Kaizen - Strategy For Performance Excellence

A STRATEGY FOR
PERFORMANCE
EXCELLENCE
1
2000, QualityToolBox.com, LLC, all rights reserved
Performance Excellence Series
Training Module Elements
Executive Overview Knowledge Tools Workbook

Breakthrough
Lecture notes Lecture notes
Participant manual
2
Table of Contents
Executive Overview
Session 1.0 Introduction…………………………..3

Session 2.0 Wastes elimination…………………. .9
Session 3.0 Kaizen Methodology………………..15
Session 4.0 Integrated Improvement Strategy…...28
Session 5.0 Kaizen Project Examples……………32
3
Model: Performance Excellence
Deliverable Integration of Lean Robust Processes
Through Elimination of the Nine Wastes of Processes: Over production, Delays, Transportation, Process, Inventories, Motions,
Defective Products, Untapped Resources, Mis-used Resources
Required Information Management Characteristic Value

Individual Behavior Motivation Visionary 1st Priority People
Organization Evolution Cooperation & Collaboration Optimize Profits/EVA
Group Dynamics Focus & Perseverance Continuous Improvement
Market Requirements Lean - Robust Process
Feedback
Parameters
Core Business Processes
Inputs Output Service > 99%
Demand Management
Forecasting
1. Customer Supply Management Order Services Delivery:
*Wants • Procurement • order attainment
• Minimal shipment/order
• order entry
*Needs • Inventory/Material • On - time What is needed,
Management in Quantity that is
2. Suppliers Costs: needed at the
Raw Material • Supplier Management Operations Management • low cost associated time it is needed
Sub-Assemblies with customer value focus at a competitive
Products Quality cost
Information Technology
MRO Operational Management • Low to zero defects +
3. Customer Returns Marketing/Sales Finance Engineering Management • Service beyond shipment Flexibility,
Signature Service Quality Management • Feedback Responsiveness
Treasury
Human Resources towards
Non-Signature Service Accounting
Manufacturing Order Fulfillment customer’s wants
Production and needs
Approach: Kaizen Six Sigma (6δ)

Lean Site Manufacturing Total Productive Maintenance Mistake- Proofing (Poka-Yoke) Failure Mode Effects Analysis Statistical Process Control
Kanban Visual Management 5S Pull Systems Cellular Manufacturing Priority Planning Statistical Problem Solving
Fishbone Diagram Design of Experiments
Spaghetti Chart Takt Time Advanced Product Quality Planning Fishbone Pareto Histogram Mistake Proofing
Process Capability Analysis
Production Part Approval Process Multi-Generation Product Planning Quintus Affinity Diagram 5W’s, 2H’s
Quick Changeover (S.M.E.D) Product Creation Process Standard Work Quality Cost & Delivery Regression Analysis Process Mapping Pareto Analysis MSA
4
Why Kaizen CPI
Process
Improvement
• Data Driven Methodology to Magnify Impact of
Project
Implemented Process Improvement
Savings
• Apply Control Techniques to Eliminate Erosion of

Improvements
• Proceduralize/Standardize Improvements for
Maintenance of
Process
Performance
Improved Maintenance of Critical Process Parameters
Time
CPI Project
Savings CPI Projects Emphasize
Control and Long Term
Maintenance
Kaizen Time Kaizen
Savings
• Use Small Teams to Optimize Process Performance
CPI
by Implementing Incremental Change
• Apply Intellectual Capital of Team Members Intimate
with Process
Kaizen Projects
Emphasize Incremental
Improvements Time
5
Expanding the Strategy
Performance Excellence Obtained
by Continuous Improvement
Improvement Tools
CPI Kaizen
• Disciplined Methodology • Philosophical Approach
• Technical Approach • Common Sense Approach
(Quantitative) (Qualitative)
• Data Driven - Statistical • Data Driven - Observation
• Operational Focus • Customer Focus (Takt time)
• Reduce Variation • Waste Elimination
• Focus on Large Impact • Incremental Change
• Larger/Longer Projects • Smaller/Shorter Projects
Complimentary Tools Driving Continuous Improvement
6
Comparative Analysis
6 Improvement Methodologies Kaizen/Lean
• Similar in Structure
Measure • Improvements measured against established Evaluate
- Data Collection process - Baseline Process Performance
- Determine Process Potential / Goals • Team oriented - Establish Target
Evaluate Decide
• Different methods used to determine
- Root Cause / Vital Few -Compare solutions
improvement opportunities
- Statistical Analysis - Choose
Improve & Verify • Similar improvement tools Act

- Implement Improvement • Measure effectiveness of improvements -Communicate
- Validate Improvement • Maintain new performance level - Implement improvement
• Standardize & Proceduralize - Control
Standardize
- Standardize / Leverage Measure
- SPC - Validate improvement
- Update Procedures - Standardize
Focus - Update Procedures
- Reduce Process Variation Results
Focus
- Identify Critical Cause and Focus • More Efficient Processes
- Eliminate Waste 5 s
Resources for Maximum Impact - Seek Incremental Process Changes
Comparison
Summary • Both are Effective Improvement Mechanisms Summary
- Technical Approach based on • CPI/6s best applied to large complex - Common Sense Approach based on
Statistical Analysis problems Observation
- Requires Significant Data Collection • Kaizen/Lean best applied to achieve - Applicable to all types of processes
- Best applied to Manufacturing incremental changes and eliminate wastes. - Defined improvement strategy
Processes - Typical Projects 1 week
- Typical Projects 1-3 Months
7
Tool Kit Comparison
Major CPI
Tools (6 ) Kaizen Lean Description
Cp/Cpk 4 Process capability assessment

DOE 4 Design of experiments
SPC 4 Process control based on statistics and data analysis
FMEA 4 Risk assessment tool
Regression 4 Correlate effect one variable has on another
Process Map 4 4 4 Map process steps to communicate and identify opportunities
5 whys /2 hows 4 4 4 Determination
methods for root cause discovery
Pareto 4 4 4 Column chart ranking items highest to lowest
Fishbone 4 4 4 Cause / Effect Diagram
5S 4 4 Elimination waste
Visual Mgmt 4 4 4 Emphasis on visual techniques to manage process
Poka-Yoke 4 4 Error proofing techniques
Spaghetti Chart 4 4
Kanban 4 Material storage technique used to control process
4
Takt Time 4 4 Determine pace or beat of a process
Std Work 4 4 Evaluate tasks done during a process
SMED 4 4 Single minute exchange of dies - Quick machine set up
TPM 4 4 Integrate maintenance strategy with process
Cellular Flow 4 4 Reduce inventory & cycle time thru process layout and pull
production
Expand Process Improvement techniques
Program to Utilize Kaizen Tool Kit
8
Performance Excellence:
Expanding the Strategy through Kaizen
Introduction
Wastes elimination
Kaizen Methodology
Integrated Improvement Strategy
Kaizen Project Examples
9
Continuous Improvement
Is the continuous
elimination of waste
10
What Does Kaizen Mean?
KAI + ZEN
To modify, to change Think, make good, make better
= KAIZEN
Make it easier by studying it, and making the improvement through
elimination of waste.
11
What is Waste?
Everything we make that
costs something without
adding value to the product
Our objective > Value added = Maximum

Non-Value Added = Minimum
12
The Nine types of waste
9  Overproduction
Wastes  Delays (waiting time)
 Transportation
 Process
 Inventories
 Motions
 Defective products
 Untapped resources
 Misused resources
13
Elimination of Wastes and Continuous
Improvement
The Approach The Means The Strategy

 Elimination of  One piece flow  Lead-time
wastes  SMED
 Visual Controls
 Costs
 KAIZEN  Workplace  Quality the first
Organization time
 Kanban
 Continuous
 Standard Work
Improvement
 Process Control
 Total Productive
Maintenance
 Poka-Yoke
14
Introduction
Wastes elimination
Kaizen Methodology
15
Kaizen Methodology
 Kaizen improvement
 The mandate
 One-piece flow
 SMED
 Visual controls
 Kanban
 Workplace organization
 Standard work
 Quality every time
 Total productive maintenance
16
Kaizen Improvement is a Team
 Multi-disciplinary
 Specific mandate
 Short delays
 Responsible teams
17
Kaizen Improvement
is composed of 4 steps
 To Evaluate E
 To Decide D
 To Act A
 To Measure M
18
Kaizen Improvement
is continuous improvement
19
Kaizen Improvement
is NOW !!!
20
To Evaluate
You can only improve things

you know well.
21
To Evaluate
Tools for analysis
E •The 5 whys : search for root cause
D •Matrix
•Pareto diagram
A
•Fishbone diagram
M
•Distribution histogram
•Check sheet
•etc.
22
To Decide
E
D The value of a decision is no greater than the
quality of the analysis.
A
M
Compare all solutions;
cost, feasibility, efficiency, etc.
Choose
Establish measurable objectives
23
To Act
E
D
A Communicate
M operators,
other employees from the area
other people servicing the area
Implement decisions
Control their execution
24
To Measure
E
D
A
M Compare the results in relation
to the objectives.
Resume EDAM
25
Become familiar with the Mandate
Draft the plan of attack

Current situation
Desired situation
Complete the observations

Current situation
•Matrix
•Setups video
•Etc...
26
Implement one-piece flow
Analyze
•Identify the products
•Identify the customers
•Understand and describe the Processes
–part/process matrix
–Flow diagram
–analysis of the Process Flow
–Spaghetti diagrams
–TAKT time
27
Introduction
Wastes elimination
Kaizen Methodology
28
Complimentary Continuous Improvement Approaches
6 Sigma Lean Site
Kaizen
29
Performance Excellence Manufacturing
Category Type of Waste Methods Focus Points Principle Desired
of Waste Waste Reduction Worksheets Results
Approach
People Layout Standard Work Sheet
Labeling (SWS) High
Processing Standard Work Tools/parts Time Observation efficiency
arrangement Form and output
Workplace Workplace Work Instructions Standard Work work areas
Motion Management Organization Efficiency Combination Sheet that are safe
Skills training (SWCS)
Kaizen TAKT time Work Load Balancing
Waiting Sheet (WLBS)
Shift meetings
cell/area teams Work Load Balancing
Visual displays Sheet
Kaizen Target Sheet
Kaizen Action Sheet
Quantity Kanban Work balance SWS
Inventory WIP location & SWCS What You
Just in Time Leveling amount WLBS Need
Making too Kanban types Kanbans
much SMED Lot sizes Production Capacity When You
Changeover analysis by Process Need It
Moving Preventive TPM analysis TPM Scheduling
things Maintenance Sheet
Quality Automated SWCS
Detection assistance Error Proofing Action
Fixing defects Error Fixture Sheet Desired
Proofing Warning modifications Error Proofing “To Quality
Successive checks Do” List
Prediction Photocells, Skills Training Matrix
templates, etc.
Prevention Cross training
30
1997 Plant of the Year
Industry Week
Sales per employee Labor costs 100% of hourly

increased 155% reduced 75% employees on self
directed work
teams
Inventory reduced 515 Inventory 100% customer
by 70% turns per year retention rate
Annual labor 1% worker ROA increased to

turnover less than absentee rate 55%
1%
Productivity Worker developed 0.4 Lost workday
increased by 208% HR policies rate per 100
employees
On-time or free Scrap and rework Warranty costs of
delivery guarantee decreased by 65% 0.36 percent of
sales
31
Introduction
Wastes elimination
Kaizen Methodology
32
Kaizen/CPI
A STRATEGY FOR PERFORMANCE
EXCELLENCE
Kaizen Project: Corporate Quality

ISO Hardcopy Procedures Elimination
an Office Process Improvement Example
33
Kaizen Project: ISO Hardcopy Procedures Elimination
an Office Process Example
Background:
ISO Policy and Procedures are currently on the company web site.
Hardcopy sets of policy and procedures are also mailed to 95 remote
facilities and distributed to 40 locations within Corporate
Headquarters.
Kaizen Project:
Eliminate hardcopy distribution of policy and procedure manuals for

all corporate headquarters locations and all other facilities having
company web site access.
34
Current Process:
1. Outside vendor prints 135 sets of

ISO Policy & Procedures manuals: $3,000
2. 95 sets of manuals mailed (Fed Ex) to facilities

beyond Corporate Headquarters. $18 /set x 95 sets = 1,710
$4,710
updated and distributed twice per year x 2

$9,420
35
Action Plan:
1. Survey all corporate facilities to determine those having Web site

access. (1/7/00)
2. Remove from hardcopy distribution list those facilities having web

site access. (1/10/00)
3. E-mail bulletin all facilities having web site access of

discontinuance of hardcopy manuals distribution, and to use web
site instead. (prior to planned March, 2000 distribution)
36
Improved Process:
1. Outside vendor prints 40 sets of
ISO Policy & Procedures manuals: $889
(for facilities not able to access web site procedures
and eight extra sets)
2. 32 sets of manuals mailed (Fed Ex) to facilities
beyond Corporate Headquarters. $18 /set x 32 sets = 576
$1,465
updated twice per year x 2 = $2,930
(current cost) $9, 420 - (improved cost) $2,930
Kaizen project annual cost savings: = $6,490
37
Ongoing Continuous Improvement
Action Plan:
1. Establish timetable for implementation of website access for

facilities not presently able to view electronic procedures. (TBD)
2. Remove from hardcopy distribution list these facilities once web

site access is established. (TBD)
3. E-mail bulletin latest facilities having web site access of

discontinuance of hardcopy manuals distribution, and to use web
site instead. (TBD)
38
Kaizen/CPI
A STRATEGY FOR PERFORMANCE
EXCELLENCE
Kaizen Project:
Color Key - Optimize Press Capability
a Shopfloor Process Improvement example
39
Color Key - Optimize Press Capability
Dec. 6 - 10, 1999
 Team members:  Objectives:
 Herkie Hill (Team Leader)  Reduce WIP by 70%
 Derick Fultz (Sub- team leader)  Improve throughput by 40%
 Lee Salsberry  Reduce backlog by 50%
 Carolyn Oliver  Reduce leadtime by 5 days
 Phylis Dancy  Identify (5) 5S improvements
 Marvin Bell  Train operators on all shifts
 Lueontine Smith  Work hard and have fun
 John Whittington
 Dave Hensley (Consultant)
 Hosea Foster
40
Kaizen Project: Color Key Press Optimization
a Manufacturing Process Example
Background
Color Key area currently has 14 days of WIP in front of the 4
press operations. The presses are operated on 3 shifts, 5 days per week. The lead
time for these products is approximately 4 weeks.
Kaizen Project
Optimize press capability and reduce lead time by 5 days.
41
Current Process of S. Tai Press:
1. Current production average = 118 pcs/hr for a cost of .09 cents per piece
2. Total cost anualized per customer demand = $129,168
Gross Vs Realization Capacity Analysis

S. Tai Dec 99
66
15
60 Tool Change
210
90 Clean Up
Breaks
Lunch
Run Time
990 Unaccounted Time
42
Action plan:
1. Improve set up reduction techniques

2. Introduce short cycle scheduling with 2 day window
3. Locate production management board by press
4. Organize WIP by tube size
43
SET UP TIMES
Machine: S. Tai Start Date: 12/8
Target: 25 % Improvement
12
11:38
Minutes
adjustment 27% Improvement

8:30
8
8:23 adjustment
remove
4 & install established external check list 5:04
tooling & created tooling cart for preset up remove
& install
tooling
1 2
Observation Number
44
Improved Process of S. Tai Press:
1. Improved production average = 179 pcs/hr for a cost of .06 cents per piece
2. Total anualized per customer demand = $86,112
WIP reduced .5 day

Kaizen Project annual cost savings : = $43,056
S. TAI Realization Capacity Analysis

24 Jan 00
15
132 60
90 Tool Change
Clean Up
Breaks
Lunch
Run Time
Unaccounted Time
1119
45
Ongoing Continuous Improvement
Action Plan
:
1. Create daily review panel of pacer board to help resolve daily problems
in a timely manner. Include maintenance, planning, supervisors and KPO. (1/24)
2. Install 2nd counter on press to help maintain daily output numbers. (12/31)
3. Locate rack near press to organize parts by tube size. (1/14)
4. Add yellow and red lights to press for visual notice of downtime. (12/14)
5. Design & implement 3 move die exchange. (1/31)
46
A Key Strategy In Pursuit
Of World Class
Performance
47

Kaizen - Strategy For Performance Excellence

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A STRATEGY FOR

Executive Overview Knowledge Tools Workbook

Lecture notes Lecture notes

Session 1.0 Introduction…………………………..3

Required Information Management Characteristic Value

Approach: Kaizen Six Sigma (6δ)

• Apply Control Techniques to Eliminate Erosion of

Improved Maintenance of Critical Process Parameters

Kaizen Time Kaizen

Improve & Verify • Similar improvement tools Act

Cp/Cpk 4 Process capability assessment

Our objective > Value added = Maximum

The Approach The Means The Strategy

You can only improve things

Draft the plan of attack

Complete the observations

6 Sigma Lean Site

Sales per employee Labor costs 100% of hourly

Annual labor 1% worker ROA increased to

Kaizen Project: Corporate Quality

an Office Process Improvement Example

Eliminate hardcopy distribution of policy and procedure manuals for

1. Outside vendor prints 135 sets of

2. 95 sets of manuals mailed (Fed Ex) to facilities

updated and distributed twice per year x 2

1. Survey all corporate facilities to determine those having Web site

2. Remove from hardcopy distribution list those facilities having web

3. E-mail bulletin all facilities having web site access of

Kaizen project annual cost savings: = $6,490

1. Establish timetable for implementation of website access for

2. Remove from hardcopy distribution list these facilities once web

3. E-mail bulletin latest facilities having web site access of

a Shopfloor Process Improvement example

a Manufacturing Process Example

Optimize press capability and reduce lead time by 5 days.

2. Total cost anualized per customer demand = $129,168

Gross Vs Realization Capacity Analysis

1. Improve set up reduction techniques

adjustment 27% Improvement

2. Total anualized per customer demand = $86,112

WIP reduced .5 day

S. TAI Realization Capacity Analysis

Ongoing Continuous Improvement

3. Locate rack near press to organize parts by tube size. (1/14)

5. Design & implement 3 move die exchange. (1/31)

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