3. Program schedule
• 10.00 – 11.15 Session I
• 11.30 – 1.00 Session II
Lunch break 1.00 to 2.00
• 2.00 – 3.30 Session III
• 3.30 – 4.50 Session IV
• 4.50 – 5.00 Q / A
• 5.00 ----------- Close
4. Globalization and Liberalization......
• Globalization is the process of opening up of the local and
national markets to the global market.
• Globalization and Liberalization bring with it ,bag-full of
opportunities ( multi-fold growth opportunities/
Technology ) .
• It also brings with it tremendous challenges for developing
nations.
• While the per capita income of people in the developing
countries has increased it has thrown -
lot of challenges to compete and survive in the new
emerging global arena.
5. Mfg Cost Var Output at TP Stores cr. 4000
241 3972 +/- in WIP 178
PBIT Misc Output -206
1191 Input Cost
3731 Dir Malt 3000
NOPAT Dir Lab 86
810 Mktg PBIT Sales/Serv 6000 Malt OH 47
929 Cost of Sales 3972 Shop OH 261
ED on Sales 794 PGOH 36
TAX OD Adj Pers Rel Exp 89 Comm Exp 163
EVA 381 -65 T&C 54 Alloc Exp 189
361 Sales Pr Exp 8
Corp alloc NDC 19
86 ODE 63
WACC Estb 31
12% Other Exp 41
Cap Chg MMI 1034
449 Cap Emp WIP 370
3738 Net F Assets FG 53
601 Curr Assets Cust OS 3073
4597 Oth contl A 67
Net WC
3137
Curr Liabilities Vendor Cr 1273
1460 Cust Adv 33
OCL 154
Areas of focus
1. Reduction in Material &
labor costs
2. Reduction in Cycle time and
Lead time
3. Reduction in Rejections ,
Wastage
4. Increase in Productivity
How
Lean-Six Sigma
can help
improve EVA
6. What is then Waste (MUDA) ?
MUDA (Waste and Losses)Work (Value Adding)Activity +
Value Adding Activity
A process step that transforms the
shape, property, characteristic or
feature of a product or service in the
direction specified by the customer
Non-Value Adding Activity
Process steps that take time,
resources, or space, but do not add
value to the product or service and
thus doesn’t add value to customer
Set of
processes
Customer pays only for Value addition
=
7. How do we move towards becoming World class ?
.....
• Exceed customer’s
expectations
– Shrink the lead times
– Reduce the Input cost
– Highest quality
– After sales service
How ::
• A process put in place to
continuously meet / exceed
customer’s expectations
• Robust monitoring system
– 5S
– Visual Controls
– Lean Manufacturing
– Six Sigma
– 7 QC tools
8. Mfg CostVar OutputatTP Stores cr. 4000
241 3972 +/-inWIP 178
PBIT Misc Output -206
1191 InputCost
3731 DirMalt 3000
NOPAT DirLab 86
810 Mktg PBIT Sales/Serv 6000 MaltOH 47
929 CostofSales 3972 Shop OH 261
ED onSales 794 PGOH 36
TAX OD Adj Pers RelExp 89 CommExp 163
EVA 381 -65 T&C 54 Alloc Exp 189
361 Sales PrExp 8
Corp alloc NDC 19
86 ODE 63
WACC Estb 31
12% OtherExp 41
Cap Chg MMI 1034
449 Cap Emp WIP 370
3738 NetF Assets FG 53
601 CurrAssets CustOS 3073
4597 OthcontlA 67
NetWC
3137
CurrLiabilities VendorCr 1273
1460 CustAdv 33
OCL 154
Over Production
or
early Production
Inventory
Transportation
Wait
Over Processing
Movement
Defects
• Waste of Time & Energy
on work that eventually
has to be done
• Increases throughput
time
Un-tapped
Employee creativity
Follow up
• De-motivated work force
9. Lean Six Sigma
• Lean Manufacturing helps to
Identify / eliminate/reduce
process wastes
• The Tools used
– JIT
– TT
– VSM (Throughput Time)
– SMED
– TPM (OEE)
– 5S
– Gemba
– Kaizen
– Pokayoke
• Six Sigma helps to control
process variability to reduce
rejections & defects
• Through a structured DMAIC
process
– Define : Breakthrough results
– Measure : Hidden factory , Sd
Deviation , Mean , Bell curve
– Analyze : Scatter Diagram ,
Cause Effect ,Control charts ..
– Improve : VOP vs VOC/VOB
– Control : Variable and Attribute
• Process Capability Cp
• Cpk - Capability Index
• 7 QC tools
Program coverage
10. Lean
A tool to identify & eliminate Waste
• LEAN is basically a systematic approach to identifying and eliminating
waste through the process of continuous improvement (Kaizen)
• Lean principles can be applied in various fields of mfg & service
industry (Manufacturing , Procurement , HR , Sales , Hospitality . IT
, Customer support , Logistics etc)
• It aims at identifying & eliminating process wastes in all operations
with focus on higher asset utilization & at improving service levels
• Helps you improve the essential 3‘C’s , Cash , Cost , Customer
service through the application of 4th ‘C’ ( Continuous Improvement )
• Helps you eliminate / reduce the :
– Delays
– Defects
– Capital
11. Takt time
Based on the customer (Marketing ) demand the Takt time is
calculated .
Takt time = Nett Available time
Customer demand
Efforts are made to overcome constraints , if any, to ensure
customer’s asking rate is met as per requirements.
It is a useful concept for balancing demand and supply and is
used in conjunction with VSM
Customer’s buying rate establishes TT
( + any extras such as test parts
and anticipated scrap)
12. Raw
material
Stores
Focal Organization
Prod Plnng &
Control
FG
Warehouse
Weekly
POWeekly
PO
Weekly
Internal WO
Weekly
Internal WO
Weekly
Internal WO
Weekly
Internal WO
Every
Saturday
Every
Monday
13000
units
19000
units
3000
units
5000
units
14000
units
Current status Value Stream Map
Lead Time (Inventory
in equivalent
Days) =
Inventory/Customer
asking rate
Customer demand = 50000
nos/ month (25days)
1 shift /day
ie , 2000nos./day
= 6.5d
= 9.5d
= 1.5d
= 2.5d
= 7d
Total lead
time = 27d
Total VA
= 40 Sec
Lead time ..?
Calculate total VA = Sum of all
the cycle Times
14. Advantages of balanced VSM & Takt time
• Helps re-organize the flow with minimum wastage
• Limits over production
• Helps to workout quantities between each workstation
• Buffer at each operation will be minimum
• Error proofing
• Helps regulate customer dispatches
• Helps you decide the rhythm of the line (2000/day)
• Takt Time is therefore , also called Pace Setter & is fundamental to
understanding of VSM
Improvements with VSM Current state Future state
VA - Sec 40 36
Lead Time - Days 27 8
Over Production - Nos 19000 (Step 1&2) 4000
Customer Dispatches - Nos 14000
(Once a week)
2000
(Daily)
Can be
further
reduced if
batch qty is
proportion
ately
reduced -
leading to
Single pc
flow
15. Cellular Manufacturing (CM)
• Manufacturing or assembly set up wherein equipment and
workstations are arranged in a single area that allows a
product or group of similar products to be processed
completely from start to finish.
• It allows continuous and smooth movement of inventories
and materials to produce
– products from start to finish in a single process flow,
while incurring
– minimal transport or waiting time, or any delay for that
matter.
• CM is an important ingredient of lean manufacturing
• It is a self-contained mini-production line that caters to a
group of products that undergo the same production
process.
16. 5’S’ – A Quality Improvement tool
• Needs to be driven by none other than the CEO/Unit
head
• 5S is 1st step towards becoming world class
• Process includes identifying and eliminating operational
wastes which dent our profits and reflect our
performance negatively in front of our customers
• A neat & orderly workplace helps in identifying wastes
• It is the first step towards implementing any new
Improvement Initiative. Lean , TPM , SMED , Kaizen , Kanban …
19. Material at Eye level
Five principles of storage
for “One Touch Pick Up” and
space optimization
20. CLIT - When to do it?
(Clean , Lubricate , Inspect , Tighten)
• C L I T is NOT one-time cleaning.
• C L I T has to be done repeatedly, according to a schedule.
• It should never be done ONLY when there is free time. (You
are welcome to do it during free time ALSO).
• Production Planning must keep time aside for Initial
Cleaning.
• Ideally, keep 1 to 2 hours a week ( Min 5min each at start and
before end of each shift).
21. Employee Involvement - Approach
• Train employees to collect meaningful data (free from
error of measurement)
• Develop permanent solutions using appropriate problem
solving tools
• Keep records of the process performance , update them
continuously and use them on continuous basis.
• Train employees in the methods of SPC and other quality
improvement tools for improving quality
22. 1 SORT
Organize
Clearly distinguish needed
items from
un-needed
items &
eliminate
the latter
This is the
condition
We need to
support after we
Maintain
the first 3 pillars
4 Standardize
consistent
approach
2 SET IN ORDER
Orderliness
Keep needed
items in the
correct place to
allow easy &
Immediate
retrieval
3 SHINE
Cleanliness
Keep the
work place
swept & clean
5 SUSTAIN - Discipline
Make a habit of
maintaining
Established procedures
with Continuous
Improvement
5 ‘S’
Of
Work place
organization
The 6th ‘S’
Safety
23. Potential Benefits of implementing 5 ‘S’
Summary
1. Reduce Wastage
2. Reduce Defects
3. Reduce Energy
4. Reduce Floor space
5. Help Implement FIFO
6. Helps to show case our products to visitors & maintain
competitive edge
24. TPM - Total Productive Maintenance
1. Combines the traditional practice of Preventive
maintenance with
2. Total Quality Control and Total Employee Involvement to
3. Create a culture where operators develop ownership of
their equipment to assure equipment operates properly
everyday
4. TPM is led by mfg & not maintenance
5. Before starting a TPM prog , ensure that the maintenance
store’s service level is + 95%
6. Secure the commitment of senior mgt from the start
25. OEE = Availability * Performance * Quality Yield
Time available for production - downtime
Time available for production
Performance :: Speed Loss
Performance = Actual output rate
Std Output rate
Quality Yield :: Quality Loss
Total no. of parts produced – Defects
Total No.of parts produced
Availability :: Downtime loss
27. • Get Tool “B” from Tool stores
• Get RM "B" from RM stores
• Get necessary hand tools
•Awaiting Sample
approval from QC
•Re-Adjustments
.Transfer Tool B on the press
. Clamp Tool B
. Adjust Tool
. Place bins for good matl & scrap
. Set Air Ejection
28. 11
14
4
4
10
12
19
6
9
5
16
10
0 5 10 15 20
•Re-Adjustments.
•Awaiting Sample approval from QC
•Set Air Ejection
•Place bins for good matl & scrap
•Heat tool 120 to 150c B
•Heat tool to 120c A
•Get RM "B" from RM stores
•Adjust Tool
•Clamp Tool B
•Get necessary hand tools
•Transfer Tool B on the press
•Get Tool “B” from Tool stores
Revised
Internal T
5
4
3
10
2
1
25
N/C
30. How does reduction in C/o time
benefit the organization
( 2hrs to 25 min )
1. Improves OEE ……………
Availability factor
2. Can now cater to More Clients
3. Helps to run Small batch sizes leading to reduced working
capital
• Reduces Inventory (RM , Components , WIP & FG)
4. Adds to flexibility in the operations
5. Reduces the through put time / Lead time
6. Improves productivity
7. Reduces Mura
31. SMED
3 Golden rules
• Do not mind deploying additional manpower to do
a change over
• Record change over every time and create a
visual display
• Run change over competitions frequently
32. Gemba
Place where you create value for your customers
• Place where it actually happens ( Place of action)
• Gemba refers to the place where value is created; in
manufacturing the gemba is the factory floor.
• It can be any "site" such as a construction site, sales floor or
where the service provider interacts directly with the customer.
• Gemba is the place where the problems are visible, and the best
improvement ideas will come from going to the gemba.
• Solutions designed away may not get acceptability
• Rather than hear or read , visit Gemba , experience the situation
FIRST hand -
• ( doctor : D Patient : Ch)
Also means “reality” or even truth
33. Types of Inspection
• Sampling plan
• 100% Inspection
• Based on theory of probability
• Depending on the degree of criticality
a suitable plan is selected for each
item
• The plan is pro Manufacturer as
Customer may get still get a defect
• Builds customer’s ( External or Internal )
confidence in your product
• Product is made to withstand any
use with the help of Pokayoke &
work standardization
34. Type of Errors
1. Forgetfulness
2. Processing error : Process operation missed or not performed
as per SOP
3. Setup error : Using the wrong tooling or setting , machine
adjustment
4. Missing part : Not all parts included in the assembly, welding,
or other processes as per BOM
5. Improper part / item : Wrong part / hardware used in the
process
6. Operations error : Carrying out an operation incorrectly;
having the incorrect version of the specification
7. Measurement error : Errors in measurement or dimensions at
incoming stage
8. Error made by Amateurs
9. Intentional Error : Sabotage / Crime
How do we arrest
these Errors
35. PokaYoke
• Japanese words "poka" (mistake) and "yoke"
(prevent) was invented by Shigeo Shingo in the
1960s.
• He struggled with statistical tools to find solutions to
the day to day quality issue
• The essential idea of poka-yoke is to design your
process so that ..
- mistakes are impossible or
- at least easily detected and corrected.
• Primarily designed for error proofing of Quality issue
, later extended to Safety for Accident prevention
36. Andon
1. It is a quality tool which applies following
principles:
-Detects Abnormality
-Stops
-Flags for human attention
Andon Yellow for 15 Min , converts to RED if un-
attended
Limit Switch - alarm
2. Transfers Human intelligence to Automated
machinery
3. Prevents production of defective products
37. Problem Solving
requires
• Careful action plan leading to measurable & sustainable Goals
• Thorough analysis of process
• Careful consideration of various options
• The inverse of a problem is an opportunity
So, treat Problem as an Opportunity
"Opportunities are Like Sunrises, If You Wait Too Long You Can
Miss Them".
38. Principles of Continuous Improvement
1. The customer's needs are critical and ever demanding
2. Anything can be improved - All processes, products, and
services can be made better through Continuous
Improvement approach (CIP).
3. Quality is everyone's job - To leave any Partner out of
the process is to miss an opportunity to improve.
4. The person doing the job knows it best – Involve the
direct Workmen
5. People deserve respect - People do their best when they
feel good about themselves and their contributions
6. Teamwork works - People working together accomplish
more than they would working alone.
39. Working Capital Cycle
Cash
Inventory
FG
Purchase of
Raw Matl
Receivables/
Collection
1 months
1 Months
2 Months
Production
0.5 MonthSell
1 W/C Cycle ??
No of Cycles/ Yr = 2.4
Target ……
= 5 Months
FLOW : movement between value adding processes
without delay or interruption
0.5 Month
40. Balance Sheet model of a Firm
Current Assets
-Receivables
-Inventories
Current Liabilities or
Short Term Debt-Payables
Fixed Assets
1.Tangible Fixed Assets
(M/c ,Equipments ,Land)
2.Intangible Assets
( Patents, Trade mark,
Quality of Management)
Long Term Debt
Shareholder’s
equity
Assets Liabilities
41. Working Capital Ratio (Current Ratio)
= Current Assets / Current Liabilities
< 1 indicates
> 2 means that the
W/C ratio between 1.2 and 2.0 is ideal
Quick Ratio = (Total Current assets-Inventory)/ Total Current Liabilities
negative W/C (working capital)
company is not investing excess assets.
Current ratio helps you to understand the health of an organization at a glance
42. Types of Inventories
• Cycle Stock
• In-Process Stock
• Safety Stock
• Seasonal Stock - SOS
• Promotional Stock
• Speculative Stock
• Dead Stock
43. How much to Order
Order Quantity (Nos)
CostinRs
Annual Ordering Cost
Inventory Carrying Cost
Total Cost
Lowest total cost
EOQ
Point at which
both
Ann Ordering Cost
& ICC equal
1200200 800400 600 1000
300
600
1500
1800
MRP output
Push Inventory plan
44. A – Annual requirement
P – Unit rate
Q – EOQ
B – Cost of processing an Order
I – ICC %
Ann Ordering Cost =
Inv Holding Cost =
For EOQ ::
A
Q
* B =
Q
2
* P *
I
100
Q =
2∗ A∗ B∗100
P ∗ I
EOQ
𝐴
𝑄
* B
Q
2
* P *
45. Order Point (ROL)
Replenishment
Lead time
Time
Qty
1
2
Expected demand thru’ replenishment Lead time
+ 2. Safety stock
EOQ
Re-order
level Fresh
Replenishment
( Point at which the fresh Order
must be released )
When should this
replenishment be
ordered ?
= 1.
Matl
Consumption
46. Kanban Triggering Cycle
Upper
bin
full
Lower
bin
full
Both bins
full
Empty
Under
use
Full
Full
Empty
Empty
Full
Kanban
card
triggered
Full
for use
Empty
awaiting
Repleni-
shmentUnder
use
Cycle Stock
=Avg Daily * LT
Buffer
ROL
Kanban
Pull Inventory plan
47. Inventory Stock Plan
with Kanban
• ROL = ADR * LT + SS
SS = ADR * (Max LT – Avg LT)
or
SS = ( 6 * SD + ADR ) *
(Max LT - Avg LT)
• Points to be considered while deciding SS
Service level
Forecast errors
Delivery failures
Supplier’s location
48. Benefits of Kanban
1. Controls Inventory & its accuracy
2. Improves ‘5S’ with labeled bins & shelves
3. Reduces shortages due to 2 Separate bins. Empty bin gives
signal for refill as against MRP system.
4. Reduces material handling . Dedicated location ensures easier
material handling
5. Increases flexibility : Any model of product any time as all items
are stocked under the Kanban system
6. Provides robustness to material planning to take care of any
sudden peaks & dips
7. Self Regulative :: Adjusts with change in demand
8. Easy to Maintain :: Addition / Deletion of items
9. Compatible with any Material planning system MRP , ERP ,
Excel etc
49. The Just-in-Time Consumer
1. When economy sank in 2008 , Rebecca Seabern realized
she had
Lasanga – 2Yrs stock
Paper towels – 1yr stock
2. “ I have stopped purchasing things, just to have them on
hand “ , preferring to make bigger mortgage payments
instead
3. The recession has changed shoppers to The just-in-Time
consumer
4. For decades Americans bought big , bought more &
stocked up , confident that bulk shopping provided the
best value & discounts.
50. Bad inventory decisions can kill an organization's
profitability
1. The more inventory,
– not feel pain,
– the worse you can operate , and so on –
– the vicious cycle that increases costs and eventually kills
businesses.
2. Use (REDUCE) inventory as a strategic weapon for boosting
EVA to give your organization a competitive advantage
52. Cost of Quality Management vs Cost of servicing defects
Low Quality High
LowCostHigh
Total
cost of
Quality
Minimum
cost of
Quality
Cost of
Service
defects
Optimum
level of
Service
Quality
Where
you want
to be
Cost of
Quality
Management
96% 97% 98% 99.99%
53. Six Sigma
• Every mistake an organization or person makes ultimately has
a cost,
– the need to do a certain task over again,
– the part that has to be replaced,
– time or material wasted
• You consume additional resources to correct a problem
before it's delivered to the customer
• Six Sigma is a scientific problem solving tool for
– meeting your customer's needs (Time , speed , Quality )
– minimizing wasted resources (Errors , rework , Hidden
factory , variations +/-)
– maximizing profit in the process ,thru’ disciplined data
collection and analysis to determine best solutions
54. Six Sigma - objective
• Man-kind accepts all creations of God , Black –White ,
Short-tall , fat-slim with all distortions / discrepancies , but
....
• When it comes to creations of another man-kind the same
men don’t accept any variation be it color , aesthetics ,
size , weight etc
• Primary objective of Six Sigma is therefore to
– “do it right the first time” FPY (FTR) , and
– “do the right things right” SOP
• To ensure consistency of output in terms of both Quality
and Quantity
• Hence a need to minimize the process output variations
55. Process variation
1. Any process , be it manufacturing,
delivering services, conducting
transactions, there is always a
distribution of performance
around a target.
2. Normally this distribution takes on
the shape called the normal
distribution, and is also known as
the bell curve.
3. The shape of the normal
distribution curve is symmetrical
about the central line, with
4. just as much area under the curve
to the left as on the right.
Target
CTX Performance Variation
3σ
3σ
56. Quality and grade
• Quality is different from grade ( PF Gr 2 , 3 :: SMC 512/20,
536/30 etc) : Tensile strength : 550 , 1000 Kg/cm sq ( Two different
Means X1 , X2 )
• Quality is performance within +/- 3σ , while grade is different X
• Focus is on aiming for the target
• In Six Sigma, important characteristics are referred to as CTXs,
where the
• C stands for "critical," the T stands for "to," and the X represents
what the characteristic is linked to: quality, cost, time, and so on.
• For example, a critical-to-quality characteristic would be called a
CTQ.
57. Performance
Specifications
1. Performance specification limits help
to define, measure, analyze,
improve, and control quality.
2. Quality is defined by conformance to
standards or specifications.
3. When you operate or perform
within the specification limits, you
have quality.
4. When you fall outside the limits, you
have defects.
5. In Six Sigma , Quality is defined as
getting close to the target with the
least amount of variation
6. Every characteristic that can be
measured has a performance
distribution.
Lower
Spec limit
Upper
Spec limit
CTX Performance Specifications
Target
58. Process Variation
1. Basically, variation is deviation from expectation.
2. Variation creates uncertainty in our ability to produce a desired
outcome
3. Some variations- within limits - might be okay.
4. A little too much variation here or there, and you might have
some repairs or rework on your hands. And too much
altogether, and you're either out of a job or out of business.
5. The measurement, analysis, and control of variation is a central
theme of Six Sigma.
6. Reduction of unwanted variation is the key to achieving Six
Sigma improvements
7. If you measure the occurrence of something many times, it's
going to vary around some average or mean value.
8. A process’s output normally varies between +/- 3σ
9. The mean is the central tendency of your process
59. Common Cause variation
• Some variation is just natural; It is simply part of the normal
course of events.
– Tossing of coin , dice
– Arrival of bus / flight
– time between waves at the beach
– Tree height
– processing a credit card application
• This type of variation is called common-cause variation
• You can act to reduce common cause variation, but you
can't eliminate it. It's natural, and it's part of every system.
• It's in there and it's not going away
60. The basics of a Six Sigma project
1. When a particular problem is
selected to become a potential Six
Sigma project, it goes through a
critical transformation :
i. Practical business problem
ii. Statistical problem
iii. Statistical solution
iv. Practical solution.
2. By stating the problem in statistical
language, you ensure that you will
use data, and only data, to solve it.
3. This forces you to abandon gut
feelings, intuition, and best guesses
to address your problems
Practical Problem
Statistical Problem
Statistical Solution
Practical Solution
Results
61. Aligning VOC to VOP
1. Start by assessing the higher level needs of your
organization using knowledge obtained from
– The voice of the customer (VOC) and
– The voice of the business (VOB).
2. The VOC is all the needs and expectations your customers
have , for your products and services.
3. The VOB represents all the needs and expectations of the
business.
4. Align VOC & VOB to VOP.
62. FTY
Yield =
(352 – 103)/
352
= 70.7%
= FTY
&
The Hidden Factory
The
Hidden factory is
due to
The inability to
correctly comply
with required
specifications the
first time
The hidden factory of in-process inspection and rework
accounts for 98.6% - 70.7% = 27.9%
Hidden Factory103
98.6%
The extra efforts put to
get these 98nos.
accepted is
HIDDEN FACTORY
352 347
63. The Hidden factory
The hidden factory is work that is done above and beyond what is
required to produce a product or a service.....
Work that gets ingrained into the organization when you don’t ask
"Why are we doing this, since this is not adding any value?“
"That's the way we have always done it." If you have heard this,
you probably have a hidden operation.
Finding the hidden operation and quantifying its effect helps you
further understand potential level of improvement when writing
the objective statement.
Opr i Verification Opr i+1
Analysis
Off-line
repair
Scrap
Fix ?
Yes No
If problem
64. Standard Deviation
• The standard deviation-(σ) is by far the most commonly used
measure of dispersion
The long and short of variation
• In fact, for any selected short period of time, the process
generally varies within the same rough limits – This natural
level of variation is called the short-term (St)variation
• This short-term variation is purely random
• It is caused by the combined effect of all the little things that
are too hard to include in your understanding of the process
and is therefore also called
Common cause or random variation, short-term variation.
65. Process Entitlement
1. This hard wall in the improvement path is called
Entitlement (variation you can expect from a process
under the best conditions ) of the process or
2. Random variation or ST variation
3. Short-term, or entitlement, variation is used to compare
the capability of different processes to meet a specified
goal
66. Histogram or Probability curve
1. Pictures of data helps you understand the process
2. These pictures - called graphs or plots - are definitely better
than numbers at communicating your data to others.
3. Using visual material to communicate data is best way of
getting every one’s involvement
4. Plotting and charting data help you project
i. the central tendency and
ii. the spread of variation (uniform or skewed)
5. One of the best tool used to project both these
characteristics is called Histogram .
6. Bucket or Bin size selected should provide for 10 to 20 equal
divisions between the largest and the smallest observed
values.
A Picture’s worth a thousand words
67. Product specification and its importance
1. Before the 1800s, all products were manufactured one at a
time by craftsmen
2. A revolution was ignited when specialists were engaged to
separately create each of the components of a product.
3. Each focused on a smaller area
4. It was in this environment of economic revolution that
specifications were born.
5. Each specification represents what the customer requires in
order to be satisfied.
68. The traditional and the Six Sigma views
on specifications and the costs caused by poor qualityCostcausedbypoorquality
Characteristic scale of measure
LSL USLTarget
Under Six Sigma
Traditional
method
‘a hit or miss’
Losses keep growing as you move away from the target
Known as Taguchi loss curve
Task of Six Sigma is to understand how well the VOP meets the VOC
69. Meeting Six Sigma standards
• The basic aim of Six Sigma is to ensure processes give first
time right output leading to consistent performance with
variations between +/- 3σ
• Most of the output of a process generally meets the
specifications(CTQ-X) , except few , who deviate to varying
extent , measured by standard deviation (σ)
• So some units may have
– X +/- 1σ , some
– X +/- 2σ ,and some
– X +/-3σ specifications
71. 2 approaches to Improvement
DMAIC DFSS
• Six Sigma offers two approaches for improvement
1. Improve the process so that chances of defects are
reduced ,ie reduce the standard deviation DMAIC
2. Change the design (DFSS) so that product can
accommodate process variations
72. Higher Process Sigma – lower Rejection
• A low process sigma means that a significant part of the
tail of the distribution is extending past the specification
limit. More defects.
• So the higher the process sigma , the fewer the defects
1. 2σ = 30.8% Rej
2. 3σ = 6.68% Rej
3. 3.4σ = 3% Rej
4. 4σ = 0.62% Rej
5. 5σ = 0.0223% Rej
6. 6σ = 0.0003% Rej
} Most of Indian Industries are here
This is the journey we have
to undertake
73. Simulation model
Statistically it is proven that shifting the process's St distribution
closer to its SL by a distance of 1.5 times its ST std. dev. would
almost cover the defects occurring in the long term.
These results
can be applied
directly to the
calculation of
short-term and
long-term
sigma (Z )
scores.
1.5σST
SL
74. The Seven QC tools
1. Check Sheets
2. Pareto charts
3. Histograms
4. Cause and effect diagrams
5. Scatter diagrams
6. Control Charts
7. Graphs
Identifying
Prioritizing
Analyzing
Communicating
These tools are divided in to 4 broad categories
75. Scatter diagram
1. Histogram plots only one distribution (characteristic) at a
time . Often one needs to explore the relationship between
two characteristics .
2. Scatter plot helps to understand the relationship between
two characteristics
3. You need to capture measurements for the two
characteristics simultaneously
4. The two characteristics can be an input and the other can be
an output (X , Y) or can be two inputs (X1, X2 ..)
5. The relationship could be :
– Positive Correlation
– Negative correlation
– Positive or negative correlation possibility
– No Correlation
76. Pareto Chart
1. It’s a type of bar chart where bars ( representing various
causes) are arranged in descending order of height starting
at left
2. Basically Pareto chart helps u identify, Vital few causes that
should be worked on first , to improve any problem eg
3. Vital few (20%) of items responsible for 80% of Inventory
4. Vital few (20% ) responsible for 80% of customer complaints etc
(If quality defects are arranged in order of frequency of
occurrence, few of these defects account for bulk of defectives)
5. It basically helps u to organize your efforts in solving the vital
few which contribute for majority of problems
6. Pareto charts help to improve efficiency , material waste ,
energy conservation , safety Issues , cost reduction etc
77. Pareto Chart
Stratification of “Quality” category
710
290
210
150
40
0
200
400
600
800
1000
1200
1400
Stale Burned Undercooked Slicing Other
Stratification of the Quality category shows “Stale”
and “ Burned” as the major causes of poor quality
The team decided to use Cause and effect tool for further analysis of the problem
78. Control
• A solution that isn’t sustained over the long term has little
value
• Control charts are two-dimensional graph plotting the
– performance of a process on Y axis, and
– time or the sequence of data samples on X axis.
• They are basically a type of Run chart with control limits
Why Control chart
– It shows nature of variation in the process over time
– Helps in detecting changes in the process
– Helps in controlling the process
• Specs : USL/LSL vs UCL/LCL
– CONTROL is also capability , 𝐂 𝐩 - Process Capability
79. Control Charts
Background
• Dr Shewhart in1920 observed that every process exhibits
some degree of variation
• Since no two things can be produced exactly alike ,
variation is natural and should be expected
• He defined that if a measurement falls within plus or
minus three standard deviations of its average, it is
considered “expected” behavior for the process.
• This is known as common cause variation
• He observed two types of variations in any process
80. Variable Control Charts
• Variable Control charts are used to monitor measurable
quality characteristics of a process eg Temperature ,
dimension , weight , viscosity etc
• Variable charts can monitor only one quality characteristic at
a time .
• For more than one characteristic, a chart for each
characteristic needs to be created
• Variable Control charts help to monitor both process mean
and process variability
• Hence it becomes necessary to use minimum 2 control charts
to study the process. Ie
– Range or Std Deviation
– Process mean , with UCL & LCL
81. Variable ( Continuous) data Control chart Summary
Control Chart Sub-group
size (n)
Control limits
Average and Standard
deviation X , R
2-10 UCL = X + A2 R
LCL = X - A2 R
Range R 2-10 UCL = D4 * R
LCL = D3 * R
Average and Standard
deviation X , S
>10 UCL = B4 S
LCL = B3 S
Individuals and moving
range MR
- Range
- X
1 UCL = D4 ∗ MR
LCL = D3 ∗ MR
UCL = X + 3
MR
d2
LCL = X − 3
MR
d2
82. Control Charts for Attributes
• Whenever it is difficult to take numerical measurement the
quality is judged either conforming / non-conforming -
Defectives based on attributes( Np and p charts) :
– Leaks / does not leak , No. of counts scratches , holes ,
dents etc .
• Attribute data can have two values , such as pass/fail
present/absent etc ie data which can be counted.
• It can also be no. of non-conformities (defects) that appear
on a unit ( No of dents , a/c opening form , scratches , holes
etc) : C & U charts :
• The inspection doesn’t require spl trained people as no
measurements are involved .
83. P Chart
( Control chart for fraction non-conforming)
• ‘P’ stands for proportion
• Measures the proportion of non-conforming units in a group of
units being inspected.
• P chart is the most versatile and widely used attribute chart
• It can be used for following purposes.
– To determine the avg. proportion (or fraction) of non-
conforming units over a given time
– To signal a change in the avg. fraction non-conforming
– To identify out-of-control points that call for immediate action
– To suggest places to implement X and R charts
• Np chart is used when analyzing only one type of defect
84. 1. Not every performance indicator can be a KPI !
2. Just because some particular indicator is easy to measure it
should not become a KPI .Doing so dilutes your focus on what's
truly important , wastes time
3. KPIs should reflect what your CEO expects from you
4. KPIs should contribute towards meeting his goals
5. "K" in KPI stands for "key," meaning "important" – not just to
you, but to your CEO. So, report true KPI's, not mere PI's!
KPIs
He wants to know :
85. He wants to know:
1. How do these KPI's directly reflect contribution to the
profitability of this organization?
2. How do these KPI's directly reflect contribution to the
satisfaction of our customers?
3. How do these KPI's directly reflect contribution to the
advantage we would have over our competitors?
4. How do these KPI's directly reflect contribution to the
operational efficiency of this organization?
KPIs (contd)
86. Our other Training Programs
In-company as well as Open prog.
• Enhance Productivity & Inventory turns thru Principles and
Applications of Lean Manufacturing – 2days
• Vendor Management & Development - 1day
• Un-lock Working capital thru Effective Inventory Management -
1day
• World class Mfg - 3 days
• SCM – 1day
• 5S & Visual Control Management - 1day
• Material & Inventory Management - 1day
• Materials – A profit centre - 2days
87. The Times of India
March 3.2009
oath by LEAD INDIA ‘09
I swear that this time I will stand up.
This time I will vote.
Against my own helplessness.
Against my own laziness.
Against the belief that nothing will change.
Against short cuts.
Against two words called ‘Chalta Hai’
