“A process that is not under control or is unstable displays patterns of variation. Unstable processes have variation that is unpredictable; the magnitude of the variation could change from one time period to another.”
“Sources of variation can be found in the process itself, the raw materials used, the operator’s (employee’s) actions or the environment. For example, software settings / updates, tool wear, humidity, heat, and over-adjusting a machine are all sources of variation.”
“Variation is attributed to what the customer sees and feels, including the best and worst performance of your product or service.”
Lean Six Sigma allows for the improvement in speed and performance of a process coupled with the reduction of waste and defects. If you ever find your current processes with high rework, client turnover, product recalls/crashes, and a plethora of errors it might be time to change your process design. As you will read below, I have noted a few benefits and reasons for Lean Six Sigma.
- Lean Six Sigma projects cut costs and expenses by eliminating waste (a result of inefficient or non-value added process steps).
- Whilst, the reduction of expenses helps companies yield higher revenues and profits. Improvements in quality and delivery also have the potential to increase sales and profit.
- When waste is eliminated, processes flow seamlessly and delivery times improve.
- As a process flows more quickly, the amount of inventory needed to keep the process moving is reduced and cash is freed up for investment elsewhere.
- By improving quality in each process, customer satisfaction is increased.
- Lean Six Sigma allows employees to work in valued added processes which in turn increases overall internal satisfaction and morale.
- The cost savings of implementing Lean Six Sigma, compared to the time and resources spent working on a project without Lean Six Sigma is typically 10 to 20 times the investment.
Notable Bookkeeping is a certified Lean Six Sigma company. Contact us today to learn more about our process improvement/Lean Sig Sigma services! We work with all industries and all company sizes.
I hope you’ve had a great week.
Today, I want to discuss quality costs and how they affect your bottom line.
“Quality costs can be found in prevention costs; detection costs (auditing), rework, scrap, downtime and material costs. “
Effective organizations know and pay close attention to their quality costs. They invest in prevention plans to ensure quality is always delivered to the customer and to safeguard their profits.
Hope you enjoyed this short Friday tip.
As always, “Success is continuous improvement.”
“Processes should be value driven and measured and the results carefully analyzed to identify opportunities for improvement.”
“The validity of a well-planned process improvement project is identified through value-added process mapping, problem isolation, root cause analysis and problem solution. Ultimately, the key to refining processes is to concentrate on the process from the customer’s point of view and identify and eliminate non-value added activities.”
Whenever there is a new product or service being offered to customers, there is a new process and value stream. Value Streams include both non-value-added and value-added activities and are the actions required to create a product or service from raw material until it reaches the customer. Value Stream Maps are more detailed than process maps as they include details, such as, cycle time, changeover time, uptime, process activities, operator self-inspection notes and customer specifications.
To successfully integrate value stream mapping into product development you must first accurately gather, understand, and specify the value desired by the customer. Collect real time data of the actual pathways of material and information flow. You may have to conduct several walkthroughs, first to assess the entire value stream and then to gather more detailed information. The best course of action is to work backwards as this reduces the probability of missing an activity because it takes place more slowly, without jumps to conclusions of assuming you know what happens next.
It is wise to utilize a pencil, paper and stopwatch when creating a process map. Once you have completed the map, remove the waste. Let the requirements of the customer guide you in making value flow from the beginning to the end of the process. The three most critical KPIs in a value stream map are: cycle time, value creation time, and lead time.
Cycle time refers to the time it takes to complete the overall process. Value creation time is rarely equal to cycle time. It is the time it takes to complete those work activities that actually transform the product into what the customer wants. Lead time is the time it takes to move one piece, part, product or service all the way through the process. All this information should be captured on the value stream map. When the value stream is complete, it will help you identify wasteful activities and realize opportunities for improvement. After you have identified the areas that need improvement, create an improvement plan that clearly states what needs to be done and when, has clear and visual measurable goals and objectives, complete with checkpoints, deadlines, and clear responsibilities.
When planning a process improvement project the most important question you have to ask is, “What problem are we trying to solve?” This question relates directly to the first step in DMAIC ( a Lean Six Sigma problem solving tool), which is to define the problem. After you answer this question you are ready to outline the criteria for an effective process improvement plan. Projects are usually one time occurrences created to fulfill specific goals for the organization.
Essentially, Lean Six Sigma projects must have the following 3 critical characteristics to be effective: performance, cost and time. The performance criteria allows us to understand what the project seeks to accomplish. Project expectations and goals should be written clearly, be realistic, made available to all project team members, and team members should also be held accountable for achieving them.
The second criteria, cost, provides insights into the resources needed to complete a project. Usually, money belts which are financial auditors provide an objective independent evaluation of the potential financial benefits of a project as well as the actual results achieved by the Lean Six Sigma project.
Finally, the third criteria, time, assures that team members are aware of the time-frame for the starting and ending of the project. Gantt Charts are excellent tools for monitoring all the activities associated with a project coupled with checkpoints which are smaller points throughout a project that are used to judge how far the project is toward completion.
It is imperative that all team members in a process improvement project understand the top 3 inter-related objectives of the project which are meeting the budget, finishing on schedule and meeting the performance specifications.