Monday, October 7, 2013

Focus and Leverage Part 255

In this posting we will continue our discussion on integrating Lean and Six Sigma with the Theory of Constraints by focusing on the basic implementation steps I typically use.  It’s important to remember that one of the key prerequisites for any improvement initiative is to create a satisfactory level of organizational stability.

Typically, the first step in this integrated methodology is to develop a SIPOC Diagram followed right away with either a Value Stream Map (VSM) or a Process Map (P-Map).  It has been said that in order to create a better future state, you must first understand what’s happening within the current state and I do support this statement.  The primary reasons I start with mapping the process are to assist in the identification of the system’s constraint and to better understand the system’s flow issues.  The VSM allows us to see, first-hand, individual process cycle times and inventory stack-up, which is normally directly in front of our constraint while the Process Map allows us to run different simulations that confirms the constraint and validates our improvements to enhance flow.  Many times I create a hybrid P-Map and add cycle times and inventory to it.  In this step I also evaluate all policies and procedures that are in place that could and do form barriers to enhanced flow.

Once the maps have been created, I normally perform a value analysis on each step of the mapped process.  I first identify value-added steps as those that (1) moves an item through the process and changes it, (2) is something the customer sees as valuable and is willing to pay for it, and (3) is done right the first time.  If the step in question satisfies all three of these requirements, it’s considered value-added and I color code it as green.  If the step does not satisfy these three conditions, it is considered non-value-added and is colored either red or yellow.  It’s yellow if it is considered, non-value-added but necessary meaning that it is mandated by some regulation and cannot be eliminated.  It’s colored red if it is not mandatory and is clearly wasteful.  My experience tells me that a team seeking to correctly evaluate each step in the mapped process for its value-added component, sometimes has difficulty with the value analysis because they typically can’t see what they are doing as not adding value.

Once the value analysis is complete, generally my next step is to create a Future State Map (FS-Map) which is the same process, but now being free of the waste that can be eliminated.  It is not always easy for a team to develop a FS-Map because the members many times don’t like to leave their comfort zones and as a result resist changing it.

When the Future State Map is complete, I then usually have the team work on quantifying/estimating the new cycle times and overall lead time of this future state process.  In addition, it is important to identify the location of the constraint in this new process.

Since performance metrics are intended to motivate behaviors, I also review the performance metrics that are in place to make sure that they will, in fact, motivate the right behaviors.  Performance metrics like operator efficiency and equipment utilization only serve to produce excess inventory which negatively impact cycle and lead times.  If metrics like this exist, then I know that unless they are eliminated or changed, the improvement effort will be negatively impacted.  Having said this, both efficiency and utilization are quite effective if they are measured only in the constraint.  The metrics I choose for non-constraints are tied directly to how well the constraint is being supplied.  The performance metrics also tell us to how impactful our improvement efforts have been.  I frequently use run charts to plot these metrics so that trends and cause and effect relationships can be observed in relative real time status.

In my next posting we’ll continue our discussion on the subtleties of this important integration,

Bob Sproull





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