– Reputational Loss
This is a consequence of the previous paragraph. If due to suppliers will disrupt the technological processes, customers will not be able to receive their goods on time. Additionally, this is a reputation disaster.
– High Costs
If you introduce lean production completely, it may be necessary to reconstruct facilities, replace equipment, which is very expensive. In addition, the introduction of all rituals and tools will require long training of staff. Small and medium-sized businesses can end up paying off all these costs for a very long time.
– Employee resistance
The introduction of lean manufacturing, as well as digitalization in general, mainly causes stress and stiff resistance among staff. We went through the first book.
6 sigma
Six Sigma is the American approach to production management, where the main goal is to reduce the number of rejects to 3—4 units per 1 million units of finished products.
This tool is based on the processing of statistical data and the work with measurable indicators, which is generally characteristic of the American management culture. Here they say: «the right process gives the right results».
The main effect of using 6 sigma is the ability to distinguish the boundaries of the managed process. And in the case of detection of the problem to understand where is a system error and where is a private case, which allows not to treat force majeure excessive measures for the whole system. Just because one employee shows up at lunch doesn’t mean everyone has to be fined five minutes late. If there is one failure per million hours of work in an IT solution, it is not advisable to reassemble the whole system. Additionally, it is also a tool that allows us to identify, analyse and implement beneficial developments to improve the overall process.
Rule 3 sigma
Therefore, what are the «sigms» about?
Sigma (σ) is the letter of the Greek alphabet, which in mathematics denotes a standard deviation, that is, when indicators do not conform to this deviation, they are an anomaly.
Rule 3 Sigma states (in simplified terms): Virtually all values and results that can be considered normal for this process lie within a range of +– 3 sigma of the mean. If you plunge into the calculations, it turns out that all normal for the process results will be in these 3 sighs with a probability of 99.73%.
Algorithm of calculation 6 sigma
– Add all measured values and calculate the arithmetic mean.
– We consider the difference between the maximum and minimum values, for example, for a month.
– We consider the same difference for another, for example, 5 months.
– We calculate the average of this difference for 6 months.
– In Shuhart’s control cards (GOST R 50779.42—99) we find the index d2, and take the value for the sample, in our example it is 6 months, so d2 = 2.534.
– Take our average difference between maximum and minimum and divide by d2.
– We get a sigma.
– From the mean value of paragraph 1, we shall now defer 3 sigma to the right and to the left. We get six sigmas that show the boundaries of our managed process. What’s not inside is the deviations. We investigate the causes and work with them. Additionally, if we don’t like the boundaries of the process, we work systematically.
Of course, in life it is not always necessary to use all tools in full compliance.
Here’s a practical example from my practice.
What is on the input: the table with the data about the drilling of wells. Records in it about two hundred.
Additionally, on the basis of this data, it is necessary to understand what is happening at all? What are the problems? Unfortunately, it is impossible to conduct interviews with people.
Well, let’s go over a simple algorithm.
– Make a small panel in which we consider the duration of key periods.
– We calculate the main indicators.
– Then we build graphs of Pareto (with some clearing of anomalies), see what is the average wait between drilling and development (simple).
– Calculation and construction of the graph 6 sigma (but it is not necessary, all the necessary data is there). Defining the boundaries of a managed process and its current state. We find out whether it is necessary to make adjustments to the process or its complete restructuring?
– We determine the causes of deviations falling outside the boundaries of the process, including using the technique «5 Why». Determine whether processes need to be changed (e.g., procurement of ZIP).
– We also study the reasons for the best examples, determine the possibility of adjusting processes and setting new targets, standards. We also study the situation with the biggest downtimes, see who implemented, what went wrong, why. It is possible that there are the same people, and you need to work locally with them, for example, to teach them.
Yet, what conclusions could be drawn, even without deep calculations?
– According to Pareto’s schedule, we saw that in more than 75% of cases the waiting was within 73 days, and in 85% of cases – up to 154 days. Of course, it is better to calculate the sigma optimally, but in the current version the manageability boundaries of the process are visible. Accordingly, arithmetic averages can be used for the first approximation.
– We have no information about the depth of the wells and cannot assess the efficiency of the working process. However, we can compare the downtime between the end of drilling and the beginning of development. Thus, the average waiting time from the end of drilling to the beginning of development is 76 days. At the same time, the average expected start of development exceeds the average development period by more than 3.5 times and is comparable in time with the entire drilling process. The cumulative expectation loss is 42% of the cycle time from the start of drilling to completion. This generates both lost profits and direct losses.
– The reason is the system problems of the planning process, detailed audit is necessary.
– Possible system limitations:
– system of control and notification of the process stages;
– no system for forecasting the completion of drilling phases;
– lack of regulations and target values for the duration of each phase, notification time, delivery and readiness of the equipment for transition to development.
Here’s how one table can be calculated and learned to reach certain conclusions. As the informal communication showed, they were correct conclusions. However, I have not gone to the further project: the TOPs have been negotiating for almost six months, and in my opinion, if they do not know how to work quickly upstairs, something to change from below is meaningless. Everything comes from the head. In this I am convinced of every project, so I always start working from the first person. First we prepare it, and then we work with the team, only this approach gives results.
Lean Six Sigma
Lean Six Sigma – a hybrid that combines Japanese and American concepts:
– Lean Manufacturing (Lean) – Process Loss Reduction and Acceleration, Standardisation and Continuous Development, Working with People and Thinking;
– 6 sigm (Six Sigma) – Improving product quality and customer loyalty; the basis is information analysis, measurable performance.
In fact, as a basic education engineer, I think the best solutions are hybrids. There are no clean methodologies that are fully applicable to life. It is impossible to use any tool at 100%, it becomes redundant and too expensive pleasure. The calculation of boreholes given above took me one evening. As a result, I got an understanding of the problem. Could you go deeper, spend 2—3 nights on an analyst, but would change from this end result? Unlikely. Additionally, this is already losses in lean production – excessive processing.
Chapter Summary 3
Of course, not all the tools are listed here, and in the same 6 sigm concept you can go deeper to the control cards Shuhart, DMAIC, DMADV, what are the roles of the staff (green, black belts, masters, etc.), and in lean production – SIPOC and Poka-yoke, «House TPS» (tools and principles), but I think it would be a bit much for you, my reader. You’re not an executive, you’re a supervisor. That means that your people need to know the specific tools, and you need to understand how it works to be able to set the right tasks and delegate, control and ask for the result.
