Simulation Powers

Lean & Six Sigma

2006 ProModel User Conference
Bruce Gladwin
VP Consulting Services, ProModel Corp.

Claus Weidinger
Principle, REOSS

1
 Seminar Agenda
• Exploring the Lean/Six Sigma Connection
• Simulation Powers Lean Manufacturing
– Example 1: Automotive Supply Chain Process
– Example 2: Automotive Production Line
• Simulation Powers Six Sigma Analysis
– Example 1: Power Generation Industry
– Example 2: Six Sigma Metrics in Lean Models
• Questions and Open Discussion
2
 What is Lean Manufacturing?
A production method that uses minimum resources of
machines, manpower and materials to produce finished
goods.
Also known as the Toyota Production System because it
was invented & perfected at Toyota by Taiichi Ohno.
To Weld/HT
Kanban

Weld/HT
Kanban

Finished Goods Kanban

3
 What are the Benefits?

Metric/Benefit Additional benefits:

Inventory Inventory Value > 50%

• Reduced floor
space requirements
Inventory Turns x 2+
• Increased line
capacity
Customer Cycle Time, On-time Delivery
Satisfaction • Increased worker
productivity
• Improved Quality
Safety OSHA recordable incidents

4
 Value Stream Map
Engineering Engineering
creates provides final
Engineering Final drwngs Drwng to Mfg
RAC
creates RM 6 to 8 weeks
Meeting
drawings
2 to 4 weeks
Buyer places
PO with Suplr
Massa to FLR (Leg 3)
Day DepartArrive
Weds 9:00 12:00
Friday 9:00 12:00

Florence
3 Massa
Plant Plant
6 to 8 weeks 2 5 to 8 weeks
FLR to Massa (Leg 2)
Day DepartArrive
Tuesday 15:00 18:00
1 Thursday 15:00 18:00

Empty Container
Raw Mat
Full Container Supplier

8 to 10 weeks

11 to 37 weeks 5
 How is Lean Implemented?
Understand the Current
State Process through
Value Stream Mapping
Identify and Eliminate Waste
& Variability in the Process
7 Types of Waste:
• Correction (Rework)
• Over Production (Make to Stock)
Accomplish Waste
• Transportation Reduction in a Series of
• Excess Inventory (Just in Case) Action Workouts
• Unnecessary Motion • Processes Mapped
• Unnecessary Processing • TAKT and Cycle Determined
• Waiting (Queue for machines/labor0 • Waste Identified
• Work Cells Designed
• Visual Controls Developed
• Standard WIP Developed
• Standard Work Developed
• Equipment Moved

Action
Action Workouts
Workouts Produce
Produce aa Step
Step Change
Change in
in Performance
Performance

6
 What is Six Sigma?
• A formal quality program focused on product and process
improvement, with a goal to consistently achieve a set of
customer-driven metrics.
• Originally defined by Motorola in early 80’s as a standard
stating that a 12 standard deviations of a process metric
must fall within the upper and lower specification limits
(traditional process capability allowed six standard
deviations of the process to fall within the upper and
lower specification limits).
• Implemented by GE in early 90’s as a systematic
procedure for achieving the Six Sigma standard which
has been extended to overall process improvement.
– Qualified individuals for using these tools are called Green Belts,
Black Belts and Master Black Belts.

7
 Who Is the Customer?
Input Output
Supplier Customer
Process
• Customer - Whoever receives the output of your
process (internal and external customers).
• Output - The material or data that results from the
operation of a process.
• Process - The activities you must perform to satisfy
your customer’s requirements.
• Input - The material or data that a process does
something to or with.
What is critical to the quality of the process?
…according to your customer! CTQ
8
 Six Sigma Quality
LSL USL
(Lower Specification Limit) (Upper Specification Limit)

In-control Process

-6σ -5σ -4σ -3σ -2σ -1σ 0 +1σ +2σ +3σ +4σ +5σ +6σ
99.73%
(2,700 dpmo)

99.999983%
(3.4 dpmo)
9
 Goal of Six Sigma
• In statistical terms, Six Sigma quality means that for any
given product or process quality measurement, there will
be no more than 3.4 defects produced per 1,000,000
opportunities. An "opportunity" is defined as any chance
for nonconformance, or not meeting the required
specifications. By comparison, typical quality levels for
manufactured products today achieve about 4 Sigma,
which translates to about 6,000 defects per 1,000,000
opportunities.

10
Six Sigma in Perspective
Traditional Quality Six Sigma Quality
“99% Good” (3.8σ) “99.99966% Good”
(6σ)

• 20,000 lost articles of Seven lost articles of mail

mail per hour per hour

Unsafe drinking water One minute of unsafe

almost 15 minutes drinking water every
each day seven months

5,000 incorrect 1.7 incorrect surgical

surgical operations operations per week
per week

2 short or long One short or long landing

landings at most at most major airports
major airports daily every five years

11
 Lean Sigma
• Many companies use both Lean and Six
Sigma.
• Lean is implemented first to get the right
process, i.e. Focus on Eliminating Waste.
• Six Sigma is used to optimize the process
and make it more robust. Focus here is on
Process Repeatability.

12
 Complementarity of the
Lean Manufacturing and 6 Sigma projects
Generally, when faced with problems, we are led to
compensate (additional controls,
stocks...) => which generates wastes

Variability

Stocks
Product
lead Failures
time Non quality & Break
Downs

13
 Complementarity of the
Lean Manufacturing and 6 Sigma projects
The solution : tackle the problems by
using 6 Sigma and Lean Manufacturing
Methodology
The principles of 6 Sigma
Lean Manufacturing

Variability

Stocks
Product
lead Failures
time Non quality & Break
downs

14
 Complementarity of the
Lean Manufacturing and 6 Sigma projects

We get rid of problems (non quality, breakdowns,

variability...) by using the 6 Sigma methodology

Variability

Reduction
of
wastes

Non quality Failures

15
 Complementarity of the
Lean Manufacturing and 6 Sigma projects

After reducing the risks,

we can reduce work in process, stocks and product lead time
with Lean Manufacturing

Trade Winds
Paradise Lagoon

Just
Necessary
Non quality Failures

16
 Two progress programs for a common objective

Six Sigma Lean Manufacturing

« Open to trained people » Implemented by experts
Methodology & advanced tools Share manufacturing people

• Reduce variability.
Approach • Concentrate on non-added value to
the customer
• Reduce wastes.
• A performance to reach on a
Focus • The whole product flow and its DVC
process.
costs ( including support functions)
• Measure, quantify, identify and
Methodology • All the methodologies & tools for
eliminate main causes of variability,
solving problems.
improve statistic process control.
• Re-engineer layout and organizations
(Hoshin, etc…)
• The global performance is getting
better each time a variation cause
1st Effect • Reduce costs and cycle times,
is suppressed.
WIP,stocks.

Objective Common to contribute to the industrial performance

Quality Lead time Cost
17
 Two different programs but complementary and
indispensable for excellence

• A 6 Sigma program will be more effective with simple production

flows

• A Lean Manufacturing program will be more effective with

variability under control

• The two programs need specific competencies and different

project organizations

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Simulation Powers Lean Mfg

Claus Weidinger
Principle, REOSS

19
Simulation Powers Six Sigma

Bruce Gladwin
VP Consulting Services, ProModel

20
 Central Theme of Six Sigma
• The central theme of Six Sigma is that product
and/or process quality can be improved greatly
by understanding the relationships between the
inputs to a product or process and the metrics
(outputs) that define the quality level for the
product or process.
• Critical to these relationships is the concept of
“Voice of the Customer.” In other words, quality
can only be defined by the customer, who will
ultimately receive the outputs or benefits of a
product or process.

21
 Focus on Transfer Functions
• In mathematical terms, Six Sigma seeks to define a
transfer function, y = f(x1, x2, …, xn), between the
quality metrics of a product or process (e.g. the life
expectancy of a product, or the % on-time delivery for a
fulfillment process), and the inputs that define and
control the product or process (e.g. tolerance of a
physical dimension or the number of resources available
to service customers).
• The focus of Six Sigma then is two-fold; 1) understand
which inputs (x’s) have the greatest effect on the output
metrics (y’s), and 2) control those inputs so that the
outputs remain within a specified upper and/or lower
specification limit.
22
 Transfer Functions

Y= f (X)
To get results, should we focus our behavior on the Y
or X?
„ Y „ X1 . . . Xn
„ Dependent „ Independent
„ Output „ Input-Process
„ Effect „ Cause
„ Symptom „ Problem
„ Monitor „ Control

23
 Process Inputs and Outputs
Inputs (X’s) Outputs (Y’s)
• Activity (move & opn) times • Throughput
• Number of resources • Cycle time
• Resource avail. (MTBF,MTTR) • WIP
• Buffer size (push/pull, etc.) • Service level
• Move batch size • Waiting time
• On-time supplier delivery • On-time customer delivery
• Operation yield • Customer response time
• Production lot size • Process yield
• Work schedules (OT, shifts) • Unit cost
• Setup time • Resource utilization
• Resource sharing • Cycle time efficiency
• Number of dependencies • Throughput efficiency
• Work prioritization • Variation in any of above
• Variability of any times above

24
 Quality Function Deployment
(QFD) Diagram
A QFD diagram basically
shows X variables X1, X2,…
(independent) across the
top and Y variables
(dependent) down the

y1, y2,…
side.

25
Reality Matrix – What can I change?

High 1 2

Impact

Low 3 4

Low High

Effort/Cost/Risk
26
 Six Sigma Methodologies
Six Sigma is achieved as problem areas are
targeted and projects are planned and
conducted using one of two different
methodologies.
1. DMADV* – A methodology that achieves Six
Sigma performance for new processes. It can
also be used to make radical improvements.
2. DMAIC – A methodology targeting existing
processes for making incremental
improvements.
*a.k.a. DFSS (Design for Six Sigma)
27
 DMAIC Methodology
(existing processes)
• Define the project goals and customer deliverables. Set up
scope and schedule.
• Measure the process to determine current performance.
Focus here is on the Y’s.
• Analyze to find cause-and-effect relationships. Define
transfer function relating inputs to outputs.
• Improve the process optimizing settings of decision variables
and verify achievability.
• Control future process performance through monitoring and
feedback mechanisms. Focus here is on the X’s.

28
 DMADV Methodology
(a.k.a. DFSS or Design for Six Sigma)
• Define the project goals and customer (internal and
external) deliverables
• Measure and determine customer needs and
specifications. Focus on the Y’s.
• Analyze the process options to meet the customer
needs
• Design (detailed) the process to meet the customer
needs
• Verify the design performance and ability to meet
customer needs. Focus on the X’s.

GE adds an Optimize step after Design resulting in DMADOV.

29
How Simulation Supports Six Sigma
• Simulation is a tool that can be used in multiple
stages of a Six Sigma project.
• Typically applied to the Analyze & Improve or
Analyze & Design stages.
• A simulation model becomes a realistic
transfer function that relates the critical X’s
(inputs) to the Y’s (outputs).
• Gives quantifiable output of performance and
variation.
• Allows an optimum solution to be determined
before implementation.

30
Example: Generator Mfg

31
Project Proposal
PROBLEM STATEMENT:
The ST/Gen Field & Rotor machining area is
experiencing rising WIP levels and inflated
cycle times due to capacity constraints in the
system. This problem is expected to become
worse in Q4 due to increased volumes in next
year’s production schedule. A solution to
maintain acceptable cycle times must be found.
BUSINESS CTQ’s:
On-time delivery of a Field to the Final
Assembly Area, which increases the
probability of on-time delivery to the
customer.
DEFECT DEFINITION:
Whenever the cycle time predicted by the
model, from receipt of a forging through
completion of the 3rd Lathe operation, is
longer than the established planning cycle.
OPPORTUNITY:
One opportunity for a cycle time defect
exists for each Field in the production
schedule.
PROJECT BENEFITS:
Reduced cycle times will result in lower
inventory levels, better schedule control,
and the avoidance of unnecessary capital
expense.
32
Field Machining Process

33
Metric: Variance to the established planning cycle
target for each Field type.
Target: Planning Cycles (Calendar Days)
- Field Type 1 = 86 days
- Field Type 2 = 73 days Performance
Standards
- Field Type 3 = 106 days
- Field Type 4 = 124 days
Upper Specification Limit: 0 days late

Source:
Source: Generator
Generator Master
Master Schedule
Schedule

34
 Customer
Customer
Fulfillment
Fulfillment
(Span)
(Span)
Big Y
CTQ
Flowdown

Availability
Availability of
of Cycle
Cycle time
time of
of Outside
Outside Lower level y’s
Raw
Raw Materials
Materials Field
Field Mfg
Mfg Vendor
Vendor
&
& Components
Components Process
Process Capacity
Capacity or key Xs

Machine
Machine Cycle
Cycle Changeover
Changeover Machine
Machine Crane
Crane
Times
Times Times
Times Downtime
Downtime Availability
Availability

Mfg Cycle = ƒ(X1, X2, X3, …)

35
 Fishbone Diagram for Vital X’s
Materials Machines Manpower
Delivery Availability Availability
Performance
Material Capability Capability
Quality
Mfg Cycle
Make vs Buy

Material
Flow

Mother
Methods Measurements
Nature
Assuming
Assumingon-time
on-timedelivery
deliveryof
ofquality
qualitymaterials
materialsand
andavailable
availablelabor,
labor,
the
thefocus
focusof
ofthe
theproject
projectwill
willbe
beon
onmachine
machinecapability
capabilityand
and
availability,
availability,and
andthe
themethods
methodsof
ofproduction.
production.
36
The Transfer Function (model)

37
The goal of the analysis is to reduce the number of
model-predicted cycle observations that are greater
than the established target cycle. This will result in a
shift in the standard deviation, although the main
effect will be to eliminate the right tail of the
distribution. The mean will also be reduced indirectly.

A 2k Factorial DOE will be performed to analyze the

effects of each vital X: Machine Changeover Time,
Machine Downtime and Crane Move Time.

38
Problem with Spread

Desired
Current
Accurate
Accuratebut
butnot
notPrecise
Precise Situation

LSL
LSL TT USL
USL

39
Problem with Centering

Current
Desired Situation
Precise
Off Target
Precisebut
butnot
notAccurate
Accurate

LSL
LSL TT USL
USL

40
 Base Run
Histogram of Base Run, with Normal Curve

14

12

10
Frequency

0
-30 -25 -20 -15 -10 -5 0 5 10

Base Run

41
 Minitab Analysis
Process Performance
Actual (LT)
Potential (ST) Process Benchmarks
USL Actual (LT) Potential (ST)

Sigma 0.68 0.89

(Z.Bench)

-40 -30 -20 -10 0 10 20 30

PPM 247356 186612

42
 Run Chart for Base Run

10

0
Base Run

-10

-20

-30

10 30 50 70
Observation
Number of runs about median: 24.0000 Number of runs up or dow n: 48.0000
Expected number of runs: 38.0000 Expected number of runs: 49.0000
Longest run about median: 9.0000 Longest run up or dow n: 4.0000
Approx P-Value for Clustering: 0.0005 Approx P-Value for Trends: 0.3901
Approx P-Value for Mixtures: 0.9995 Approx P-Value for Oscillation: 0.6099

43
 Observations
• It is obvious from the run chart above that
something must be done to prevent late
deliveries in weeks 10 through 45. From
our CTQ Flowdown, we know that we
have some degree of control over machine
cycle times, setup and down times and
crane availability. However, at this point
we do not know which of these factors will
have the greatest impact on overall cycle
time.
44
 Experimental Design
Experiment Table

Run 1 Run 2 Run 3 Run 4

0/0/0 30/0/0 30/30/0 30/0/30 2k Factorial DOE for
Field Cycle Time
Run 5 Run 6 Run 7 Run 8
0/30/0 0/30/30 0/0/30 30/30/30

Run 1 = Base Run

Factor Level 1 Level 2

Changeover: 0% 30% Levels represent the %
Downtime: 0% 30% reduction in average
Crane Time: 0% 30% time for each parameter.
45
 Results Table
Results Table: DPMO

Run 1 Run 2 Run 3 Run 4

247,356 224,386 72,795 30,748 Project Goal:
90% Reduction
Run 5 Run 6 Run 7 Run 8 in DPMO !!
121,242 12,762 61,384 8,505

Run 1 = Base Run

46
 Results Table: DPMO

Run 1 Run 2 Run 3 Run 4

247,356 224,386 72,795 30,748 2k Factorial DOE for
Field Cycle Time
Run 5 Run 6 Run 7 Run 8
121,242 12,762 61,384 8,505

Run 1 = Base Run

Run 6 and Run 8
provide over 90%
Factor Level 1 Level 2 reduction in Field
Changeover: 0% 30% cycle-time defects.
Downtime: 0% 30%
Crane Time: 0% 30%

47
Choosing a Feasible Solution
• Run 6 = 30% reduction in crane move time
plus a 30% reduction in machine downtime
• Run 8 = 30% reduction in all parameters
(changeover, downtime & crane move time)
• Neither solution considered feasible due to
extensive downtime reduction requirement.
• Therefore, we must consider additional
scenarios with lesser degrees of downtime
reduction.

48
 DOE

Run 2 Run 5

Run 7

49
 Additional Scenarios
• Run 9 = 30% reduction in Crane move time
plus a 10% reduction in Machine downtime
• Run 10 = 30% reduction in Crane move time
plus a 20% reduction in Machine downtime

• Run 9 DPMO = 24,325 (> 90% reduction in

baseline cycle-time defects). Therefore, this
solution chosen as feasible.
• Run 10 not necessary

50
 Implementation and Results

Improvement plans will need to be carried out by the

ST/Gen Production Team. Two specific action items
resulting from this project include:

1) Launch of a focused six-sigma project to reduce

Crane move times by 30%.
2) Launch of a focused six-sigma project to reduce
Machine downtime by 10%.

51
 Measure Tools
ToolsUsed:
Used:Fishbone
Fishbonediagram,
diagram,As-is
As-isProcess
ProcessMap
Map
Takeaways:
Takeaways:Vital
VitalX’s
X’sinclude
includeChangeover
Changeovertimes,
times,Machine
Machinedowntimes
downtimes
and Crane move times.
and Crane move times.
PRACTICAL PROBLEM

Tools
ToolsUsed:
Used:22KFull
K
FullFactorial
FactorialDOE
DOEusing
usingaadiscrete-event
discrete-eventsimulation
Analyze model to predict future Field cycle times.
model to predict future Field cycle times.
simulation

Takeaways:
Takeaways:Initial
Initialsolutions
solutionswere
wereinfeasible
infeasibledue
dueto
toDT
DTrequirements.
requirements.
STATISTICAL PROBLEM
Tools
Tools Used:
Used:Additional
Additionalexperiments
experimentsrun
runbased
basedon
ontrends
trendsidentified
identifiedin
in
22KFull
K Factorial DOE. Solution found requires only a 10% reduction
Improve in
Full Factorial DOE. Solution found requires only a 10% reduction
in machinedowntime.
machine downtime.
Takeaway:
Takeaway:ST/Gen
ST/GenProduction
ProductionTeam
Teamto
toLaunch
Launchfocused
focused6σ
6σprojects
projects
to
to reduce Crane move time by 30% and Machine downtime by10%.
reduce Crane move time by 30% and Machine downtime by 10%.
STATISTICAL SOLUTION

Takeaway:
Takeaway:ST/Gen
ST/GenProduction
ProductionTeam
Teamresponsible
responsiblefor
forlong
longterm
Control control
term
control of new procedures developed in the focused 6σ projectsto
of new procedures developed in the focused 6σ projects to
reduce Crane move time and Machine Downtime.
reduce Crane move time and Machine Downtime.

STATISTICAL CONTROL DPMO

DPMOreduced
reducedfrom
from247,356
247,356toto24,325
24,325(>90%)
(>90%)
ZZLT increased from 0.68 to 1.97
PRACTICAL
PRACTICALSOLUTION
SOLUTION LT increased from 0.68 to 1.97

52
 Conclusion
• Simulation takes into account process variation,
uncertainties and interdependencies
• Simulation can test many alternative solutions quickly
and easily
• Models can be developed with little risk and no
disruption to existing processes
• Simulation takes the subjectivity and emotion out of
decision making
• Animation features make simulation a good tool to help
“sell” others on the best solutions
• Reusable models encourage continuous improvement
• Impact on upstream or downstream
customers/operations/processes can be considered

53