Download - Implementing Lean Six sigma in complex industries

September 6, 2007

Implementing Lean/Six Sigma in Complex Industries: A Case Study at Endicott

Interconnect Technologies, Inc.

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How this webcast will work

Sponsored by

Implementing Lean/Six Sigma in Complex Industries

A Case Study at Endicott Interconnect Technologies, Inc.

Terence T. Burton, President

The Center for Excellence in Operations, Inc.

Terence T. Burton, PresidentBrad VanBrunt, Vice President , QualityAnd Business Excellence

Endicott, Ney YorkBedford, New Hampshire

Sponsored by

Agenda

Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Five Essential Success Factors

3

EI Corporate Profile

A tradition of technical innovation -former IBM Microelectronics DivisionNovember 2002 spin-off as an entrepreneurial, independent companyLocated in Central New York1,800 employees1.6M sq. ft. manufacturing and lab floor space2006 revenue $220M4-5% of revenue spent on R&D

Leading supplier of complex, high-performance electronic packaging solutions utilizing a vertically integrated approach

4

Mission Statement:To provide leading edge first and second level packaging and assembly solutions that bring value and competitive differentiation to our customers.

Vertically Integrated Provider with Broad Skill Set

Products

• PCB Assembly• Hybrid Assembly• Mechanical Assembly/Test

• Multi-Layer PCBs• Complex Backplanes

• Wire Bond PBGA• CoreEZ™• HyperBGA®

• Custom Design & Manufacturing• Physical Design• Reliability Test & Modeling• Materials Engineering

Semiconductor Packaging

Precision Equip. Manufacturing / Services / Other

Complex Assembly Solutions

PrintedCircuit Boards

CoreEZ™ and HyperBGA® are registered trademarks of Endicott Interconnect Technologies, Inc.

5

EI - Highly Differentiated Products & Capabilities

PCBs

• Broad competency set

• World class quality and reliability

• High density-fabrication leading edge PCB

–Precision layer-to-layer registration

–20:1 plating aspect ratio

• Unique high-speed boards with high performance cores

• Talented engineering team

• Test and analysis capabilities

Semiconductor Packaging

• Advanced flip chip and wire bond substrate technology

–Organic substrates - light weight

–High frequency applications

–Thin, low profile fits easily in tight board-to-board spaces

–Full strip line structures with low coupled noise

• Outstanding thermal and electrical performance

• High reliability (2-10 times ceramic)

• Superior System-in-Package solutions

Complex Assembly

• Complex, mission critical assembly

• Ability to manage large military contracts as the prime contractor

• Leading edge assembly processes

–Module assembly capability

–Full hybrid assembly, backplane, chassis and system build

• Focused New Product Initiative to production launch

• Extensive test capabilities

• Outstanding service and delivery performance

Sponsored by

Agenda

Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Integrate and Win Big

© 2007 by Endicott Interconnect Technologies, Incand The Center for Excellence in Operations, Inc. (CEO)

Avoid the “Tornado of Improvement” and fad improvement programs

StatisticalQualityControlControl

Charts

2000

1990

1980

1970

1960

1950

1940

1930

1920

PDCA

ToyotaProduction

System (TPS)

QualityControlCircles

Theory ofConstraints Just In Time (JIT)

Total QualityManagement (TQM) MRP

MRP II

Business ProcessReengineering (BPR) LeanSix Sigma

Lean/Six Sigma

ERP

SRMCRM PLMSCM

Scientific InventoryManagement

Triz

Innovation

Six Sigma

in a Box

“Same box, different ribbon”

Six Sigma

in a Box

House of Quality

The Road to LeanKaizenExpress

Value Stream

EVAABC

Objective: Grow from a “good” company to a “great” companyChallenge: Deploy Lean/Six Sigma successfully as the enabler


6σSmall and MidSmall and Mid--Sized OrganizationsSized OrganizationsProblems with the traditional topProblems with the traditional top--down approach to Six down approach to Six SigmaSigma

Dedication of full time resources as Master Black Belts, Black Belts

Potential of $Millions in “up-front” investment with a

1 to 2+++ year payback

“Training of the masses” based on accepted ratios (versus true requirements) as the first step

Too much focus on “Belts” and not enough focus on “Results”Mad Belt Disease

Dedication of full time resources as Master Black Belts, Black Belts

Potential of $Millions in “up-front” investment with a

1 to 2+++ year payback

“Training of the masses” based on accepted ratios (versus true requirements) as the first step

Too much focus on “Belts” and not enough focus on “Results”Mad Belt Disease


6σSmall and MidSmall and Mid--Sized OrganizationsSized OrganizationsProblems with the traditional topProblems with the traditional top--down approach to Six down approach to Six SigmaSigma

Speed of deployment is too slow – Smaller and mid-sized organizations want and need results NOW!

The large scale Six Sigma deployments of GE, Honeywell, Caterpillar, etc. are an overkill

Not affordable, not sustainable, not necessary to achieve significant results in smaller/mid-sized enterprises

Bureaucratic hierarchy with layers of Champions, Master Black Belts, Black Belts, Green Belts, Yellow Belts (Counter to how small and mid-sized organizations work)

Organizational Complexity, Politics, and Culture Simplified in Smaller and Mid-Sized Organizations

Speed of deployment is too slow – Smaller and mid-sized organizations want and need results NOW!

The large scale Six Sigma deployments of GE, Honeywell, Caterpillar, etc. are an overkill

Not affordable, not sustainable, not necessary to achieve significant results in smaller/mid-sized enterprises

Bureaucratic hierarchy with layers of Champions, Master Black Belts, Black Belts, Green Belts, Yellow Belts (Counter to how small and mid-sized organizations work)

Organizational Complexity, Politics, and Culture Simplified in Smaller and Mid-Sized Organizations


CEO’s Scaleable Six Sigma™ Methodology

SixSigma

Support

Pilot

PartialDeployment

Full ScaleDeployment

2-3 Projects(6-8 weeks)

$200K Savings

15-25 Projects(4-6 months)$1.5 Million +

Additional Savings

20-25 Projects(4-6 months)

$3-5 Million + Additional Savings

Most organizations accomplish this inside of a 12 month window

Deg

ree

of S

ix S

igm

a D

eplo

ymen

t

Six SigmaApplications

Expertise

DeepKnowledgeof BusinessProcesses

and IT

Leadership

StrategicImprovementCompetencies

Six SigmaEducation

No-NonsenseExecution


What is “Business Excellence”Business Excellence is a philosophy of Improving

HOW we improve in EVERTHING we do as an organization:

Create a solid foundation and business/leadership process for managing improvement initiatives.Deploy more robust improvement tools for solving our critical business problems:

6 SigmaLeanKaizen (Quick strike / teaming)

Use a disciplined methodology (DMAIC) that is EI’s common language of improvement.Build a culture that strives for total employee involvement, increased competitiveness, growth, and profitability.Invest in the future of EI’s most valued resource - Our people.

Business Excellence is a philosophy of Improving HOW we improve in EVERTHING we do as an organization:

Create a solid foundation and business/leadership process for managing improvement initiatives.Deploy more robust improvement tools for solving our critical business problems:

6 SigmaLeanKaizen (Quick strike / teaming)

Use a disciplined methodology (DMAIC) that is EI’s common language of improvement.Build a culture that strives for total employee involvement, increased competitiveness, growth, and profitability.Invest in the future of EI’s most valued resource - Our people.


MeasureMeasure

AnalyzeAnalyzeImproveImprove

ControlControl

Business Excellence DMAIC Foundation

KaizenLean

6σ

DefineDefineCalibrate

Benefi

t

Characte

rize

Optimize

Take Action


Integrating Kaizen, Lean, and Six Sigma

LEAN

Value Stream ManagementSpeed, Velocity

Cycle TimeWaste Elimination

Flow, BalanceSynchronizationStandardization

SIX SIGMA

QualityProcess Perfection

Statistical EngineeringVariation ReductionKPIV/KPOV ControlsComplex Variation

KAIZEN

Basic ImprovementQuick StrikeContainment

Incremental Improvement

Transactional BusinessProcess Excellence

The Foundation (DMAIC): People working together with shared values and a common language of total

business improvement

Business ExcellenceOperations and

Technology Excellence


Business Excellence DeploymentSTEERING COMMITTEE

VP Quality *ChairCFOVP SP Panels & PWBVP Complex AssemblyVP HRVP Military/Defense Pgms.CEO, Inc.

STEERING COMMITTEEVP Quality *ChairCFOVP SP Panels & PWBVP Complex AssemblyVP HRVP Military/Defense Pgms.CEO, Inc.

PROJECT MANAGEMENTBrad VanBrunt, VP Quality *ChairBus. Excellence HireTerry Burton, CEO

PROJECT MANAGEMENTBrad VanBrunt, VP Quality *ChairBus. Excellence HireTerry Burton, CEO

LeadershipWeekly Management

Cycle Counting Process (Bill Paulos)New Product Design Verification (Roger Johnsen)

Production Planning and Execution (Verner Pekarek)Material Planning Process (Verner Pekarek)

Service Parts Order Fulfillment (Kelly Kightly)Market Strategy Process (Rob Urry)

Product Availability (Matt Bush)Local Market Compensation Compatibility (Hema Heimuli)

Overtime Reduction (Mick Quigley) Excess/Obsolete Inventory (Craig Lawson)

Recertification of B Stock (Dave Fata)Marketing Promotions Process (Randy Thorderson)

Redefine New Project (Lynn Alley)

Product Development Process (John Hanson)Supplier Selection Process (Rick Lambourne)Component Selection Process (Alan Ottley)Unplanned Maintenance (Steve Townsend)

Design for Manufacturability (Paul Marconi)Miscellaneous Transactions (Frederick Gabriel)

Receiving Process (Elpitha Votsis)Scrap Reduction (James Anderson)WeeklyWeeklyReportReportCardCard

Mentoring & FacilitationTechnical AdviceDaily Management

Mission CriticalImprovement Initiatives


Business ExcellenceHow we think, how we work, how we improve,

how we become the best in our industry

ImprovingHOW we improve

in EVERTHING we doas an organization

ImprovingHOW we improve

in EVERTHING we doas an organization

Securing ourCompetitive

FutureToday

InvestingIn our

People

Sponsored by

Agenda

Part I: Endicott Interconnect TechnologiesPart II: Lean/Six Sigma StrategyPart III: Five Essential Success Factors


Five Essential Success Factors

1.1. Leadership

2. Business Improvement Strategy

3. Deployment Planning

4. Change Awareness

5. Communication and Closed-Loop Feedback (Performance Measurement)



6σLeadership’s Roles in Lean/Six Sigma Success

5.Mandate Linkage to Business Plan6.Make Proper Investment in Resources7.Develop Communication and Awareness Effort8.Focus on Customers and Results9.Structure Around the Organization’s Needs10.Implement Regulated Program Management11.Build Teaming and Employee Involvement Culture

1. Establish Recognition of the Need2. Provide Leadership Commitment and Support3. Develop Six Sigma Strategy and Deployment Plan4. Incorporate Enterprise-Wide Scope

12.Manage Controversy and Confrontation13.Demand Frequent Measurement and Feedback14.Implement a Structured Project Close-Out Process15.Provide Recognition and Rewards16.Leverage Successes and Stay the Course

PLAN

DEPLOY

EXECUTE

Success Equals 80% Leadership / 20% ToolsSuccess Equals 80% Leadership / 20% Tools



Business ExcellenceBusiness ExcellenceA Scaleable DeploymentA Scaleable Deployment

Definition of Leadership ExpectationsOrganization for Successful Deployment

Agreement on Burning PlatformsDetailed Implementation PlanningCommunication/Awareness Plan

Macro Charter DevelopmentImprovement Resource/Capacity Management

Project Selection and ScopingBaseline Performance and Improvement Goals

Validated BenefitsEducation Planning

Customized Education ModulesProject/Candidate/Team Selection Launch

Definition of Leadership ExpectationsOrganization for Successful Deployment

Agreement on Burning PlatformsDetailed Implementation PlanningCommunication/Awareness Plan

Macro Charter DevelopmentImprovement Resource/Capacity Management

Project Selection and ScopingBaseline Performance and Improvement Goals

Validated BenefitsEducation Planning

Customized Education ModulesProject/Candidate/Team Selection Launch

Business ExcellenceBusiness ExcellenceImprovement StrategyImprovement Strategy

(Fact(Fact--Based, NeedsBased, Needs--Driven)Driven)

Customized Implementation

One SizeFits All

FadPrograms

Business Excellence LaunchThe Center for Excellence in Operations, Inc.


Business ExcellenceImplementation & Deployment Planning

Task # Task Name Responsibility

Schedule Duration

123456789

101112131415

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

TB, JSDSSCMDGM, BGHH, AELP, MCRVJVMD, GMJE, BGHH, AE

Project GB Candidate Problem Statement Objectives Baseline Performance

Improvement Goals Benefits Team Annual Savings

Product Availability Matt Bush

Too many back orders. Lost sales to competitors. Extra freight charges for multiple shipments within the same month to the same customer.

Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds current fill rate 100% fill rate

No lost sales, no extra freight charges increase customer

satisfaction and sales

Improve Market/Product Strategy process

Rob UrryOur Market strategy and product definition process will not scale with our current structure

Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs

Increased revenue from new products

Better alignment and innovation between customer/market needs and features/offerings

Production Planning and Execution

Dan Markosian

The MPS is not in sync with the SOP and /or Resource planning. Planning parameters, like lot sizes, safety inventory, lead times, capacity, not accurate or not optimized.

Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the month. Consider selected rate-based scheduling and point-of-use (POU) stocking to reduce kitting

Actual production compared to demand plan and customer order fill rate

Actual production 98% of MPS

Reduction in cycle times, increased flexibility and

responsiveness to change, less reschedules and firefighting

Dan Markosian-Master Scheduler(GB); Team: Kurt Jensen-Production Supervisor F/A, Nick Athens-Purchasing Buyer, Kim Takemori-Order Admin Manager

Material Planning Process

Sr. Director of Planning and

Materials

Too much variation/noise in the process. This causes excessive freight, wrong inventory parts, material shortages, and manufacturing inefficiencies. In addition it requires a lot of overhead to manage it.

Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock). Current material

shortages

On-time availability of material. 100% PO confirmation. 100% exception acknowledgement, 0% PO discrepancies. Advance shipping notices.

Reduction in stockouts

Supplier selection, performance measurement and development

Rick LambournePoor performing suppliers destroy value and create too much variability in the supply chain.

Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers) Current supplier

performance

Fix or phase out C & D suppliers. Reduce the number of vendors.

Rick Lambourne-Director of Procurement and Sourcing (GB); Team: Paul Howard-Director DigiTech Engineering, Linda Grow-Sr. Buyer, James Anderson-Materials Engineer, Christeen Zhao-Sourcing Agent

Component Selection and Qualification Process

Alan Ottley

Lack of formal part evaluation process creates quality cost and disruption problems. Making specs artificially tight because we don't design to tolerances that our suppliers can meet. The working range of the designs are tighter than supplier specs..

Formal material selection and qualification process and promotion of the preferred materials

Time spent bandaiding things due to out of spec tolerances

100% of new parts subject to a formal evaluation and approval process. No non-approved parts are selected when a preferred alternative exists

Improved component quality and reliability, reduction in the number of component part numbers and associated

overhead cost

Alan Ottley-Outsourcing Engineer (GB); Team: James Anderson-Materials Engineer, Raul Soto-Mfg Supervisor, Rob Deulhlmeier-Hardware Engineer

Product Development Process Improvement

John Hanson

Our current product development process - has too many steps and doesn’t allow for convenient executive review; also doesn’t incorporate software development processes. Poor record of making ship dates

Develop the overall framework and standardize the product development process within Harman Pro. Executive review of all new products in one hour.

Current new product release to Mfg. vs. business plan

On-time and on-budget delivery of new products.

Significant reduction in time-to-market and incremental

revenue/market share, increased growth through new product

leadership

John Hanson-VP Engineering Musical Instruments (GB); Team: Rich Ireland- Director of Lexicon Pro Engineering Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer

Project

Improve market/products strategy process

Cycle Counting Process

Product Availability

New Product Design Verification


Design for Manufacturing (DFM)

Software development and release process

Recertification of B-Stock





Obsolete Inventory

James Anderson XMatt Bush XDave Fata XFrederick GabrielJohn Hanson XHema Heimuli

Roger Johnsen XKelly KightlyRick Lambourne X

Craig Lawson XPaul Marconi X

Dan Markosian XAlan Ottley XBill Paulos XMick QuigleyRandy ThordersonSteve TownsendRob Urry XElpitha Votsis

Verner Pekarek X XLynn Alley XTammy Allen XDean AthensNick Athens XRob BoatrightTeresa BrinkerhoffBob PlankenHeather CowdellDavid Bybee X

Alberto CallejaLarry CorrieaPaul Day XRob Deulhlmeier XJon Duffin X

Merideth FoardJim GaryLinda Grow XPaul Howard X

Strategic Project Opportunities and BenefitsStrategic Project Opportunities and Benefits

CrossCross--FunctionalFunctionalCandidate/Team SelectionCandidate/Team Selection

CustomizedCustomizedEducationEducation•• KaizenKaizen•• LeanLean•• Six SigmaSix Sigma•• Leadership SkillsLeadership Skills•• TeamingTeaming•• Project ManagementProject Management

Deployment andDeployment andImplementationImplementation

PlanPlan

“Macro Charter”Double Revenue

Every 5 Years

Become Audio/Video

COE for H-Pro

Dominate Guitar Signal

Processing Market

Aggregate Rank

Project GB Candidate Problem Statement Objectives 10 9 8

Improve market/products strategy process Rob Urry-President (GB); Team:

Our market strategy and product definition process will not scale with our current structure

Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs 10 9 9 253


Bill Paulos-Assistant Controller (GB); Team: Georgeann Nichols-Inventory Analyst, Jeff Thompson-Cost Accounting Manager, Richard Rhees-IT

Currently we are doing reactive cycle counting, putting out fires, not using an organized process by cycle counting system generated cycle counts.

Audit the process anf fix any gaps

9 9 9 243



Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds

9 9 9 243


Roger Johnsen-Senior Director Eng Services (GB); Team: Ernie Morales – Regulatory Engineer, Mark Kohagen – Hardware Engineer, Doug Robinson – Mechanical Designer

This causes quality issues, returns and bad customer experience.

Define product verification testing process for electical and mechanical

9 10 7 236


John Hanson-VP Engineering Musical Instruments (GB); Team: Paul Howard-Engineering Manager, Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer



9 8 8 226


Paul Marconi-Director of Mfg Eng (GB); Team:Steve Young-Mfg Eng Mgr, David Bybee-CAD/PCB Designer, Gary Stout-Mechanical Design Engineer

Designs with high variability create scrap, rework, inefficiency and high warranty costs.

Robust designs (guidelines) that fit our manufacturing process. Pilot Valor and Boothroyd-dewhurst tools. Post-mortem failure review.

8 9 8 225


Lynn Alley-VP Pro Eng (GB); Team: Rick Krieifeldt-VP SDIG

Need a consistent and docummented source control methodology. Currently we only have a source code control system so no basis for tracking defect rates or other quality metrics (bug tracking). Need better change management, configuration management. Software is released with "unshippable" software bugs.

Improve the quality of software releases. Ability to incorporate industry standard source control and bug tracking tools

8 9 7 217


Dave Fata- Director of Sales Operations (GB); Team: Jim Ure-Technical Suppoort Manager, Rick Tanga-Service/Repair Manager, John Duffin-Director of Engineering, Jeff Percival-Manufacturing Engineering

Unreliable / Outdated products / old releases of software gets shipped to customers, which gives us perception of poor quality. RTS inventory dollars are too high. Returned inventory in a non-nettable location for months.

100% certainty of quality for B-Stock in inventory

8 10 4 202




Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the 8 8 6 200

Material Planning Process New guy


Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock).

8 8 6 200

Part Number Rationalition and reduction Jon Duffin

Preferred parts have not been identified and promoted. Identical parts are listed under duplicate part numbers (especially for BSS products) resulting in purchasing and inventory inefficiencies.

Reduce number of parts down to the preferred componets. Use the same part across brands

9 5 7 191



Poor performing suppliers destroy value and create too much variability in the supply chain.

Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers)

7 7 7 189



Lack of formal part evaluation process creates quality cost and disruption problems.


7 7 7 189

Obsolete Inventory

Craig Lawson-Controller (GB); Team:Paul Day-Senior Planner, Andrew Lovegrove-Hardware Engineer, Tammy Allen-Production Coordinator

We have too much obsolete inventory. Reserve is 25% of inventory. Large carrying cost.

Identify and disposition obsolete inventory. Slow the flow, analyze and understand drivers

7 7 7 189

Project SelectionProject SelectionModelModel



Business ExcellenceAccelerated Deployment Plan

Deployment PlanningDeployment Planning

Project KickoffsProject Kickoffs

Green Belt EducationGreen Belt Education

Yellow Belt EducationYellow Belt Education

Champion EducationChampion Education

Process Owner and Process Owner and Awareness EducationAwareness Education

Basic Improvement Basic Improvement Skills EducationSkills Education

Completion of 20Completion of 20--22 22 Projects (DMAIC)Projects (DMAIC)

May June July August May June July August September October NovemberSeptember October November

Review PointsThe Center for Excellence in Operations, Inc.


Communication AwarenessEstablish Recognition of Need•Burning Platforms, Pain Points•Consequences on No Action•Benefits of Change

Create Business Excellence Awareness•Consistent unified Message•Trickle Down, Executives to Operators•Continuous Reminders, Hits•Publicize Successes•“Stay Tuned” (What’s Next)•Internal/External Customer Updates

Use Multiple Media for Different People•Town Meeting format•Email•Mailers in Payroll (Reference Cards)•Storyboards•Video, Signage, Posters •Newsletter•Performance Metrics The Center for Excellence in Operations, Inc.


Performance Measurement: Driving the Right Behaviors to Achieve the Right Desired Results

Balanced Scorecard ApproachUse the “SMART” process

S = SpecificM = MeasurableA = AttainableR = RelevantT = Timely

Walk-Around or Good Day-Bad Day Metrics

Role specific dashboard approach, visual daily metrics (At A Minimum)

Moving toward real time, event-driven metricsSense, Interpret, Decide, Act, MeasureStandardized, Uniform Approach

“You get what you measure”

“Everything begins and ends with performance measurement”

“Be careful what you measure, you might just get it!”

Balanced Scorecard ApproachUse the “SMART” process

S = SpecificM = MeasurableA = AttainableR = RelevantT = Timely

Walk-Around or Good Day-Bad Day Metrics

Role specific dashboard approach, visual daily metrics (At A Minimum)

Moving toward real time, event-driven metricsSense, Interpret, Decide, Act, MeasureStandardized, Uniform Approach

“You get what you measure”

“Everything begins and ends with performance measurement”

“Be careful what you measure, you might just get it!”



Kaizen vs. Lean vs. Six Sigma

KaizenKaizen

Quick Strike1-5 Day Effort

Process MappingCause & Effect

Basic “B&T” Tools

LeanLean

One Piece FlowValue Stream Mapping

Visual Controls, 5SPull Systems

KanbanSet-Up Reduction

TPM

Six SigmaSix Sigma

DMAIC, DMADV ProcessesStatistical Tools

VariationPFMEA, Cp & Cpk

Gage R&RANOVA, Hypothesis TestsDOE, Process Optimization

Simple Tactical FocusObvious “No Brainer” Fixes

ContainmentPlug Holes in Dike



Waste, Non Value-AddedSpeed, Cycle Time

StandardizationInventory Performance

LogisticsCost Reduction




Variation ReductionComplex ProblemsProcess Capability

Defection PreventionStability, Predictability

Design, Process Excellence




KnowledgeOf Tools

Focus ofImprovement

KnowledgeKnowledgeOf ToolsOf Tools

Focus ofFocus ofImprovementImprovement

Teaming and Employee InvolvementTeaming and Employee InvolvementTeaming and Employee Involvement

Closed-LoopPerformance

ClosedClosed--LoopLoopPerformancePerformance

Leadership, Recognition of Need, InnovationLeadership, Recognition of Need, InnovationLeadership, Recognition of Need, Innovation

ERP, Digitization, & Other Enabling TechnologiesERP, Digitization, & Other Enabling Technologies

Spectrum of Total Improvement Opportunities



Kaizen vs. Lean vs. Six Sigma

Let the Improvement Opportunity drive you to the right methodologies and tools

Simple ImprovementsSimple Improvements Complex ImprovementsComplex Improvements

Deployment of Deployment of the right the right

methodologies methodologies and tools is and tools is driven by driven by

process/problem process/problem complexity

Lean?Lean? Six Sigma?Six Sigma?Kaizen?Kaizen?

KaizenKaizen

Quick Strike1-5 Day Effort

Process MappingCause & Effect

Basic “B&T” Tools

LeanLean

One Piece FlowValue Stream Mapping

Visual Controls, 5SPull Systems

KanbanSet-Up Reduction

TPM

Six SigmaSix Sigma

DMAIC, DMADV ProcessesStatistical Tools

VariationPFMEA, Cp & Cpk

Gage R&RANOVA, Hypothesis TestsDOE, Process Optimization

















KnowledgeOf Tools

Focus ofImprovement

KnowledgeKnowledgeOf ToolsOf Tools

Focus ofFocus ofImprovementImprovement

Teaming and Employee InvolvementTeaming and Employee InvolvementTeaming and Employee Involvement

Closed-LoopPerformance

ClosedClosed--LoopLoopPerformancePerformance

Leadership, Recognition of Need, InnovationLeadership, Recognition of Need, InnovationLeadership, Recognition of Need, Innovation

ERP, Digitization, & Other Enabling TechnologiesERP, Digitization, & Other Enabling Technologies

Spectrum of Total Improvement Opportunities

complexity



DMAIC: The Common Language of Improvement

Stop feeding your organization 6 flavors of the same thing – It confuses people.

Stick to DMAIC as the common structured language of improvement.

Consistency of the approach is critical to success.

Integrate Kaizen, Lean, and Six Sigma – Deploy the right tools to the highest impact opportunities.

Deliverable Tool In Process Complete

66 σσ Project StatusProject StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.

DEFINEDEFINE ANALYZEANALYZE IMPROVEIMPROVE CONTROLCONTROLMEASUREMEASURE

Problem DefinitionProblem DefinitionObjectivesObjectivesScopeScopeBoundariesBoundariesPreliminary AnalysisPreliminary AnalysisInitial BenefitsInitial Benefits

CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceProcess MapProcess MapFishbone DiagramFishbone DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK

DFMEA/PFMEADFMEA/PFMEASampling PlanSampling PlanInitial Data CollectionInitial Data CollectionBasicStatsBasicStatsBox, Dot PlotsBox, Dot PlotsCausal Causal ParetosParetosConfidence IntervalsConfidence IntervalsTT--teststestsANOVAANOVARevised ObjectivesRevised ObjectivesUpdate Process Map,Update Process Map,PFMEA, & FishbonePFMEA, & FishboneRevise Project PlanRevise Project PlanContainment ActionsContainment Actions

Screen ExperimentsScreen ExperimentsShaninShanin, Multi, Multi--VariVariHypothesis TestsHypothesis TestsRegression, CorrelationRegression, CorrelationDOE DesignDOE DesignDOE ExperimentsDOE ExperimentsMathematical ModelsMathematical ModelsRecommendationsRecommendationsDocumentationDocumentationEducationEducationImplementation PlansImplementation Plans

DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poke--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff

PROJECT INFORMATIONProject #

Project Name

Objective:

COPQ - Internal: -$ COPQ - External: -$

Annual Cost Savings -$

ATTACHMENTS

Problem Statement

Baseline Performance

Project Objective

Project Scope

Deliverable(s)

Financial Benefits


Project StatusKaizen Project StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.



CTQsCTQs, FDM, FDMKPIVsKPIVs, , KPOVsKPOVsUpdated ObjectivesUpdated ObjectivesQuantified ProblemQuantified ProblemImprovement GoalsImprovement GoalsProject TeamProject TeamProject Plan, GanttProject Plan, GanttBaseline PerformanceBaseline PerformanceValue Stream MapFishbone/CED DiagramFishbone/CED DiagramCp & Cp & CpkCpkGage R&R, MSA OKGage R&R, MSA OK



DOEDOEEVOP, RSMEVOP, RSMImplement ChangesImplement ChangesReplication ExperimentsReplication ExperimentsHandHand--Off PlanOff PlanLean, 5s, PokeLean, 5s, Poka--YokesYokesUpdate Update AllAll DocumentationDocumentationEducationEducationMonitor ImprovementMonitor ImprovementDocument ImprovementDocument ImprovementSummarize BenefitsSummarize BenefitsDefine Next ProjectDefine Next ProjectManagement PresentationManagement PresentationProcess Owner HandoffProcess Owner Handoff


Project Name

Objective:



ATTACHMENTS

Problem Statement


Project Objective

Project Scope

Deliverable(s)

Financial Benefits

Project CharterSIPOC Diagram










Project Name

Objective:



ATTACHMENTS

Problem Statement


Project Objective

Project Scope

Deliverable(s)

Financial Benefits


Project StatusLean Project StatusThe Center for Excellence in Operations, Inc.The Center for Excellence in Operations, Inc.








Project Name

Objective:



ATTACHMENTS

Problem Statement


Project Objective

Project Scope

Deliverable(s)

Financial Benefits











Project Name

Objective:



ATTACHMENTS

Problem Statement


Project Objective

Project Scope

Deliverable(s)

Financial Benefits










Project Name

Objective:



ATTACHMENTS

Problem Statement


Project Objective

Project Scope

Deliverable(s)

Financial Benefits




DMAIC Problem-Solving Methodology

Define Measure Analyze Improve ControlWhat is the problem?

What is your project objective?

What is the improvement goal?

What are the benefits?

What are your next steps?

What is the current or baseline performance?

Have you confirmed the problem with data and facts?

What are the financial benefits of changing?

What are the major root causes of the problem?

What are the options for change?

What is the best option?

What is the schedule for implementing the change?

Are there any barriers to your plans for change?

What metric(s) will you monitor to measure success?

Do you have buy-in and support from all parties?

How will you measure results after change?

Does the change solve your problem?

Are other actions necessary?

How will you sustain the improvement?

CRITICAL SUCCESS FACTORCRITICAL SUCCESS FACTOR

Common Common ““thoughtwarethoughtware”” for Kaizen, Lean, and Six Sigmafor Kaizen, Lean, and Six Sigma

Standardized Improvement Structure and DisciplineStandardized Improvement Structure and Discipline



Business ExcellenceContinual Improvement Management Process

Project GB Candidate Problem Statement Objectives Baseline Performance

Improvement Goals Benefits Team Annual Savings



Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds current fill rate 100% fill rate

No lost sales, no extra freight charges increase customer

satisfaction and sales

Improve Market/Product Strategy process

Rob UrryOur Market strategy and product definition process will not scale with our current structure

Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs

Increased revenue from new products

Better alignment and innovation between customer/market needs and features/offerings


Dan Markosian


Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the month. Consider selected rate-based scheduling and point-of-use (POU) stocking to reduce kitting

Actual production compared to demand plan and customer order fill rate

Actual production 98% of MPS

Reduction in cycle times, increased flexibility and

responsiveness to change, less reschedules and firefighting



Sr. Director of Planning and

Materials


Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock). Current material

shortages

On-time availability of material. 100% PO confirmation. 100% exception acknowledgement, 0% PO discrepancies. Advance shipping notices.

Reduction in stockouts


Rick LambournePoor performing suppliers destroy value and create too much variability in the supply chain.

Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers) Current supplier

performance

Fix or phase out C & D suppliers. Reduce the number of vendors.



Alan Ottley

Lack of formal part evaluation process creates quality cost and disruption problems. Making specs artificially tight because we don't design to tolerances that our suppliers can meet. The working range of the designs are tighter than supplier specs..


Time spent bandaiding things due to out of spec tolerances

100% of new parts subject to a formal evaluation and approval process. No non-approved parts are selected when a preferred alternative exists

Improved component quality and reliability, reduction in the number of component part numbers and associated

overhead cost



John Hanson



Current new product release to Mfg. vs. business plan

On-time and on-budget delivery of new products.

Significant reduction in time-to-market and incremental

revenue/market share, increased growth through new product

leadership

John Hanson-VP Engineering Musical Instruments (GB); Team: Rich Ireland- Director of Lexicon Pro Engineering Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer

Strategic Project OpportunitiesDouble Revenue

Every 5 Years

Become Audio/Video

COE for H-Pro

Dominate Guitar Signal

Processing Market

Aggregate Rank

Project GB Candidate Problem Statement Objectives 10 9 8

Improve market/products strategy process Rob Urry-President (GB); Team:

Our market strategy and product definition process will not scale with our current structure

Develop a marketing structure that supports our vertical market strategy and aligns our product development strategy to market needs 10 9 9 253


Bill Paulos-Assistant Controller (GB); Team: Georgeann Nichols-Inventory Analyst, Jeff Thompson-Cost Accounting Manager, Richard Rhees-IT

Currently we are doing reactive cycle counting, putting out fires, not using an organized process by cycle counting system generated cycle counts.

Audit the process anf fix any gaps

9 9 9 243



Have products available to fullfill contractor orders within 24 hours from receiving the order given there are no credit holds

9 9 9 243


Roger Johnsen-Senior Director Eng Services (GB); Team: Ernie Morales – Regulatory Engineer, Mark Kohagen – Hardware Engineer, Doug Robinson – Mechanical Designer

This causes quality issues, returns and bad customer experience.

Define product verification testing process for electical and mechanical

9 10 7 236


John Hanson-VP Engineering Musical Instruments (GB); Team: Paul Howard-Engineering Manager, Jason Lamb-Marketing Manager, Ray Larsen-Mfg Engineer



9 8 8 226


Paul Marconi-Director of Mfg Eng (GB); Team:Steve Young-Mfg Eng Mgr, David Bybee-CAD/PCB Designer, Gary Stout-Mechanical Design Engineer

Designs with high variability create scrap, rework, inefficiency and high warranty costs.

Robust designs (guidelines) that fit our manufacturing process. Pilot Valor and Boothroyd-dewhurst tools. Post-mortem failure review.

8 9 8 225


Lynn Alley-VP Pro Eng (GB); Team: Rick Krieifeldt-VP SDIG

Need a consistent and docummented source control methodology. Currently we only have a source code control system so no basis for tracking defect rates or other quality metrics (bug tracking). Need better change management, configuration management. Software is released with "unshippable" software bugs.

Improve the quality of software releases. Ability to incorporate industry standard source control and bug tracking tools

8 9 7 217


Dave Fata- Director of Sales Operations (GB); Team: Jim Ure-Technical Suppoort Manager, Rick Tanga-Service/Repair Manager, John Duffin-Director of Engineering, Jeff Percival-Manufacturing Engineering

Unreliable / Outdated products / old releases of software gets shipped to customers, which gives us perception of poor quality. RTS inventory dollars are too high. Returned inventory in a non-nettable location for months.

100% certainty of quality for B-Stock in inventory

8 10 4 202




Synchronize the MPS and the planning parameters to the SOP. Put a process in place that monitors alignment of actual current month orders to MPS and allows to review and to adjust if possible during the 8 8 6 200

Material Planning Process New guy


Reduce shortages,and improve current process to reduce overhead to manage it. Optimize our planning parameters (lot size, lead times, safety stock).

8 8 6 200

Part Number Rationalition and reduction Jon Duffin

Preferred parts have not been identified and promoted. Identical parts are listed under duplicate part numbers (especially for BSS products) resulting in purchasing and inventory inefficiencies.

Reduce number of parts down to the preferred componets. Use the same part across brands

9 5 7 191



Poor performing suppliers destroy value and create too much variability in the supply chain.

Improve how we select, measure and develop the performance of our suppliers. (Development and corrective actions for A,B,C,D suppliers)

7 7 7 189



Lack of formal part evaluation process creates quality cost and disruption problems.


7 7 7 189

Obsolete Inventory

Craig Lawson-Controller (GB); Team:Paul Day-Senior Planner, Andrew Lovegrove-Hardware Engineer, Tammy Allen-Production Coordinator

We have too much obsolete inventory. Reserve is 25% of inventory. Large carrying cost.

Identify and disposition obsolete inventory. Slow the flow, analyze and understand drivers

7 7 7 189

Business Excellence Steering Committee

Project Selection Model

BusinessExcellenceProjectExecution

“The Project Hopper”

BusinessPerformanceMetrics

EmployeeInvolvement



The Business Excellence CultureThe Business Excellence Culture

Without data, you are just another Without data, you are just another person with an opinion.person with an opinion.

• Unless you are placed at a level at which your opinion becomes data and facts.

• If you are fortunate enough to be at this level and you lead your organization this way, you and your people make many incorrect decisions without data and facts.

• EI is experiencing this “first hand” through their Business Excellence deployment.

• “You don’t know what you don’t know.”


Sponsored by

Implementing Lean/Six Sigma in Complex Industries

A Case Study at Endicott Interconnect Technologies, Inc.

Terence T. Burton, President


Terence T. Burton, PresidentBrad VanBrunt, Vice President , Quality

Endicott, Ney YorkBedford, New Hampshire

Question and Answer Session

Implementing Lean/Six Sigma in Complex Industries: A Case Study at Endicott

Interconnect Technologies, Inc.

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