Lean and Six Sigma - 2 - Value, Value Streams, Flow, Pull and Perfection

The central idea is to analyze process and improve it. That's why we need Process Analysts. What is process? Imagine it is a black box which we throw in inputs and it produces outputs. It is a series of actions or activities to transform one to another.

For example, customer order product A. The materials, resources will go through certain processes and then produce product A to customer. Not all processes are valuable to customers, such as project coordinator which has lesser value to customer. We firstly study what processes or activities have values to customers. Those that has no values to customers are considered wastes, such as revamping the website, rework of some jobs. What customers want eventually has values to customers as customers are only focusing on the end products. Working backward, customers' requirements pull the materials or resources from upstreams to downstreams. Customer's pulling cascades all the way back to the lowest level supplier, enabling just-in-time production. Value streams are how the materials, or information, or people flow. We want to know if there is over-processing of information, over-production of materials or keep too much inventory, etc. When we talk about flow, it actually involves time as main parameter. We can measure time as waiting time, process time, idle time, lead time etc. In manufacturing environment, we focus on how the materials are being processed, for example through machinery. However, software environment is different story because programmer produces codes. Programmers are human, which is hard to measure their work rate predictably liked machines. But, we can make sure the software development environment is set up in such a way that it helps programmers to do work more efficiently. I am interested to explore and map them in term of software environment as well as the relationship with CMMI.

Summary:

• Value - value-added activities, non-value added activities: necessary waste, pure waste
• Value Streams - all activities that create value
• 7 types of wastes: over-production, transportation, inventory, unnecessary movement, waiting, defective outputs, over-processing
• Process Map -> Value Stream Map
• Flow - product or service flowing through process, main metric: time
• Takt Time = (available time) / (customer demand rate for available time)
• Pull
• Kanban method
• Visual Control - Andon -> Isn't this liked SCRUM master remove the blocker promptly?
• Perfection - This is a journey, keep moving.

Reference: MIT Course: Introduction to Lean Six-Sigma Methods.

Lean and Six Sigma - 1 - Introduction

Since returning to Singapore for jobs hunting, I have been asked a few times during the interviews about Lean and Six Sigma. I admitted that I do not have direct working experience with Lean and Six Sigma. But I can learn! Well, it is hard to convince the potential employers. Out of frustration, I decided to write about them.

Lean was emerged from post World-War II Japanese automobile industry to eliminate waste. Six-sigma was developed by Motorola to eliminate variation and improve quality systematically by reducing defects. The focus was shifted from reducing cost and improvement efficiency to eliminate waste and add values to customers continuously.

Now, I think I can apply '5S' even in my small flat to de-clutter the house. For example, let's imaging a work of managing housing documents, such as CPF statements, utilities bills, etc, which all of us are facing as it's part and partial of our lives. How do you organize those documents?

1. Sort - Categorize the documentations, such as group banking statements in one box, CFP statements in another.
2. Set in order / Straighten - Sort the documents in order, e.g. chronologically.
3. Shine / Scrub - Regularly clean the areas where you keep documents to avoid dirtiness. Eliminate spring cleaning. This is everyday work.
4. Standardize - Apply the defined methods in all areas in consistent ways, such as applying stickers to label each group of documents.
5. Sustain - To maintain it religiously, of course.

Lockheed Martin applies Lean Thinking. From 1997 to 2001, LM reduced the building time for space launch vehicle from 48 months to 18 months. Other company applying Lean include Rockwell Collins. They have close to 48% of reduction in inventory, and 25% of improvement in productivity after implementing Lean.

Let's look at Kanban. Kanban means card-signal. In simple form, it advocates supplying parts based on needs 'pull' from demands. When the parts and materials from downstream activities are finished, it signals upstreams to start replenishing the stocks. It sounds simple but yet it takes Toyota 30 years to apply it company wide. Therefore, there is huge gaps between knowing it theoretically and applying it practically. I think, I'm just a newbie still wondering around the main door of Lean Six-Sigma.

To be continued.

Reference: MIT Course: Introduction to Lean Six-Sigma Methods.