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Navigating Lean-Sigma Alphabet Soup

A Short Course in Navigating Lean Alphabet Soup

There are a great many acronyms in Lean Thinking. There are things like 5S, TPM, SMED, ZQC, FEI, OEE, and so many others. Regarding acronyms at the beginning of the transformation: ignore them, versus getting distracted by them.

The “Key” to the Lean Toolbox

The very first thing you do is to follow the five steps of “Lean” as specified in Lean Thinking. As discussed in the “Value Stream” document, first you establish Value according to the end customer, and then you define the “Value Stream” by flowcharting every single step necessary to produce that Value. For each step, you ask two sequential questions:

1) “Would the end customer complain if you removed this step?”

If “Yes!”, then this step adds Value.

If “No!”, then this step does not add Value and you need to ask the second question.

2) “Can I get rid of this step at this time?”

If “No!”, then this step is “Type 1 Muda.” (This does not mean that you cannot eventually get rid of it, it just means you can’t get rid of it right now. An example of this is 100% product inspection, because with systemic-process controls and changing the system that produces the errors in first-place, you can reduce the inspection to periodic samples with the same effect.)

If “Yes!”, then this step is “Type 2 Muda.”

After identifying all of the Type 2 Muda in your Value Stream, redraw the Value Stream as a “Future State Map” WITHOUT any of the Type 2 Muda! Then, as quickly as you can, reconfigure your process to conform to the Future State Map!!! (Note: 75% of the time you spend applying the Lean tool box will be spent on reconfiguring your process according to your “Future State Map.”) Next, attempt to Pull a greater amount of Value through the process and see where your process breaks… then iterate it AGAIN!!!;-) (Please see the Helix article.)

THIS PROCESS IS YOUR KEY TO THE LEAN/SIGMA ALPHABET SOUP TOOLBOXES!

The Reason for the Existence of the Alphabet Soup

The reason that the acronyms exist is because they represent tools that were used across dozens or hundreds of companies in completely different industries to address specific types of flow-stoppages or flow-constraints. People got tired of saying their entire names and produced acronyms!

Wherever your flow is breaking when you try to “Pull” a little bit more product or “Value” through it, whether you are producing a product or a service or whether you are producing information to feed a process, that is the time when you learn and apply the proper tool from the well-established tool box!

Warning! Do not just pick acronyms such as Total Productive Maintenance (TPM) or any other particular acronym (with the possible exception of 5S) to begin your implementation. The whole point of “Flow and Pull” is to DIAGNOSE where your particular system is the most vulnerable.

I have seen companies attempt to establish the acronyms before they establish Flow and Pull resulting in no significant improvement for their efforts, discouragement and cessation of the transformation. It does not work! They do not ever see the increases in productivity, decreases in throughput time, decreases in quality problems, increases in profitability, etc., so they just quit, and view all of these methods as ineffectual… what a waste! 

Examples

1st example: ZQC

ZQC stands for zero quality-control. It is a set of tools to increase your capacity by preventing quality issues from stopping or decreasing your flow of “value” to the process’s final customer. In a batch-and-queue environment, when you send, say, 400 pieces to the next station, if they get a dozen that are bad, they put rejects off to the side and they keep going. It takes a Vice President of Manufacturing’s signature to inspect the entire lot and accept or reject the entire lot. This almost never happens. So their quality problems continue under the radar… basically not even registered or noticed. This “leakage” comes right off that organization’s bottom-line. However, it is hidden from senior management, so they cannot correct it!

In a Lean environment, when you forward four products to the next station and one or two of them are bad, it stops the flow of the entire process, because there are no piles of Work in Process Inventory between the various workstations in your process. This stoppage of flow becomes the Vice President of Manufacturing’s problem immediately, so they focus resources to fix that flow-stoppage, be it bad machine maintenance, improper operator training, contaminants entering the system or exiting the system, or whatever. The resources to fix the problem at its source are focused on that problem, so the problem goes away. This is the essence of Six Sigma and quality improvement. But it is still only one of the lean manufacturing acronyms. However cool this sounds, do it AFTER establishing “Flow and Pull”… in that order.

2nd Example: SMED

SMED (Single Minute Exchange of Dies) or “quick changeovers.” Until you define the Value Stream and try to “Pull” more “Value” through your process, you won’t know which areas to change over more quickly. You may have some suspicions, but until you try to “Pull” more “Value” through your process you won’t really know which areas are constraining “Flow.” The Single Minute Exchange of Dies techniques were introduced in the sheet-metal-stamping industry, where the tools used to stamp out, for example, automobile body parts weighed multiple tons (sometimes 20 – 100 tons) and would take two to three shifts to change over. The idea of Single Minute Exchange of Dies is to be able to change those tools in single-digit minutes, in other words, in less than 10 minutes! The amount of inventory up and down the entire Value Stream from a very long change-over operation becomes very, very large. This is because Work-In-Process inventory acts as a buffer between sequential workstations to protect the downstream workstation from inability to get needed information or material from the upstream station. This applies whether these sequential workstations are located in the same plant or in different plants, or even in different businesses. (When the sequential workstations are in different businesses, we call the Work-In-Process inventory for the downstream station “Raw Material” inventory, even though to the final customer, this is all one process.)

If the change-over times of the upstream station are reduced, especially if they are reduced significantly, the risk that the downstream station will not get supply is similarly reduced: the upstream station is more able to produce what is actually consumed by the downstream station. Therefore the risk buffer, the Work-In-Process inventory between the two stations, can be reduced in proportion to the reduction in setup time for the upstream station. Subsequently, reducing setup times, especially throughout a process, reduces the risk of each sequential downstream station not having supply.

If you can eliminate, or even reduce, change-over times, you can eliminate a great many problems! As an example, you can reduce the distance between workstations in order to hold all that Work-in-Process inventory! With change-over times being eliminated across an entire process, and subsequently the inventory between each process being eliminated or at least reduced materially, you can decrease your process-throughput-time (door-to-door) by 80 to 90%, fairly regularly! This means that your financing cycle (the time between when you pay for raw materials and when you get paid for them) shrinks by the same factor. This in turn requires less working capital on your finance books as well as less rework, obsolescence, and maintenance to your physical inventory! In addition, you can reduce invisible quality errors or bad tool maintenance or improper training that produces systemic quality errors.

Although you may not have any 50 tons punch press dies in your facility (or for that matter in your back office information-flow processes), SMED principles still produce the same sorts of throughput-time decreases, when applied across all steps in an entire process. Again, as cool as it sounds, do SMED AFTER establishing “Flow and Pull.”

3rd Example: OEE

OEE means Overall Equipment Efficiency. This is a composite measure that takes things into account such as machine downtime, machine-slow-downs from their rated speeds, losses from quality escapes (or in other words, if you make bad parts, it decreases the efficiency of your equipment), delays due to machines startup (for example, how many parts you have to make before you get a good part… reliably) and several other things. This is not something that you start up a “Lean Transformation” with. You only get into this AFTER you have established “Flow and Pull.”

Summary

DON’T SWEAT THE ACRONYMS! They are simply well established tools for use AFTER you have established Flow and Pull.