Applying Lean Manufacturing To Six Sigma - A Case Study

This work was carried out in a large company based in the US and India in the business of converting printed paper from customers into electronic copies. It is a continuation of the earlier case study entitled "Six Sigma Case Study: Converting Paper to Electronic Documents." The paper material is quite heterogeneous in nature -- consisting of assorted magazines and legal papers.

The results obtained have obvious applicability to the back rooms of industries processing large amounts of data -- IT enabled services, banks, insurance companies, hospitals, and computer based office processes. They are also applicable to most organizational processes.

As emphasized in the earlier work, in the author's opinion and experience, success is a function of techniques and more importantly a mindset change in the organisation. The narrative unfolds in the same sequence as the project did pointing out the critical stages where results were achieved and where mindset changes occurred.

1. Define And Measure The Problem
1.1) Selection of the problem: A meeting of the senior management of the company was held and a brainstorming session produced a list of over 30 problems. These were affinitized into two categories:

• "End result" problems faced by the external customers
• Internal problems that were causes of customer problems rather than basic problems themselves

The realization that the first category of problems was the one to be attacked (customer focus) came spontaneously.

Then prioritization was done to select the most important problem using the weighted voting system followed by a quick discussion to produce a consensus. The theme (CTQs) selected was "Consistency of Quality and Timeliness."

The Consistency of Product Quality was resolved first and a 98% error reduction was achieved.

The project described here was born out of a chance remark by one of the participants in the group: "We are going to add new capacity." To my casual query, "Why?", came the answer: "We need to improve the turnaround." Immediately I intervened stating that turnaround is not dependent on capacity. The disbelief that stared back at me was but a reflection of the mindset prevailing and the task at hand to change it.

A cross-functional team including the planning personnel, and the key representatives of the operations from each stage of the process was formed to test the principles of Lean Manufacturing in practice.

1.2) Definition of the problem: A second level of brainstorming generated a list of problems which were affinitized into customer problems and internal problems. The customer problems were expressed:

1. Delayed delivery -- frequent customer complaints
2. Peaking of incoming loads aggravates delays.

The Project Charter was then set out as follows:
Problem = Customer desire - Current state

1.3) Measure the problem: A suitable data collection check sheet was designed and data was collected two weeks on the turnaround time of documents to define the problem quantitatively. The following results were obtained:

Customer Requirement Of Turnaround Time: <5 days
Current State Average Turnaround: 5 days
sigma: 1 day
3-sigma (99.7%) Delivery To Standard: <8 days

The interpretation of consistency of delivery (turnaround) using sigma created disbelief at first as the group struggled to understand the concept. Gradually however it was grasped -- the problem was not the average turnaround, which was within the customer limit but the variability. This was the second major mindset change and led to the definition of the goal: Reduce Turnaround time by 50% so that its (average + 3 sigma) < 4 days.

2. Analysis of the Problem
A flowchart was prepared outlining each activity in the process. Many gaps were revealed that had to be filled up and thought through. Standard times of each process per batch of 50 pages were tabulated in a specially designed check sheet. The team was amazed when the time for the value adding steps added up to only 31 hours. The most important mindset change had begun, asking, "Why do we take 5-8 days?"

The principles of Lean Manufacturing and turnaround time reduction were then introduced:

• Zero waiting time
• Zero Inventory
• Scheduling -- internal customer pull instead of push system
• Batch to Flow -- cut batch sizes
• Line Balancing
• Cut actual process times

Finding the vital causes: Data was collected for three batches clocking the timing at each stage and comparing it to the standard timings to find where time was being lost on a specially designed data sheet.

With the data it took the group only a few minutes to draw a Pareto Diagram of delays and conclude three vital reasons causing 70% of the delay was non-processing (waiting) time due to:

• Lack of awareness -- large waiting times for small items falling between departments
• Inventory
• Unscheduled work patterns and therefore unavailability of personnel at the right time

3. Idea Generation
The old mindsets were shattered but the group was struggling to understand the concepts confidently enough to start applying them in regular production. An experiential simulation classroom exercise in which the group members participated was designed and carried out to experience the concepts first hand. Armed with this conviction, the team proceeded to the next step to design a pilot test.

Planning the Pilot: A step-by-step implementation plan was drawn up. It was estimated that cutting inventory and scheduling the production cycle to flow in the current batch sizes would lead to the achievement of the goal. The whole chain was briefed about the new method and agreed on a schedule. The team was ready to run the pilot.

4. Idea Modification
A pilot batch was run to test the scheme: It took 36 hours. Amazed jubilation followed by an enthusiastic buy-in of the concepts -- demonstrating my belief that nothing works better than results in accomplishing mindset change. From then on it was difficult to restrain the group from pushing ahead too fast.

5. Implementing The Change
5.1) Scheduling: Production was carried out in a number of parallel lines in a 1-2-1-7-1 configuration. Careful scheduling and planning of the set up was done to convert each stage to the new mode of running. Training was carried out, and the conversion begun with data acquisition for further problem solving.

5.2) Implement the change: After eight weeks of a step-by-step introduction the new schedule was running and estabilised at all stages. Everyone was pleasantly surprised at the ease of implementation and learned that involvement of all functions and effective countermeasure design using data makes implementation of dramatic improvement easy and quick.

6. Checking The Result
The turnaround achieved was as follows:
Average Turnaround Time: 3 days
sigma: 0.4 days
Average + 3 sigma: 4.2 days (i.e. < 5 days)

The goal had been achieved!

The Production line personnel reported tremendous benefits: