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Introduction to the Tools of Leanand Six Sigma
(LSS)Yellow Belt Training
Building new skills to improve quality and
management practices across HBD
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What You Should Learn Today

• How We Will Teach
• What is Lean Six Sigma?
• Key Aspects of Lean and Six Sigma Improvement
  Methodologies
• Overview of HBDs Lean Six Sigma Implementation
• Prior Projects Areas of Focus
• DMAIC Methodology Overview
• Tools to be Learned as a Yellow Belt

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How We Will Teach

• Focus for Approx. 60 Minutes in Class
• Deliver Pre-Class Reading Materials (Pre-Work)
• Introduce Key Concepts for Recognition and
  Everyday Usage
• Provide Real-life Examples and Opportunities for
  Discussion
• Encourage Participation by All
• Quiz Students to Encourage Learning and Memory
  Recall
• Ask for Immediate Feedback and Benefits
  Concerns (Bs Cs)

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Why Teach Me This Stuff?

• Culture is common thinking.
• Thinking drives behavior.
• Behavior drives results.
• Results create opportunities and security.

The Lean Six Sigma curriculum combines the
discipline and analytical tools of Six Sigma with
the time-based focus of Lean. Our goal is to
build and enhance skills among employees that can
improve quality and strengthen management
practices across HBD.
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Why Teach Me This Stuff? (cont)

• The tools and methodologies in Lean Six Sigma are
  useful not only in LSS projects, but in everyday
  tasks. These include
• Understanding Customer and Stakeholder Needs
• Identifying, Analyzing and Presenting Key
  Business Information
• Brainstorming on, Deciding upon, and Solving
  Complex Issues
• Revising and Simplifying Production-Related
  Processes
• Streamlining Administrative Processes and Support
  Tasks
• Understanding Variation
• Managing Cross-Functional Projects
• The more you understand what these tools are and
  the underlying philosophy behind them, the better
  you will be as an active team member in future
  projects.

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What is Lean Six Sigma?For HBD, Lean Six Sigma
Profit Power!

• Per-Unit Profit Per-Unit Price Per-Unit Cost
• Net Profit Sales Product Costs Overhead
  Expenses
• Lean Six Sigma offers you the power to
• transform operations into flexible, efficient
  plants
• needed to profitably survive and thrive
• in a competitive business landscape.

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The Money Map
Profit (or Loss) (Unit Prices x Volume Sold)
Costs Incurred

• Productivity
• Efficiency
• Quality
• Speed
• Flexibility

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Key Aspects of Lean

• Lean is Not New
• Popularized by Toyota more than 30 years ago.
• Many of its tools and concepts have been around
  for decades.
• Lean is Both Methodology and Philosophy
• Lean aims to eliminate waste (in Japanese,
  muda) in every area of a business, including
  production, customer relations, product design,
  supplier networks, and factory and business
  administration.
• Its goal is to incorporate less effort, less
  inventory, less time to develop products, and
  less space in order to become highly responsive
  to actual customer demand and to produce
  top-quality product in the most timely, efficient
  and economical manner possible.
• Lean Focuses on Customer-Defined Value
• A process step adds value if the activity adds
  form, fit or function to the product that is
  desired by the customer, and the customer is
  willing to pay you to conduct that activity.

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Key Aspects of Lean, cont

• Toyota Defines Seven Key Types of Muda (Waste)
• Overproduction Producing more than demanded or
  before it is needed, e.g., stored materials or
  inventories.
• Inventory or Work-in-Process (WIP) Material
  between operations due to large lot sizes or long
  process cycle times.
• Transportation Material movements, by
  definition, add no value to products, as they do
  not affect form, fit or function.
• Processing Waste Unnecessary or inefficient
  process steps simply add cost and time.
• Motion Effort to move workers and machinery or
  to transport materials adds cost and delay.
• Waiting Long changeover times, slow processing
  times, and materials handling tasks limit
  opportunities to make on-time deliveries.
• Defective Products Items that fail to meet
  customer specifications are pure waste, e.g.,
  returns, rework, scrap, and warranty costs.

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Key Aspects of Six Sigma

• Six Sigma is Not New
• In existence for more than 20 years at HBD since
  2002.
• Many of its tools and concepts have been around
  for decades.
• Six Sigma packages the tools and concepts into a
  clear and systematic roadmap for process
  improvement.
• Six Sigma is a Methodology
• The DMAIC problem-solving methodology is a
  disciplined thought process and tool guide used
  to solve business issues.
• Define / Measure / Analyze / Improve / Control /
  (and Verify).
• Variation is Bad (Evil)
• For most processes, a repeatable and predictable
  result is crucial.
• Six Sigma is designed to identify the key sources
  of variation and drive them out of the process,
  by understanding the key inputs, processes and
  outputs of business activities. Fix the process
  to get good results.

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Key Aspects of Six Sigma, cont

• Six Sigma has a Customer Focus
• Processes and problems must be viewed from the
  customers perspective.
• Internal customers (i.e., downstream departments)
  can be just as important as external customers
  (i.e., those who pay the bills).
• Six Sigma is Not Just for Manufacturing or Large
  Businesses
• Success can be found in all types of companies
  and all kinds of processes including at HBD.
• ANDSix Sigma and Lean are Not Mutually Exclusive
• Without a basic understanding of both
  methodologies, you risk trying to use a
  screwdriver to drive a nail.
• Ask, What tool or technique is most useful to
  help solve my problem?

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Overview ofHBDs LSS Implementation

• LSS supports HBDs long-standing corporate
  strategies
• Customer Satisfaction
• Marketing Excellence
• Working Capital Management
• Cost Reduction and Containment
• LSS was introduced into HBD in 2002, first with
  the Executive Office and General Managers and
  then locally at the plants
• 88 individuals in all 17 business locations
  trained in LSS (at 7/30/07)
• Projects have successfully touched both
  production and back-office (paperwork) processes
• 112 LSS projects initiated (as of 7/31/07) plus
  29 documented kaizens
• Over 6.65MM in hard-dollar and soft-dollar
  savings, cost avoidance, new-revenue
  opportunities, and working capital improvements
• LSS represents one key tool for on-going
  improvement efforts

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LSS Projects Areas of Focus

• Cost Reduction
• Product and Unit Costs, Overhead and Period
  Expenses, Scrap and Rework
• Cost Avoidance
• Regulatory Expenses, Capital Equipment Needs
• Capacity Increase
• Production Availability, Quick Changeovers,
  Equipment Utilization
• Customer Satisfaction
• On-time Delivery, Quotation and Production
  Lead-time, Quality, Cost (Pricing)
• Health Safety
• Ergonomics
• Flow
• Process Speed, Travel Distance, On-time Delivery,
  Lead-time
• Working Capital Reduction
• Finished Goods, Work-in-Process and Raw Materials
  Inventories
• New Revenue
• Revised or New Products

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Whos Who inHBDs LSS Project Teams

• Corporate Champion (Nelson Law Dublin, OH)
• Helps identify possible projects Selects /
  approves projects for launch
• Team Facilitator (Black Belt or Green Belt)
• Formally-trained team leader who guides teams
  analyses and activities
• Project Sponsor
• Process owner with responsibility / authority
  over process under study
• Accountable for long-term sustainability of
  projects gains and results
• Core Team Members (managers, supervisors,
  operators)
• Cross-functional subject matter experts who live
  with the process Mandated to meet regularly to
  make project progress
• Ad Hoc Team Members (managers, supervisors,
  operators)
• Additional subject matter experts who may be
  called upon occasionally for help
• Supporting Supervisors, Managers Coworkers of
  Team Members
• Not direct part of project team activities Must
  plan for / support ways to allow core team
  members to meet regularly

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Dynamics of Process ImprovementThe Funnel Effect
Project Charter
Ideas Guesswork
Define Phase
30 - 50 Inputs
10 - 15 KPIVs
Measure Phase
Data Information
8 - 10 KPIVs
Analyze Phase
Root Causes
Improve Phase
Experiments Changes
3-6 Critical KPIVs
Control Phase
Documentation Controls
KPIV Key Process Input Variable KPOV Key
Process Output Variable
Optimized Process
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DMAIC Methodology OverviewThe Five Phases of
Every LSS Project

• DEFINE
• Define opportunity, project scope, potential
  benefits and resource needs
• MEASURE
• Determine process map and metrics Get baseline
  performance levels Define customer requirements
  for success Display collected data
• ANALYZE
• Explore root causes of process variation, poor
  process flow and current underperformance
• IMPROVE
• Brainstorm and prioritize potential solutions
  Pilot-test selected changes Select and implement
  preferred solutions
• CONTROL
• Complete transition back to process owner
  Confirm that new process is stable Document
  control plans Identify and transfer best
  practices

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Yellow Belt Curriculum Objectives

• Through the Yellow Belt curriculum, every
  employee should
• Understand that Lean and Six Sigma are all about
  ensuring quality in terms of the Voice of the
  Customer
• Understand how data analysis drives business
  decisions
• Understand how root cause analysis drives
  solution implementation
• Understand the basics of metrics to describe
  overall business health
• Understand the use and presentation of data to
  develop insights and achieve goals
• Understand the importance of identifying and
  controlling process variation and thus costs
• Understand the application of control mechanisms
  to sustain changes

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Tools to be Learned

• Team Problem Solving and Team Effectiveness
  (Working in Teams)
• Cross-Functional Teams
• Characteristics of Effective Team Meetings
• Project Charters and Meeting Agendas
• Voice of the Customer (Knowing What is Important)
• Sources of the Voice of the Customer
• Critical-to-Quality Factors and Critical Customer
  Requirements
• Idea Generation and Grouping (Working with Ideas)
• Brainstorming Force Field Analysis
• Cause-and-Effect Diagram / 6Ms Root Cause
  Analysis / 5 Whys
• Affinity Diagram Nominal Group Technique
  Multi-voting
• Data Collection, Analysis and Presentation
  (Working with Numbers)
• Process and Business Metrics
• Data Collection Plan
• Check Sheet, Process Study Log and Other Data
  Collection Forms
• Data Stratification and Segmentation
• Histogram, Run Chart, Control Chart and Other
  Graphical Presentations of Data

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Tools to be Learned, cont

• Decision-making Tools (Working with Facts)
• Pareto Analysis Pareto Chart
• Understanding and Explaining Process Variation
• Cause-and-Effect Matrix and Other Prioritization
  Selection Tools
• Speed and Flow Implementation (Ensuring Value)
• Process Mapping and Flowcharts
• Value-Add vs. Non-Value-Added
• 5S / Workplace Organization
• Spaghetti Diagram (Workflow) and Work Cell Layout
• Quick Changeover Setup and Changeover Reduction
• Pull-based Flow and Replenishment
• Defect Prevention and Mistake-Proofing (Quality
  at the Source)
• Standardized Work and Best Practices
• Visual Workplace Visual Aids and Learning Tools
• Poka-Yoke (Mistake-Proofing) Devices
• Preventative Maintenance (Total Productive
  Maintenance)
• Design Simplification and Parts Rationalization

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Continuous Improvement through Lean Six Sigma
(summary)

• Observe processes
• Identify problems and gather data
• Determine root causes of the problems
• Identify countermeasures / solutions, and
• Regularly participate in activities to simplify
  processes and eliminate waste, unevenness, and
  unreasonableness.

AndPractice non-blaming and non-judgmental
behaviors, as these are required for realizing
genuine continuous improvement.
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Takeaways

• Every person has a hand in generating profit and,
  in turn, job security.
• Lean Six Sigma is not solely about statistics or
  SPC (statistical process control) but is a very
  successful method to enable continuous
  improvement.
• Lean Six Sigma provides a powerful set of
  problem-solving tools and team effectiveness
  techniques to address complex issues.
• These proven tools and techniques can be used
  anywhere and we do mean, anywhere!
• Lean Six Sigma emphasizes team-based creativity,
  analytical thinking, and data-driven
  decision-making.