Lean Six Sigma Academy

Mark Graban wrote a relatively simple post a few days ago that has simply BLOWN up with comments.

Mark, if I may be so bold, doesn’t really believe in certifications… especially if the words six sigma are involved!

Me, well I do have certification in six sigma… and am proud of it as I had to work my butt off for it.  And, more importantly, my certification got me interviews for jobs I wouldn’t have ever gotten without the certification.

With this said, I  am always interested in what others – like Mark – have to say on the matter.

So, while I am all about comments here on LSS Academy I’d like to encourage you to visit the Lean Blog and continue the discussion there rather than here.  As of this post there are more than 40 comments!  So please head on over there and keep the discussion going LSS Academy readers!

I recently wrote an article for the iSixSigma magazine focused on the 7 Deadly Wastes.

And as it turns out the good folks over at iSixSigma have been nice enough to allow me to offer this article to LSS Academy readers in PDF form.

So feel free to download the article and read it at your leasure.

Also, if you’d like to subscribe to the iSixSigma magazine and get $10 off the subscription price of $59.95 please follow this link and use the promo code: PromoA.

Please note that this is not an affiliate link meaning I don’t earn anything from this.

Full disclosure: I am on the iSixSigma magazine editorial advisory board… but I’ve long loved this magazine and would highly recommend it even if I weren’t on their board.

Balaji, a reader of LSS Academy, recently sent me the following question/comment via email:

Toyota, GM, and Ford are experts in state of the art assembly technology and in implementing Lean and Six Sigma process improvement methods and so on. Then why have GM & Ford failed? Even Toyota closed its branch production units in Japan? Though I’m also one Lean Six Sigma Black Belt I too lost the confidence that Six Sigma or Lean or TPS can’t do anything in this recession period.

Regards,
Balaji.

Correcting Misconceptions

Before getting started, let me first say that I’ve done some research and don’t believe Toyota has closed any production units in Japan. If I am wrong here feel free to comment below with a correction.

Also, before the lean purists get too excited Toyota does not practice “six sigma” the same way companies like GE and Allied Signal do.

With all of this said, Toyota is still struggling these days just like many other companies.

The company is still deep in the red, logging a net loss of 77.82 billion yen (US$817 million) for the April-June quarter.

How can this be?

So the million dollar question is how did this happen? How could the mighty Toyota, the company that “changed the world” with their production and management system, lose money like this?

The Reality of Running a Business

Well, here’s my take on it.

No matter how amazing your production or management systems are or how well you respect people or how conscious you are of the environment… if no one is buying your product or service problems are coming.

You don’t need to be a CPA to figure this out… if your expenses are greater than your sales you’re in for some trouble.

And it goes without saying that people haven’t been buying many automobiles the past few quarters and no one, including Toyota, saw it coming. Perhaps they should have… but they didn’t.

Now, to be fair, Toyota has weathered this storm about as well as any automotive company SINCE they have an amazing production and management system… but they are not infallible. Far from it.

Rise Up Continuous Improvement Practitioners!

So does this mean lean and six sigma practitioners like Balaji (or you and me) should pack up ship and run for the hills until the orders start flooding in again?

Of course not.

Your company needs you now more than ever. Specifically, they need you to:

• Attack the waste that is sucking operating income down the drain.
• Find better ways to manage the inventory that is tying up much needed cash.
• Reduce lead-times that will make you more competitive.
• Partner with your sales and marketing team to see how you can apply lean and six sigma principles.
• Stay positive while working to make things better EACH AND EVERY day even though you might feel like your boss is more focused on other things (like how to make payroll this week).

A “W” Recovery?

This market will eventually turn around. However, I’ve heard some economists claim that we might follow a “W” recovery pattern instead of the more common “V” recovery pattern we often see after recessions.

In other words, things could look better (like they seem to be now?) only to tank once more before the final recovery takes place.

But no matter how things recover one thing is for sure… the companies that work to become stronger during this recession by investing in continuous improvement will be the new winners of the post recession period. This I’m sure of.

What do you think?

Do you agree with me? Do you have any other thoughts on why lean exemplars like Toyota are losing money? Do you agree that investing in continuous improvement is more important than ever in these tough economic times?

If you enjoy statistics this is the perfect article for you! But even if hearing the words hypergeometric distribution makes you want to yack all over the floor at least give this article a quick skim as it could prove useful for you someday… especially if you ship a product or service to a customer!

The Scene

To help me with this article I’m going to make up a completely fabricated story.

Let’s say a producer of widgets (replace widgets with the product your company produces if you wish) recently shipped 1,000 units to their customer.

Let’s also say that, prior to shipping these units, the producer randomly inspected 100 widgets.

After inspection, the producer ships the 1,000 widgets to their customer, collects payment, and moves on to the next order.

The Angry Customer

A few weeks later the producer gets a phone call from their customer – who is less than pleased to say the least – explaining that they’ve discovered 4 defective widgets and they hadn’t even looked at all the widgets!

The customer goes on to say that they are sending all 1,000 widgets back and they are giving the producer 10 days to make things right.

Calling All Inspectors

Once the widgets arrive back in the plant a team quickly inspects all 1,000 widgets. Once they are complete they realize that 36 of the widgets were actually defective!

Identified Root Cause

Luckily, the root cause of the defective units was quickly identified and an immediate countermeasure was put into place ensuring this problem would never happen again.

How Did This Order Ever Ship?

The next question that was asked was how this order ever shipped. It was hypothesized that since 100 widgets were 100% inspected at least 1 of the 100 widgets should have been found to defective which would have forced a more thorough inspection of the entire lot.

Bring in the Black Belt

Not sure how to solve this problem the team asked their local Six Sigma Black Belt to help them determine the probability of catching at least 1 defective product while inspecting 100 units out of a lot of 1,000.

The Hypergeometric Distribution

After learning more about the situation the black belt decides to use the Hypergeometric Distribution, which Wikipedia so eloquently defines as a discrete probability distribution that describes the number of successes in a sequence of n draws from a finite population without replacement.

Here is how the black belt set things up in Minitab, which is the statistical software package they use.

In this example we are dealing with a finite population of 1,000 widgets so the “Population size” is 1,000.

Since we know, in this example, 36 widgets were defective and being defective is the “Event” in this case, the “Event count in the population” is 36.

Since the company sampled 100 widgets before shipping the lot, the “Sample size” is 100.

And since, for the Hypergeometric Distribution, X is the number of defective widgets we found in the sample of 100 widgets… X can range from 0 (we found no defective widgets) up to 36 (we found all defective widgets).

Now then, since the Black Belt wants to know the probability of finding at least 1 defective widget, they want to find the probability that X is greater than 0.

So, by using an “Input constant” of 0, they learn that the probability of having no defective widgets in this lot of 1,000 widgets is ~ 2% as shown above.

In other words, there is a 98% chance that at least 1 of the 36 defective widgets should have been detected during the inspection process.

The Conclusion

With this information, the team came to the conclusion that their inspection process was broken. There were three theories that needed to be investigated.

1. The measurement system is not repeatable and/or reproducible
2. The units were not inspected at all
3. Defective units were allowed to pass

So, as is the case with many things related to continuous improvement, answering one question has created several more that need to be addressed.

What do you think?

What do you think of this analysis? Would you have done it another way? What about the conclusions of the team… can you think of another theory of why these widgets were sent to the customer?

I am the father of 4 wonderfully perfect children. I love them more than words can describe and couldn’t imagine my life without them.

And, recently, I’ve been thinking about how much having children helps me to sharpen my lean and six sigma practitioner “saw.”

Of course this isn’t to say that those without kids can’t also sharpen their lean and six sigma saws… but we parents just might have a bit of an advantage if we leverage this gift we’ve been given.

So, with this said, here are some of the ways my children help me to be better at what I do.

Commitment

Raising children takes a tremendous amount of commitment and self sacrifice. No matter what… we know at least one of our kids will be hopping on our bed by 6:00 AM each and every morning.

Likewise, anyone serious about lean or six sigma knows how important it is to stay committed to excellence. In fact, every day you should ask yourself… have I left this place better than it was when I walked in this morning?

Patience

Ah yes, patience. It goes without saying that my kids often get on my nerves and really try my patience. Especially as they learn to ‘test boundaries.’ But I know this is part of growing up so I do my best to persevere.

Likewise, continuous improvement often comes much slower than many expect or desire. In other words, patience is most definitely required!

Continuous Learning

My wife home-schools our children and I often marvel at how much my oldest (6 years old) daughter has learned.

She, if you’ll allow a proud Dad to boast for a moment, is reading at around a 3rd grade level and can work my iPhone better than most adults I know!

But the thing I am most in love with is how hungry all of my children are to learn. I pray they never lose this.

Likewise, all lean and six sigma practitioners must continue to learn. There are many ways to go about this such as reading books, or blogs, or online training that never ends.

Long-term Thinking

As parents my wife and I are constantly thinking long term with respect to our children. We are doing our very best to form their faith while teaching them to be good citizens.

Likewise, many business owners and senior executives would do well to focus on the long term and not on how to simply make Wall Street happy this week.

Why, Why, Why, Why, Why

If there is one lean principle most kids have mastered by the age of 3 or 4 it’s how to ask why over and over.

Sadly most parents – myself included from time to time – often grow tired of hearing so many questions day in and day out which often times beats this amazing gift right out of our most important assets (our kids).

So, it goes without saying that if we grown-ups all learned – or remembered – how we used to ask why over and over… well, the world might just be a better place.

Let’s Hear from More Parents

If you’re a parent or spend a lot of time around children… what have I missed? Are there other things you’ve learned from your little one’s about continuous improvement or life in general?

Today I submit a quick, but extremely important post if you produce a product of any kind.

There are two different ways your product can be “bad.”

It’s defective

First, said product can be defective. This is to say something is wrong with it. It doesn’t work like it’s supposed to. It doesn’t look like it’s supposed to. The customer, who pays you good money, ain’t gonna be happy with said product.

It has multiple defects

Second, the aforementioned defective product might have multiple defects. This is to say there are many things ‘wrong’ with the product. It has 103 different scratches all over it, 14 surface mount components are not soldered correctly, and the text on the label is incorrect in 3 different places.

Manage the defects

In summary, it only takes one defect to create a defective product. But a single defective product can have a zillion defects.

What does this me to you, maker of said product? You need to stop focusing on how many defective units you produce… instead you should be laser focused on the number of defects you’ve created the past month.

Do you agree? Is this how you manage your business?

“Knowledge is what keeps the momentum going between dreams and reality.” -Author Unknown

I am a firm believer that the “thinking” that occurs while practicing lean manufacturing and six sigma is extremely important.

I was reminded of this by, well, myself when I re-read an answer I gave Kevin Meyer a month or so ago for a blog series he’s running.

And I won’t back away from this since I truly believe that learning how to think is far more important than any single “tool” or “technique” one can learn.

But does this mean the tools and techniques of continuous improvement aren’t important? Of course not.

In fact, I’d be willing to wager that the more tools and techniques you know the better you’ll be able to think and solve problems. Allow me to explain.

Continuous Improvement Snobs

There are some folks so in love with either lean or six sigma they snub their nose at the other.

Some ‘lean purists’ will attempt to say, for example, how six sigma is no good and that they wouldn’t be caught dead using “it” as if it (six sigma) were some type of disease.

Likewise there are ‘six sigma purists’ who think lean is a second class continuous improvement citizen due to what they feel to be a simple set of tools.

With all due respect, I find both sets of people highly ignorant… but that’s just me.

Learn it all

My approach has always been to learn as much as I can about all facets of continuous improvement. You see, I could really care less if something is labeled lean, six sigma, lean six sigma, TOC, etc.

All I want to know is how to solve problems no matter the situation. And time has taught me that sometimes a so-called six sigma toolset might be of better use than a so-called lean toolset.

For example, I am not sure I’ve ever read Dr. James Womack or Dr. Jeffrey Liker (two leading ‘lean’ experts) ever write about the benefits or importance of a repeatable and reproducible measurement system.

Likewise, I am not sure I’ve ever read George Box (a leading statistical expert) write about the greatness of an andon system. But does this mean six sigma ‘belts’ should not learn about what an andon system is? Of course not.

Morale of the story

So, the morale of my rant is this. I truly believe the more you learn the more you’ll be able to think. And the more you’re able to think the better you’ll be at solving problems. And, in the end, isn’t that what continuous improvement is really about?

Do you agree with me? Have you ever heard a ‘lean’ guru bash six sigma or perhaps a ‘six sigma’ guru bash lean? What is your response when they do?

Let me start with three words: passionate, ecstatic and enthralled.

• Passionate is the perfect word to describe how I feel about continuous improvement.
• While ecstatic best describes my joy at being able to share some exciting news with you.
• Finally, enthralled is how I feel when collaborating in a mode of creative flow.

What am I going on about?

Allow me to explain.

You see I, along with two of my favorite people in the whole wide lean world (Jon Miller of Gemba Panta Rei and Kevin Meyer of Evolving Excellence), have been extremely busy creating what we feel will become the best continuous improvement learning system available.

We’re calling it Gemba Academy.

What is Gemba Academy?

Before explaining what Gemba Academy is, let me go out on a limb and make three assumptions about you:

• You are sick and tired of training presentations full of boring text and bullet points.
• You are not a fan of fuzzy PowerPoint presentations converted to Flash and thrown up on the Internet.
• You are not looking forward to sitting through that next 100-slide training session.

Well, let’s just say we’re with you. As such, at Gemba Academy, were committed to the following:

• Crystal clear high definition videos distributed on an advanced network of servers that span the globe. So, no matter if you live in Dallas, Texas or Mombasa, Kenya you will be able to watch, interact and learn right along with us.
• Content created by active practitioners that is continuously improved and added to. We will most definitely practice what we preach.
• Our pricing and business model is simply unbeatable. Let’s just say some people spend more every day on fancy coffee.

Simply put, Gemba Academy is where web 2.0 meets continuous improvement learning.

Gemba Academy officially launches in March 2009. But until then, you can get sneak peak at what we’ve been up to by visiting our main site at: http://gembaacademy.com.

Creating meaningful charts and graphs for safety related issues can be hard, not to mention confusing. It doesn’t have to be. In this article I will share a technique that may help bring some clarity to the situation.

The Wrong Approach

First, let’s assume a company tracks the number of accidents per month. For the sake of an example let’s use this totally fabricated data set:

• Jan-07: 0
• Feb-07: 1
• Mar-07 : 0
• Apr-07: 0
• May-07: 0
• Jun-07: 1
• Jul-07: 1
• Aug-07: 0
• Sep-07: 0
• Oct-07: 0
• Nov-07: 0
• Dec-07: 1
• Jan-08: 0
• Feb-08: 0
• Mar-08 : 0
• May-08: 1
• Jun-08: 0
• Jul-08: 0
• Aug-08: 0
• Sep-08: 1
• Oct-08: 0
• Nov-08: 0
• Dec-08: 1

With this data, some may attempt to create a c chart. When they do they get something that looks sort of like this.

The upper control limit is 1.959 and the measure of central tendency is 0.304. Friends, this graph is pretty much useless. There is really no way of determining if things are getting better, worse, or staying the same.

A Better Approach

A better approach would be to somehow convert this data into a yearly rate. There are a number of formulas you can use to do this… but one I quite like is to simply count the days between accidents and multiply is by 365.

For example, the first accident (in our made up data set) happened on February 8, 2007 and the second accident occurred on June 16, 2007. This means there were 128 days between accidents.

So, our annual accident rate could be calculated as follows: (1 accident/128 days) * (365 days/year) = 2.85 accidents per year.

When we work the math for the rest of the data we see something like this.

• 8-Feb-07, first accident
• 16-Jun-07, 128 days between accidents, rate = 2.85
• 10-Jul-07, 24 days between accidents, rate = 15.21
• 17-Dec-07, 160 days between accidents, rate = 2.28
• 1-May-08, 136 days between accidents, rate = 2.68
• 6-Sep-08, 128 days between accidents, rate = 2.85
• 11-Dec-08, 96 days between accidents, rate = 3.80

Now, by using the rate data we can create an Individuals and Moving Range Chart (I-MR) that looks something like this.

This graph is far more powerful than the c chart. From this I-MR chart we can see that we had a blip early on but have since leveled off.

In other words things are pretty much staying the same. And since we’re talking about the safety of our workers the fact things are moving sideways – averaging around 5 accidents per year – is probably cause for strong action in most companies.

Not the Only Way

As I mentioned, this is not the only way to calculate an annual accident rate. With this said, I would be very interested to hear how your company goes about this.

As promised a few posts ago, I’d like to explain exactly how to go about completing a measurement systems analysis (MSA).

If the sound of this makes you want to yawn… well… stop it! It’s Monday and time to get focused (and some coffee).   Seriously, this one tool has greatly benefited me over the years and I know it will you too.

The two pre-cursor articles to this one explained one such example of a variation story and how a simple MSA helped save millions of dollars in 60 minutes.

Now then, tonight I want to begin by explaining what a measurement system analysis is as well as two types of MSA that will serve you very well once you’ve mastered them.

MSA Defined (Job Interview Proof)

Right, so if you’re ever on a job interview and get asked to explain what an MSA is you would probably do well to rattle off something like this:

A Measurement System Analysis, abbreviated MSA, is a specially designed experiment that seeks to identify the components of variation in the measurement.

That would be the Wikipedia definition and I guess it sounds pretty nice… and chances are the guy interviewing won’t have a clue himself… so, yeah, this would be a great answer!

MSA Defined (Ron’s Take)

But listen, I’m a simple man. So rather than getting all text book like allow me to offer my explanation of what a MSA is. You see, anytime we measure something (e.g. the weight of a part) we’re actually dealing with two types of variation.

1. The variation within the parts/process we’re studying (P)
2. The variation within the measurement system itself (M)

In other words, the total variation we’re experiencing (T) can be explained by a formula that looks something like this: T = P + M.

In a perfect world the variation due to M (measurement system) would be zero meaning all we need to do is attack and defeat the variation within the process (P) and then ride off victorious.

Sadly, many times there is so much variation with the actual measurement system we have no earthly clue how much variation is due to the actual process.  Even worse, we may try and try and try to improve the process only to find out the problem wasn’t even the process… it was the dang measurement system!

And this is precisely why measurement systems analysis is so important. We must identify how much of the total variation is due to the process and how much is due to the actual measurement system.

Types of MSA

There are different types of MSA out there and the one you choose has a lot to do with the data you’re dealing with.

• When dealing with variable data (data we can measure like weight, distance, etc.) a Gage R&R study will serve you well. This stands for Gage Repeatability & Reproducibility.
• When dealing with attribute data (pass/fail, good/bad, etc.) an Attribute Gage study will do the trick nicely.

Up Next

Now that we know what a MSA is as well as two popular types of analysis it’s time to learn how to conduct the actual studies… and that’s precisely what we’ll discuss in the very near future!

If you have any experience, good or bad, with measurement systems analysis please share in the comments section below.  Also, if you have a specific question on the topic please share that as well.