a Pound of Cure?

• Generally, yes.
• But we need to be strategic about how we do it
• Throwing resources at problems doesn’t always
(usually) work – it may fix a short-term problem but it
doesn’t fix the system
Modern View of Quality
• Quality is inversely proportional to variability
• Quality is inversely related to waste
• “Your Customer doesn’t see the mean of the
process, s/he only sees the variability around the
target that you have not removed” - Jack Welch
How Variability Hurts
Variation exists everywhere!
• Meeting delivery schedule and delivery accuracy
• Reducing average and variability in days outstanding of accounts receivable
• Optimizing payment of outstanding accounts
• Minimizing costs of public accountants, legal services, other consultants
• Inventory management (finished goods, WIP)
• Forecasting accuracy & timing
• Improving audit process
• Closing books, accuracy of journal entry & posting (3-4% error rate typical)
• Reducing variability in cash flow
• Payroll accuracy
• Purchase order accuracy and rework
Listening to the Guru’s
The Historical Perspective
Philosophical Background
• Many people have contributed to the statistical methodology of quality improvement
however three individuals emerge as the leaders:

o W. E. Deming,
o J. M. Juran,
o A. V. Feigenbaum and others.
 W. Edwards Deming
(1900 – 1993)
• He was educated in engineering and
physics at the University of Wyoming
and Yale University.
• He worked for Western Electric and
was influenced greatly by Walter A.
Shewhart.
• Following World War II he became a
consultant to Japanese industries and
convinced their top management of the
power of statistical methods and the
importance of quality as a competitive
weapon.
Deming’s 14 points
1 Create a constancy of purpose focused on the improvement of products
and services
2 Adopt a new philosophy that recognizes we are in a different economic era

3 Do not rely on mass inspection to “control” quality

4 Do not award business to suppliers on the basis of price alone, but also
consider quality
5 Focus on continuous improvement
6 Practice modern training methods and invest in on-the-job training for all
employees
7 Improve leadership, and practice modern supervision methods
Deming’s 14 points
Deming’s Seven Deadly Diseases of Management

1 Lack of constancy of purpose

2 Emphasis on short-term profits
3 Evaluation of performance, merit rating, and annual reviews of performance

4 Mobility of top management

5 Running a company on visible figures alone
6 Excessive medical costs
7 Excessive legal damage awards
Joseph M. Juran (1904-2008)
• Born in Romania, immigrated to the US
• Worked at Western Electric, influenced by Walter Shewhart
• Lend-lease executive in WW II
• After WW II, he became the head of the Department of
Administrative Engineering at New York University.
• Emphasizes a more strategic and planning oriented
approach to quality than does Deming
• Juran Institute is still an active organization promoting the
Juran philosophy and quality improvement practices
• He was the co-author (with Frank M. Gryna) of the Quality
Control Handbook, a standard reference for quality methods
and improvement since its initial publication in 1957
Juran Triology
• Juran took a more strategic approach to quality management and
improvement than Deming.
• Juran Triology:
o Planning
§ Identify customer needs
§ Design and develop products/services and processes
§ Plan for quality improvement on a regular basis
o Control
§ Ensure that products and services meet requirements
o Improvement
§ Aims to achieve performance and quality levels that are higher
than current levels.
Armand V. Feigenbaum
(1922–)
• Feigenbaum first introduced the concept of companywide quality control in his
historic book Total Quality Control (1951)
• He proposed a three-step approach to improving quality:
o Quality leadership,
o Quality technology, and
o Organizational commitment.
• He proposed a 19-step improvement process, of which use of statistical methods
was step 17.
• He initially suggested that much of the technical capability be concentrated in a
specialized department which is in contrast to the modern view.
• Feigenbaum is concerned with organizational structure and a systems approach to
improving quality which is important.
Other Contributors
• Kaoru Ishikawa
o He led JUSE during its early growth years and ultimately became one of the most
important and influential leaders of the Japanese quality improvement movement.
o He developed many basic quality improvement tools, the most famous of which is the
cause-and effect diagram (also called the Ishikawa diagram)
• Philip Crosby
o Crosby believed that quality was a source of profit and opportunity for a company
o He wrote two widely read books on quality; Quality Is Free (published in 1979), and
Quality without Tears (published in 1984).
o These books were easy to read and promised that improvement was possible by relying
on the behavorial and motivational aspects of quality improvement.
o A central feature was the zero defects concept
Other Contributors
• Genichi Taguchi
o He believed that unwanted
variability was a leading cause
of poor quality.
o He argued that any deviation
from the ideal or target value
for a quality characteristic
resulted in a loss, not just to the
customer and the business, but
to society.
o the losses begin to occur as
soon as the quality
characteristic deviates from the
target.
Conclusion
• Lean and Six Sigma are complementary programs!
o They can not be perceived as competing.

• We will consistently use the same “RDdmaicSI”

methodology to support both efforts.