Lean & Six Sigma Minali Wadu Mesthri BSc in HR & Leadership (UK) MSc in Business Psychology (UK)
Cause & Effect 01 04 Lean 02 05 Six Sigma Value Vs Waste TQM 03 06 Kaizen
“Lean aims to eliminate waste in order to focus on creating the most value possible for customers” — Someone Famous
Audi R8 & Driving Style Iron Man Wikram Run for 05 Km Run for 15 Km With 01l of gas With 01l of gas
The White car used its resources in a more economical way. Exactly the same happen in business. With the same number of people a plant may produce more goods. A hospital can treat more patients. A call center can enter more calls. In a nutshell lean is a methodology to help the companies run like the White car, creating more value for customers using resource more efficiently and less budget. Lean aims to eliminate waste in order to focus on creating the most value possible for customers.
The Value Values are what the customers are willing to pay for. Customers can get value from a physical good, a service or even an experience. Value is difficult to quantify since it is directly related to customer perception, context and purpose. Ex: You want to buy food and the value you get from the food is a function of your taste or preferences, your hunger and and nutrition. Ex: The value of a health check is a diagnostic and value of hiring a consultant is a piece of advice. When you are willing to pay for a good or a service, it is because you feel that the value you receive is higher than the price you pay
The Value Customers can have different perception of the value of same good or the same service. Ex: the value of a news article may be entertainment for one person, could be information for another and expert analysis for yet another. Thus, companies prefer customer segmentation which target different customer profiles with the specific value offering. When the customers pay the price for a good or a service produced by a company, they pay for every activity performed by each employee of this company .
Value in not created in a moment, but in a stream of activities 01 min to take order Preparation 03 mins to knead the 02 mins to ready the table Serving dough 03 mins to cook of the dough 01 min to bring it to the 02 hrs doughs to rest table (by hand) Quality & fresh Bake using a ingredients wood fire oven Cutting and storing 03 mins to cook What is the cost? A 6$ Pizza in 7mins? Is this realistic?
Classroom Activity Select and briefly distinguish a service process you have recently witnessed in your everyday life (buying bread, renting a car, booking a flight ticket, contacting customer service etc. Then describe the process further as follows: ● Break the process down into at least 05 activities ● Identify at least 02 activities in the process that create value and explain why ● Identify at least 02 activities in the process that create waste and explain why ● For the 02 activities that create waste, make short term actionable suggestions to improve these activities
Q&A - Check your understanding ● What is the essence of the Lean methodology? A.Lean aims to eliminate waste in order to focus on creating the most value possible for shareholders B.Lean aims to eliminate waste in order to focus on creating the most value possible for employees C.Lean aims to eliminate waste in order to focus on creating the most value possible for customers ● It is a rush hour and because of traffic jam, taking the tube would be cheaper and faster than driving. In which of the following situations does a taxi ride generate more value than its cost? A.You are not is a hurry B.You are in a hurry C.You need to make an urgent phone call for an important job
What are the differences between these coins? Dollar 01 Dollar 2
What are the differences between these coins? Dollar 01 Dollar 2 These are two dollar spent by a company to create value. They look the same. They are identical in the financial statement as well. But in reality they are very different.
Not every Dollar spent creates value Customers pay companies to receive a value from goods and service sold. Therefore, companies transform resources, such as capital and labour into operations, which in turn create the value customer requires. Not all the resources are used to produce the same quantity of value. Good Dollar Bad dollar This dollar create value for This dollar does not create value, this creates waste the customers
Do you know? 80- 10- 20% 90% Creates waste Creates Value
Value vs Waste It is impossible for a company to distinguish a good from a bad dollar by looking at the financial statement alone. Thus, shareholders and managers do not know how much of their company cost to create a value or waste. Hence, Lean shows the difference between value creation and waste creation with the purpose of increasing value creation by spending more good dollar and reducing waste creation by spending fewer of bad dollars.
Video 01 The origins of Lean Manufacturing
The origin of Lean After losing World War II, Japan had to rebuild and wanted to win the economic war. At that time USA was sending 80% of all cars worldwide in 1950. Taichi Ohno and Eiji Toyoda both Industrial engineers employed at Toyota designed a strategy to compete Americans with automotive manufacturing. This led to focus on weaknesses such as standardisation, low quality, poor working condition and to focus on innovation.
The origin of Lean - TPS Toyota Production System (TPS) which designed to be more customised and make high quality cars led that Japan overtook the US in car production in 1980. Lean is a strategy to win in the marketplace. Lean has been wrongly perceived as a simple cost cutting tool. Lean can be applied to all types of context and all types of companies. Ex: A luxury fashion house can reduce the time to launch a new collection. A hospital can reduce the waiting time for its patients.
Waste
What they have in common? IKEA Apple McDonald
What they have in common? They all use lean principles as a competitive edge to support their strategy. McDonald IKEA Apple Portfolio rationalisation Extreme standardization Lean concept of Steve Jobs offered clearer McDonald cook book = step design-to-cost product range by removing of preparation and Design-to-transport 70% of product range. processes are included Design-to-install Same taste around the world
Video 02 Lean Manufacturing at Volkswagen plant
Q&A - Check your understanding ● In the Toyota Production system, which is at the core of lean as we know it today, was developed as a completely new concept? A.True B.False
Operation Manager & Operating Model & Lean In companies, operation managers have to design their operating model by focusing these important decisions: ● Decide which activities should be performing internally ● Decide which activities should be outsourced ● Decide which activities should be performed centrally or locally ● Decide if the different departments have to be organised by geography, by product or by function.
The myths of Lean Manufacturing Lack of consideration Lean is only for for human factor manufacturing Lack of strategic Lean is only for certain approach environments Lean means laying off Lean means cost people cutting
Lean Mapping Create Value Value Stream Eliminate waste Applicable for any Business company Sustainability
Q&A - Check your understanding ● What is the initial purpose of value creation? A.To make employees productive B.To enrich shareholders C.To satisfy customers ● Lean is only useful for low-cost companies that need to compete on price A.True B.False ● Lean principles encourage companies to foster cooperation between employees. A.True B.False ● Lean generally equals cost-cutting. A.True B.False
Video 03 Daily Lean practices
Q&A - Check your understanding ● Middle managers have the most important role in a Lean transformation because they are in charge of the daily Lean implementation? A.True B.False
What are the problems in operations? Infrastructure Financial & Technical Time problems HR problems problems Limitations
If you are facing problems,… Think inside the box and give up? (Waiting resources from somewhere) Work together and do something? (Work with … .. for improvement) Are you a positive thinker or negative thinker?
5S-Kaizen-TQM Approach? Stepwise approach for better management & quality of operations 5S Kaizen TQM Working environment Participatory problem Maximum use of the improvement solving process capacity of the entire organisation
5S-Kaizen-TQM Tree
Recommend
More recommend
