Lean and Six Sigma tools are applied to processes in all types of manufacturing enterprises.
Toy companies, aircraft industries, tool and die makers, computer manufacturers, exercise equipment manufacturers, and others all have processes that are good candidates for Lean Six Sigma initiatives.
Since all manufacturing organizations share a purpose – making products for customers – they all have a number of processes in common that can benefit from Lean Six Sigma improvement. For example, consider these processes.
Quality Assurance
Improvement in quality assurance processes reduces numbers of product defects, produces fewer customer complaints and claims, and reduces the amount of rework and scrap.
Operations
Operations processes can be improved to reduce lead times, late orders, average cycle time per order, instances of emergency maintenance, and scrap and rework.
Purchasing
Purchasing processes could be improved to reduce the cost per invoice, reduce purchasing errors, and consolidate the number of suppliers.
Distribution
Distribution processes can be improved to consolidate the numbers of shipments, reduce freight charges, reduce the level of returned products, and eliminate late deliveries.
In this chapter, you will analyze two case studies in which Lean Six Sigma is used to resolve problems in a manufacturing context. Practical application of Six Sigma and Lean throughout organizations also helps to understand relationships among business systems, processes, and stakeholders.
As you follow along in the first case study, pay particular attention to the business problem, the tools that are used, the integration and use of Lean and Six Sigma, and the results.
Intent on maintaining its competitive advantage and position as number one in its industry, a large playground equipment manufacturer launched a Lean initiative. Management was intent on reducing lead time, improving efficiency, and eliminating scrap and waste.
An external consulting group was hired to provide training in Lean thinking and techniques. The group also provided Lean leadership while key people within the organization gained the expertise needed to assume leadership roles.
The initiative began by targeting low-hanging fruit. This started the ball rolling and got everyone on board with the practice of continuous improvement. Eventually, a full range of Lean tools and techniques were used, including:
- value stream mapping
- cross-functional teams
- gemba
- kaizen events
- the PDCA cycle
After two years, the company had cut lead time by 40%, improved productivity by 8%, and decreased scrap from 0.8% to 0.5%. It had also achieved a just-in-time (JIT) approach to inventory management and effected a culture change throughout the organization. Workers were highly motivated by continuous improvement, and expressed pride in their work and in their company.
However, clearing out the low-hanging fruit revealed a deeper, more persistent problem.
Pinholes were discovered in the PVC coating on the pipes used to make the equipment. The pinholes created a large amount of scrap and generated returns from unhappy customers who received the defective equipment.
To resolve the problem, management turned to Six Sigma tools and techniques.
A cross-functional team was formed. The team spent time on the shop floor observing the process and talking to the workers. Measurements were taken of temperatures, PVC thicknesses, and tolerances in order to perform the rigorous analysis demanded by Six Sigma.
Detailed process mapping enabled the team to isolate the root cause of the problem to the welding process. Brazers were given no specifications on how to create their welds. They were expected to use their own judgment to achieve “a good flame” on their torches. Lack of a standard operating procedure (SOP) permitted variation to enter the process.
To rectify the problem, an SOP was immediately created to instruct brazers how to achieve the right flame. This eliminated variation and vastly reduced the incidence of pinholes in the PVC.
During its analysis, the team identified another source of variation in the priming process. Operators were expected to remember which racks of pipes to send to the priming baths. Sometimes, they forgot. The team solved this problem easily with poka-yoke. An indicator light was installed on each rack to show which racks had been primed and which still needed to be primed.
In this case study, you examined how the application of Lean Six Sigma helped to ensure that a company would retain its position as industry leader. You learned about the following elements:
Business Problem
The playground manufacturer wanted to retain its position as number one in the industry.
Goals of The Improvement Initiative
The goals were to reduce lead time, eliminate waste, and improve efficiency.
Tools
A full complement of Lean tools and techniques was used, including value stream mapping, cross-functional teams at the worker level, gemba, kaizen events, and poka-yoke. Six Sigma statistical tools were also used to analyze and root out the cause of a more pervasive problem.
Results
Two years of Lean led to a reduction in lead time, an improved rate of efficiency, and the elimination of scrap from the value chain. Applying Six Sigma resolved a specific, pervasive problem – pinholes in the PVC.
Sometimes the real problem can be solved best with Lean techniques; other times Six Sigma is at the heart of the solution. Finding the right mix is an important part of the improvement initiative.
A factory in the U.S. that produces commercial refrigeration equipment adopted Lean to reduce cycle time and eliminate waste. However, a year later, refrigeration units with leaks were still coming off one of two production lines. The company was incurring expensive rework loops, warranty claims, and – most notably – widespread customer dissatisfaction.
Management charged a Lean Six Sigma team with stopping the leaks.
Jim, an experienced Six Sigma Black Belt, led the improvement team. Jim’s goal was to analyze and resolve the problem using a five-day kaizen event.
The team used the following tools and techniques to identify and analyze the root cause of the leakage:
Pareto Analysis
A Pareto analysis indicated that 80% of the leaks were occurring in the return bend of the coils. The return bend is a U-shaped piece of tubing that is connected to the straight tubing by brazing, a procedure that is similar to soldering. The team decided to focus on the brazing process.
Cause and Effect Diagram
The team performed a root cause analysis with a cause and effect, or fishbone, diagram. Team members listed the materials, methods, machinery, measurement, manpower, and environmental influences on each step in the brazing process.
Process Map
Next, the team created a process map and drilled down. Team members identified 20 separate steps involved in brazing, such as cutting a piece of tube, installing it, and brazing it to the return bend.
Having focused on the brazing process, the team mapped out the steps and spent two days making hundreds of measurements for each of the 20 steps involved.
Measurement data revealed an astonishing fact. There were dozens of variations in all of the steps, from how far the coils were from each other to how much the tubes stick out before being connected to the return bend.
However, while variation is never desirable, not all of it contributed to the leaks. The question remained: Which variations produced leaks?
The team compared the brazing process in each production line. The tubes on the production line producing units with no leaks stuck out much farther than the tubes on the other production line. Longer tubes mean more overlap and better coverage of brazing material on the return bend.
This turned out to be the cause of the leaks. The solution was to increase and standardize the overlap.
During the analysis of the brazing process, the team also observed that workers were not getting feedback on the quality of their work. Using Lean principles, the team corrected that situation immediately. Defective joints were returned to brazers for correction, which resulted in higher quality at the source.
As often happens during analysis, the team found another major problem in one of the brazing steps. Although unrelated to the leaks, the problem was significant enough that the team was given the authority to fix it. The fix produced a significant increase in throughput.
In all, the improvements resulted in a 60% reduction in leakages and a 10%reduction in the cost of quality.