EME4196

QUALITY ENGINEERING
TRIMESTER#1 (2019-2020)
CHAPTER#2:
TOTAL QUALITY MANAGEMENT AND SIX
SIGMA
The material in these notes were adapted from “Quality Control”
(8th edition, Prentice Hall, 2009) by Dale H. Basterfield.
(A) SYLLABUS
• Principle and practices of TQM
• Customer satisfaction
• Cost of quality
• ISO 9000
• PDCA cycle
• Introduction of Six Sigma
• DMAIC
• DFSS
• Lean Six Sigma.

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(A) SYLLABUS
Contents

TQM

1. Introduction to TQM

2. Basic Approaches to TQM

3. Cost of Poor Quality

4. Deming’s 14 Points

5. Summary Of TQM

6. ISO 9000: The International Standard for Quality Management Systems

7. Plan-Do-Check-Act: ISO 9000’s Operating Principle

SIX SIGMA [Slide 52-75]

1. Six Sigma

2. DMAIC

3. Design For Six Sigma(DFSS)

4. Lean Six Sigma 3
(B) LEARNING OUTCOME
CLO1: Discuss problems related to quality engineering
practices in various industries.

(cognitive – understanding, level 2)

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2.1 Introduction To TQM
• Total Quality Management (TQM) is the application of quantitative methods and human
resources to improve all the processes within an organization and exceed customer
needs now and in the future.

• TQM is an enhancement to the traditional way of doing business. It is a proven technique

to guarantee survival in world-class competition.

• Only by changing the actions of management will the culture and actions of an entire
organization be transformed.

• TQM:
 Total – Made up of the whole
 Quality – Degree of excellence of the product or service
 Management – Act, art or manner of handling, controlling, directing etc.
 TQM is the art of managing the whole to achieve excellence.
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 The purpose of TQM is to provide a quality product to customers, which
will, in turn, increase the productivity and lower cost.
 TQM allows the organization to achieve the business objectives of
profit and growth.
 Job Security. TQM creates a satisfying place to work
 A company will not begin the transformation to TQM until it is aware
that the quality of the product or service must be improved.
 TQM requires a cultural change
 TQM is better way to run a business and compete in domestic and
word markets.
 Quality is first among equal cost and service.
 Improvements in quality lead directly to increased productivity.

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2.2 Basic Approaches to TQM
• TQM requires six basic concepts:
i. Leadership - A committed and involved management to provide long-term
top-to-bottom organizational support.
ii. Customer Satisfaction - An unwavering focus on the customer.
iii. Employee Involvement - Effective involvement and utilization of the entire
work force.
iv. Continuous Process Improvement - Continuous improvement of the
business and production processes.
v. Supplier Partnership - Treating suppliers as partners.
vi. Performance Measures - Establishing performance measures for the
processes.
• The purpose of TQM is to provide a quality product to customers, which will, in
turn, increase productivity and lower cost. With a high-quality product and
lower price, competitive position in the marketplace will be enhan7ced.
 New and Old Cultures

Quality Element Previous State TQM

Definition Product-Oriented Customer-oriented
Second to service First among
Priorities
and cost service and cost
Decisions Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality Control Everyone
Prob. Solving Managers Teams
Procurement Price Life-cycle costs
Manager’s Role Plan, enforce etc Delegate, facilitate

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2.2.1 Leadership
• Senior management must recognize that the quality function is no more
responsible for product and service quality than finance function is
responsible for profit and loss.
• Quality, like cost and service, is the responsibility of everyone in the
organization, especially the CEO.
• Commitment to quality becomes part of the corporation’s business strategy
and leads to enhanced profit and an improved competitive position.
• To achieve never-ending quality improvement, the CEO must be directly
involved in the organization and implementation of the quality
improvement activity.
• In addition, the entire management team needs to become leaders.

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 Characteristics of successful leaders
1) Give priority attention to external and internal customers and their needs

2) Empower, rather than control, subordinates

3) Emphasize improvement rather than maintenance

4) Emphasize prevention

5) Encourage collaboration rather than competition

6) Train and coach, rather than direct and supervise

7) Learn from problem

8) Improve communications

9) Demonstrate their commitment to quality

10) Choose suppliers on the basis of quality, not price

11) Establish organizational systems to support the quality effort

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12) Encourage and recognize team effort
2.2.1.1 Implementation
• Begins with the Senior Management’s and the CEO’s commitment.
• Involvement is required and critical.
• Requires the education of Senior Management in TQM concepts.
• Timing of the implementation process can be very important.
• Formation of the Quality Council.
• Development of Core Values, Vision Statement, Mission Statement,
Quality Policy Statement.

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2.2.1.2 Quality Council
• Composed of:
i. CEO
ii. the Senior Managers of the functional areas, such as design,
marketing, finance, production and quality
iii. and a coordinator or consultant.
• The coordinator will ensure that the team members are empowered and
know their responsibilities.

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• Quality Council Duties:
 Develop the core values, vision, mission, and quality policy
statements.
 Develop the strategic long-term plan with goals and the annual
quality improvement program with objectives.
 Create the total education and training plan.
 Determine and continually monitor the cost of poor quality.
 Determine the performance measures for the organization.
 Determine projects that improve the processes.
 Establish multifunctional project and departmental or work group
team.
 Establish or revise the recognition and reward system.
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 Once a TQM program is well established, a typical meeting agenda
might have the following items:
 Progress report in teams.
 Customer satisfaction report.
 Progress on meeting goals.
 New project teams.
 Recognition dinner.
 Benchmarking report.
 Eventually, possibly within 3 to 5 years, the quality council activities will
become so ingrained in the culture of the company that they will
become a regular part of the executive meetings.

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2.2.1.3 Core Values
• Core values and concepts foster TQM behavior and define the culture.
• Each organization will need to develop its own values.
• Examples of core values are Leadership, Customer-driven, Learning,
Focus on the Future, Innovation and Focus on Results.
• The core values are part of the quality statements.
• They should be simplified for publication within and outside the
organization.

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2.2.1.4 Quality Statements
• Include the Vision Statement, Mission Statement, and Quality Policy
Statement
• Once developed, they are only occasionally reviewed and updated.
• They are part of the strategy planning process, which includes goals and
objectives.
• Develop with input from all personnel.
• Examples:
– Living up to its established principles of excellence in environmental
protection, health and safety.
– Utilizing all resources productively
– Continually improving processes and products
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2.2.2 Customer Satisfaction
• “The customer is always right”?
• Although the customer is “king”, diplomacy and education are sometimes
necessary.
• Customer expectations are constantly changing.
• Satisfaction can be a function of the entire experience with the
organization.
• Organizations should strive to maintain customers for life. On the average,
it is said that it takes five times as much money to win a new customer as
to retain an existing one.

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2.2.2.1 Who is the Customer?
• External Customer
– those who receive the final products.
– occurs normally at the organizational level.
• Internal Customers
– occur at the process and cross-departmental levels within the company.
• Identifying Customers:
 What parts or products are produced?
 Who uses our parts or products?
 Who do we call, correspond/interact with?
 Who supplied the inputs to the process?
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• Checklist to improve satisfaction:
 Who are my customers?
 What do they need?
 What are their measures and expectations?
 How is my product or service?
 Does my product or service exceed expectations?
 How do I satisfy those needs?
 What corrective action is necessary?
 Are customers included on teams?

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2.2.2.2 Customer Feedback
• In order to focus on customers, an effective feedback program is necessary.
The objectives are:
– Discover customer dissatisfaction.
– Discover relative priorities of quality with other attributes such as price and delivery.
– Compare performance with the competition.
– Identify customer needs.
– Determine opportunities for improvement.

• Data collection tools:

– Comment cards and formal surveys.
– Focus groups.
– Direct customer contacts.
– Field Intelligence.
– Study complaints.
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2.2.2.3 Customer Complaints
 Survey done on retail customers showed that dissatisfied customers rarely
complain.
 Only about 1% complain to management, 18% complain to front-line people and 81%
do not complain.
 About 25% of the dissatisfied customers will not buy that brand again and the
manufacturer would have lost potential sales without any explanation.

 Complaints are Opportunity for quality improvement!

 Procedure for customer complaints, such as:
 Accept complaints.
 Feedback complaint information to all people.
 Analyze complaints .
 Eliminate the root cause.
 Report results of all investigations and solutions to everyone involved .
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2.2.2.4 Service After The Sale
 An essential characteristic of customer satisfaction occurs after the sale.
 An organization can create a market advantage by being the best in this
area.
 Basic Elements of Service Quality:
 Organization
 Customer
 Communication
 Front-Line People
 Leadership

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2.2.3 Employee Involvement
• Can be described as any activity by which employees participate in work-
related decisions and improvement activities, with the objectives of tapping
the creative energies of all employees and improving their motivation
• “No resource is more valuable to an organization than its people”
• Management actions rather than “lip service” will more to motivate
employees than short-lived programs.
• According to Deming, only 15%of quality problems are due to local faults
(operators and first-line supervisors). The rest (85%) are due to the system
(management).

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2.2.3.1 Project Teams
• The Japanese had excellent success with their quality control circles.
However, only 10% of the overall success of the Japanese can be
attributed to it.
• In most cases, these project teams were not successful due to lack of
management support, little first-line supervisor involvement, insufficient
training and poor projects.
• However, the team concept is key in improving quality and productivity.
• Teams may be departmental or multifunctional and standing or ad hoc.

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2.2.3.2 Education And Training
• The cost of education and training for all personnel is enormous and the
time to achieve it is lengthy.
• Educational needs vary by function area, department and job.
• In addition to education related to quality, a rigorous program of retraining
people in skills to keep up with changes in materials, methods, product
designs and machinery is desirable.
• Quality Council may want to establish a project team for the planning of
the program.

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2.2.3.3 Suggestion System
• A suggestion system can be developed that will provide another approach
for quality improvement.
• In order to be effective, action by management is necessary on each
suggestion.
• Most suggestion systems requires identification of a problem and a
solution.

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2.2.4 Continuous Process Improvement
• The Goal is to achieve perfection:
– View work as a process.
– Make all processes effective, efficient, and adaptable.
– Anticipate changing customer needs.
– Control in-process performance using measures such as scrap reduction.
– Maintain constructive dissatisfaction with the present level of performance.
– Eliminate waste and rework.
– Investigate non-value added activities.
– Eliminate nonconformities.
– Use benchmarking to stay competitive.
– Lessons learned.
– Use tools such as SPC, design of experiments etc.
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2.2.5 Supplier Partnership
• On average, 40% or more of product or service cost is due to procurement.

• In order for both parties to succeed, a partnership is required.

• The supplier should be treated as an extension of the product process.

• The supplier should be given a long-term relationship and purchase contract.

• However, single sourcing with a large contract will create better quality at a lower cost but
delivery disruption is possible.

• Effective supplier selection criteria may include:

– the supplier’s ability to provide quality products as evidenced by the quality
system
– The supplier’s control of its own suppliers

• A well-designed checklist with weights for different criteria will aid in the evaluation and
selection process.

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• Incoming material can be evaluated by:
– Third party at the supplier’s plant
– 100% inspection at the purchaser’s plant
– Acceptance sampling
• A certified supplier is one that can supply quality materials on a long-term
basis.
• Periodic audits are conducted to ensure conformance.
• Supplier quality rating systems can be used to provide an objective
measure of a supplier’s performance.
• In order for supplier partnering, there must a long-term commitment, trust
and shared vision.
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2.3 Cost Of Poor Quality

• In the final analysis, the value of quality must be based on its ability to
contribute to profits; therefore the most effective measure is the cost of
poor quality.
• The cost of poor quality crosses departmental lines by involving all
activities of the company.
• Therefore, the cost of poor quality can be defined as those costs
associated with the nonachievement of product or service quality as
defined by the requirements established by the organization and its
contracts with customers.

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• There are four cost of poor quality categories and elements:
 Prevention Costs:
 Costs of minimizing failure and appraisal costs
 Appraisal Costs:
 Costs of determining the degree of conformance to quality
requirements
 Internal Failure Costs:
 Costs resulting from defects found before the customer receives
the product or service
 External Failure Costs:
 Costs resulting from defects found after the customer receives
the product or service
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• Once the problems areas has been determined, a project team can be
established.

• Based on the quality improvement strategy, the following strategies can be used:
 Reduce failure cost.
 Failures detected at the beginning of operations are less costly.
 Find the root cause of the problem.
 Prevention of costs due to poor quality.
 Prevention activities related to employee attitudes.
 Formal techniques to prevent quality problems.
 Reduce appraisal costs.
 As failure costs are reduced, the need for appraisal activities will
most likely be reduced as well.
 Review of the entire appraisal activity to determine its
effectiveness.
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2.4 Deming’s 14 Points
i. Create consistency of purpose.
ii. Lead to promote change.
iii. Build quality into the product; stop depending on inspection.
iv. Build long term relationships based on performance, not price.
v. Continuously improve product, quality, and service.
vi. Start training.
vii. Emphasize leadership.
viii. Drive out fear.
ix. Break down barriers between departments.
x. Stop haranguing workers. 33
xi. Support, help, improve.
xii. Remove barriers to pride in work.
xiii. Institute a vigorous program of education and self-improvement.
xiv. Put everybody in the company to work on the transformation.

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2.5 Summary Of TQM

• Effective implementation of TQM will allow organizations to achieve the

vision of:
 Customer receive what they order without nonconformance, on time,
in the right quantity, shipped and billed on time.
 Suppliers meeting requirements.
 Salespeople determine customer needs.
 New products and processes are developed to agreed-on
requirements, as scheduled, and at lower costs.
 People enjoy their work.
 Organizations makes a profit or serves its constituency effectively.

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 2.6 ISO 9000: The International Standard for
Quality Management Systems
• The ISO 9000 is a family of standards and guidelines related to the quality
management system (QMS).

• It sets the requirements for the assurance of quality and for management’s
involvement.

• The thrust of ISO 9000 is for organizations to implement a QMS conforming to the
standard’s requirements and, through the consistent , rigorous employment of the
QMS, to:
 Improve customer satisfaction by fulfilling customer requirements

 Achieve continual improvement of organizational performance and

competitiveness
 Continually improve its processes, products, and services
 Comply with regulatory requirements 36
• ISO 9000 does not specify a level of quality or performance for any product or
service provided by an organization.
• The ISO 9000 is about standardizing the approach organizations everywhere
use to manage and improve processes that ultimately result in their products
and services.
• When an organization demonstrates conformity to ISO 9001 to an independent
(3rd party) registrar firm, the registrar can certify (register) the organization.
• Registration provides assurance to customers worldwide that products or
services from the organization can be expected to consistently meet customer
requirements.
• To maintain its registration, the organization must constantly strive to ensure
that the QMS continues to function effectively and that it is continually
improved.

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2.6.1 The Eight Principles of ISO 9000
• The ISO 9000 QMS is based on eight principles from total quality management
(TQM):
1. Customer focus
– Understand the customer’s needs, meet customer’s requirements and
strive to exceed expectations
2. Leadership
– Establish unity of purpose and organizational direction
– Provide and environment that promotes employee involvement and
achievement of objectives.
3. Involvement of People
– Take advantage of fully involved employees, using all their abilities for the
benefit of the organization

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4. Process Approach
– Recognize that things are accomplished as the results of processes and
that processes along with related activities and resources must be
changed
5. System Approach to Management
– The multiple interrelated processes that contribute to the organization’s
effectiveness are a system and should be managed as a system
6. Continual Improvement
– CI should be a permanent objective applied to the organizations and to its
people, process, systems and products
7. Factual Approach to Decision Making
– Decisions must be based on the analysis of accurate, relevant, and
reliable data and information
8. Mutually Beneficial Supplier Relationship
– Both the organization and the supplier benefiting from one another’s
resources and knowledge results in value for all
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2.6.2 ISO 9000’s Objective
• The original aims of ISO 9000 are to ensure that the products or services
provided by the registered organizations were consistently fit for their intended
purpose.
• The ISO 9000 raised the standard’s aim to a new level.
• Customer focus and CI, along with the other six quality management principles
that have been incorporated into the standard, are intended to make the
registered organizations more competitive.
• This is essentially the same objective as that of total quality management.

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2.6.3 How IS0 9000 Is Applied To Organisations

• Once a management decides to go with ISO 9000, then it is faced with the
task of developing its QMS to conform to the requirements of ISO 9001.
• The ISO 9001 lays downs the requirements for what an organization’s QMS
must do but does not dictate how the QMS should do it in any particular
organization.

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2.6.4 The ISO 9000 Quality Management System:
A Definition.
• To secure registration, organizations must develop and use QMS conforming
to the requirements of ISO 9001.
• QMS definition:
– The quality management system is composed of all the organization’s
policies, procedures, plans, resources, processes and delineation of
responsibility and authority, all deliberately aimed at achieving product
or service quality levels consistent with customer satisfaction and the
organization's objectives. When these policies, procedures, plans and
so forth are taken together they define how the organization works and
how quality is managed.

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• QMS will include the following documentation:
– A quality policy – the statement describes how the organization
approaches quality
– The quality manual – this must address each clause of the ISO 9001
standard such as organization chart, management responsibility for
operating the quality system and quality procedures
– Quality objectives – these are the goals related to quality and must be in
harmony with the quality policy
– Quality procedures – these describe step by step what the company
does to meet the quality policy
– Forms, records, and so on – these provide proof of activities for the firm
and for the auditors

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2.6.5 ISO 9001 And Industry-specific
Applications
• It is common now that customers require their suppliers to be registered to ISO
9001:2000
• Although the ISO 9001 standard is intentionally generic so that it can be
applied to any given organization, selected industries have tailored it
specifically for their own use.
• Industry-specific versions of the ISO 9001 standard encourages:
– The training and deployment of auditors with industry-specific knowledge
rather than ISO 9001 generalists
– A more accurate interpretation of the standard for a given industry

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• Sectors that have adapted the standard to its unique requirements and also
renamed the standard accordingly:
 ISO/TS 16949 (QS 9000) - Automotive industry
 AS 9100 – Aerospace sector
 TE 9000 – Tooling and equipment sector
 TL 9000 – Telecommunications sector
 TickIT – Information technology industry
 ISO 13485 – Medical industry
 ISO/TS 29001 – Petroleum, petrochemical and natural gas industries
• The ISO 9001 is embedded in each of these standards, along with additional
requirements to satisfy the sector’s unique needs.

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2.6.6 Organizational Registration to ISO 9001
• An organization that is registered by a recognized certification body will have
more credibility in the world’s marketplace.
• An organization that wants a conforming ISO 9000 QMS must go through the
following steps:
i. Develop (upgrade) a quality manual that describes how the organization
will assure the quality of its products or services
ii. Document procedures that describe how the various processes for
design, production, continual improvement etc will be operated
iii. Top management’s commitment to the QMS and CI
iv. Top management must ensure that customers requirements are
determined and met

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 v. Hire an accredit registrar
vi. Continue its own internal audits to ensure that the systems, processes
and procedures are working effectively
vii. Once registered, the outside registrar will make periodic audits for the
same purpose.
• The organization needs to respond to all the ISO 9001 requirements and tell
the registrar….
what is it going to do and
how it is to be done.
• To retain registration, the organization….
must do what it said it would do

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2.6.7 Benefits Of ISO 9000

(1) Organizational benefits

1. Customer satisfaction
2. Cost benefits
3. Risk-management benefits
• These benefits translate to improved competitiveness; which is the same as
TQM’s objective
• ISO claims these benefits result from emphasizing the 8 quality management
principles

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(2) Customer benefits
• Customer want products/services that meet their requirements, at a
competitive price also.
• Like TQM, ISO 9001 can help in both areas.
• Customer requirements will be met if the organization listens to customers and
designs and manufactures its products accordingly.
• Prices can be competitive because waste is minimized as improved processes
become more efficient.
• Customers will have increased confidence in the products/services.

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2.7 Plan-Do-Check-Act: ISO 9000’s Operating
Principle

• PDCA is now the operating principle of ISO’s management system standards.

• Function is to operate in an never-ending loop.
 Plan – establish the objectives and develop the plans to achieve them
 Do – put the plans into action
 Check – measure the results of the action
 Act (Adjust) – Learn from the third step and make any necessary changes
to the plan, and repeat the cycle.

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2.8 Six Sigma
Historical Review
• 1980’s at Motorola, which won the Baldrige National Quality Award in 1988
• Significant improvement in quality.
• Six Sigma is both a quality management philosophy and a methodology that
focuses on:
 reducing variation
 measuring defects
 improving quality of products, processes and services.

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• Six Sigma is a methodology that blends together many of the key elements of past
quality initiatives while adding its own special approach to business management.
• Essentially, Six Sigma is about results:
enhancing profitability and
reducing costs
through improved quality, productivity and efficiency.
• Six Sigma emphasizes
– the reduction of variation,
– a focus on doing the right things right,
– combining of customer knowledge with core process improvement efforts,
and
– a subsequent improvement in company sales and revenue growth.
• The Six Sigma methodology is based on knowledge. Practitioners need to know
statistical process control techniques, data analysis methods and project
management techniques.
• Systematic training within Six Sigma organizations must take place. 53
• Green belts are individuals who have completed a designated number of hours
of training in the Six Sigma methodology (example: data collection, check
sheets, Pareto analysis, scatter diagram, cause and effect diagrams etc.)
• In addition to that, they must also complete a cost-savings project of a specific
size within a stipulated amount of time.
• On the other hand, Black belts are individuals with extensive training in the Six
Sigma methodology (example: reliability, variable control charts, ISO 9000,
QFD, DOE, Regression analysis etc.)
• To become a Black belt, the individual must have completed a number of
successful projects under the guidance of a Master Black belt.
• Some companies will require the individual to have postgraduate qualifications
in order to obtain Master Black belt.

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2.8.1 DMAIC
Improvement Methodology
• DMAIC stand for:
i. Define,
ii. Measure,
iii. Analyze,
iv. Improve,
v. Control..
• Each phase requires a progress report to management.

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(i) Define

• Consists of project charter, process map, and the voice of the customer.

(ii) Measure

• Objective - understand the process, validate the data accuracy, and determine the process capability.
• This information is used to review the define phase, establish a baseline, and obtain a better knowledge of the
process.

(iii) Analyze

• Phase consists of process analysis, cause investigation, charter updating.

• Objective - Pinpoint and verify causes affecting problem

(iv) Improve

• This phase selects optimal solution, tests a pilot, and implements solution.

• Objective – improved process to meet goals.

(v) Control

• This phase consists of evaluating the process, standardizing the procedures, and final actions.

• It’s objective is to evaluate the effectiveness of the improvement.

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Summary
• Six Sigma works because it gives bottom line results; trains leaders; reduces
variation, improves quality, increases customer satisfaction, and uses
statistical techniques.
• Continuous improvement requires everyone to continually seek ways to
improve the processes.
• Establish the system to continually review the continuous improvement culture.
• Track changing customer requirements
• Orderly approach yields the greatest results.

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2.8.2 Design For Six Sigma (DFSS)
• DMAIC methodology is used when companies have existing processes that
are wasting resources.
• Design For Six Sigma (DFSS) approach is used to design a new product for
Six Sigma quality.
• DFSS is used to design or re-design a product or service from the ground up.
• The expected process Sigma level for a DFSS product or service is at least 4.5
(no more than approximately 1 defect per thousand opportunities), but can be
6 Sigma or higher depending the product. Producing such a low defect level
from product or service launch means that customer expectations and needs
(CTQs) must be completely understood before a design can be completed and
implemented.

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• One popular Design for Six Sigma methodology is called DMADV.
• The DMADV approach is defined as: Define, Measure, Analyze,
Design and Verify.
 Define the project goals and customer (internal and external)
requirements.
 Measure and determine customer needs and specifications;
benchmark competitors and industry.
 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.
• The main tools used in DFSS include:
– QFD - Quality Function Deployment
– FMEA - Failure Mode Effect Analysis
– DOE - Design Of Experiment
– and other simulation techniques.
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2.8.3 Lean Six Sigma
• The Lean Six Sigma methodology views
lean manufacturing, which addresses process flow and waste issues, and
Six Sigma, with its focus on variation and design,
as complementary disciplines aimed at promoting "business and operational
excellence".

• It serves as a foundation for innovation throughout the organization, from

manufacturing and software development to sales and service delivery
functions.

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2.8.3.1 Lean Manufacturing
Lean Fundamentals
i. Types of waste
ii. Categories of waste
iii. Workplace organization
iv. Concept of flow
v. Inventory control
vi. Visual management
vii. Kaizen
viii. Value stream
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i. Types of waste
– Non-value added and unnecessary for the system to function.
– Non-value added and necessary for the system to function.
– Non-value added due to variation in quality, cost, or delivery.
– Non-value added due to overstressing people, equipment, or system.
ii. Categories of waste
– Overproduction—Producing more, earlier, or faster then required by the
next process.
– Waiting—Any idle time or delay waiting for materials.
– Transportation—Any movement of material.
– Defects—Products or services that do not conform to specifications.
– Inventory—Any inventory in the value stream.
– Motion—Any motion of a person’s body.
– Extra Processing—Processing that does not add value.

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iii. Workplace organization
• 5S
– Sort—Divide items into three piles: necessary, belong to another process,
and unknown.
– Straighten—Arrange remaining items to reduce or eliminate motion.
– Shine—Practice good housekeeping.
– Standardize—Document the process.
– Sustain—Maintain by charts, checklists, and audits.
– Sometimes Safety

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iv. Concept of flow
• Continuous with a minimum of variation.
• It can:
– Reduces time between order and delivery.
– Prevents wait time and delays.
– Reduces labor & space to store and move material.
– Reveals any defects & problems early in the process.
– Reduces damage.
– Provides production flexibility.
– Reveals non-value activity.
– Forces employees to concentrate on the process.
– Equipment needs to be flexible & make changeovers quickly.
– Cell technology is applicable.

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v. Inventory control
• JIT—Right material arrives at the right time in the right amount.
• Items are pulled through the system be the internal or external customer.
• Taki (beat) time, which is the rate of production based on customer demand.
• IT system controls the entire logistics from raw material to consumer
purchase.
vi. Visual management
• A picture is worth a thousand words.
• Visual displays are used to inform people about customers, projects,
performance, goals, etc.
• Signals are used to alert people about problems.

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vii. Kaizen
• Management encourages the continual activity of small process improvements
by operators.
• Example--Black to white weld booth.
• Kaizen Blitz is a highly focused action-oriented 3-5 day improvement workshop
by a multifunction team to improve a specific process.
• Example—Managers, lawyers, regulators, technicians, & end users are tasked
to reduce time for coal mining permits.

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viii. Value stream
• The specific flow of activities required to design, order, produce, and deliver a
product or service to customer(s).
• May be more than one value stream in an organization.
• Ideally it will only include value-added activities.
– All operations are:
– Capable of meeting quality requirements.
– Available with no downtime.
– Efficient to eliminate unnecessary use of energy and materials.
– Able to meet customer demand.

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Implementing Lean
1. Establish cross-function team.
2. Train in lean fundamentals.
3. Analyze maps for best place to start.
4. Train people in lean and simple SPC tools.
5. Apply 5S and Kaizen.
6. Use Kaizen blitz where appropriate.
7. Expand to other areas.
8. Standardize the improvements.

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2.8.3.2 The Lean Six Sigma Approach
• Lean Manufacturing and Six Sigma complement each other with their
strengths; namely
.
• Leaders in Lean Six Sigma organizations practice the following effective
management techniques:
– Establishing good work procedures and standards
– Providing sound training in work procedures
– Practicing transparency or visual management
– Managing by walking around

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• Lean and Six Sigma methodologies work together so that each step in the
process is:
 Valuable (customer focused)
 Capable (Six Sigma Tools and techniques)
 Available (Lean Tools and techniques)
 Adequate (Six Sigma and Lean tools and techniques)
 Flexible (Lean tools and techniques)

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