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The Toyota Production System (TPS) and Lean Manufacturing The Toyota Production System is a unique approach to manufacturing. It was she who gave rise to the movement for lean manufacturing, which (together with the concept of Six Sigma) became one of the dominant

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Michael George A chapter from Lean Six Sigma in Service. How Lean Speed ​​and Six Sigma Quality Drive Business Improvement
Publishing house "Mann, Ivanov and Ferber"

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Six Sigma metrics allow you to compare the distribution of actual results against a range of acceptable values ​​(customer requirements). A defect is any value that does not meet the customer's requirements. The greater the area under the distribution curve falls within the range of customer requirements, the higher the sigma level. To compare different processes, instead of the number of defects, the concept of "percentage" of defects (or "defects per million opportunities") is used.

Six Sigma is a process that yields 3.4 defects per million opportunities, given expected variances.

Here is one example: any enterprise that planned to develop construction in Fort Wayne soon found out that doing business in this city was, to put it mildly, problematic. Among other things, just getting required permits it often took almost two months (average 51 days). A team of municipal employees benchmarked and identified gaps that prevented Fort Wayne from competing with other cities where a similar issue was resolved in less than a month.

The team tasked with improving the permitting process soon identified the most important steps, eliminated redundant steps, and developed standardized procedures with clear guidelines. When the process began to be implemented in a new way, 95% of permits were issued in less than 10 days. Many customers - firms that had previously been reluctant to build in Fort Wayne - immediately noticed this improvement.

The ABCs of Lean Manufacturing

Every discipline has its own language, and lean manufacturing is no exception. There are a number of terms you will need to understand and explore the possibilities of Lean (you will encounter all of them throughout this book).

Lead time and process speed

Lead time indicates how long it takes to deliver a product or service from the moment an order is received. A simple formula known as Little's law (after the mathematician who proved it) helps to understand the factors that affect the lead time:

This equation allows us to determine how long it will take to complete a unit of work (lead time), given the amount of work in progress (work in progress) and the amount of work that we can do per day, week, etc. (productivity).

Little's law means much more than it might seem at first glance. Most of us have no idea about performance, let alone variance rates. The very thought of having to follow every step of the order fulfillment process - especially if such a process lasts several days or weeks - makes us despondent. (Think back to the history of obtaining permits in the city of Fort Wayne and imagine what it's like to track a process that takes 51 days.) With the values ​​of the two variables involved in this equation, we can determine the third. In other words, if you know WIP and productivity, you can determine the lead time. If you know the lead time and productivity, you can estimate the WIP in the process.

Unfinished production

Sometimes those who deal with the provision of services avoid the term "work in progress", since this term is traditionally associated with the production line. However, the concept itself is applicable to almost any process. If you feel the need to transform this term lean manufacturing in relation to your activities, try to think of WIP as "things" in the process. These "objects" may represent customer requirements, receipts to be processed, phone calls to be answered, reports to be completed, etc. - this refers to any work waiting to be completed. Almost everywhere in this book, the term "work in progress" is used. When faced with it, think about own work and about how many unfinished business you have on your desk, waiting in the wings on your computer or on your answering machine. All this is a work in progress.

The goal of lean manufacturing is to create conditions so that you have enough resources and work is carried out at a given pace in accordance with customer requests. More importantly, through a standardized process, Lean allows you to quickly respond to customer signals, which means that it makes the process predictable, manageable, and stable.
Jim Kaminsky, Assistant Vice President, Bank One

Delays / waiting times

Work in progress means there is work waiting to be done. In Lean language, this job is "in line"; and the time during which it is not dealt with is called "waiting time." Time in the queue, regardless of duration and reasons, is a delay.

Value-adding and non-value-adding work

When you start tracking the flow of work, it becomes clear to you that some activities add value from the customer's point of view (and are called value-added work for this reason). To test whether a given piece of work adds value, ask yourself if your client would be willing to pay for it if they knew it was included in the overall price of the product. If, in all likelihood, he refuses to pay for it, or prefers to do business with a supplier who does not have such costs, we are talking about work that does not add value.

Process efficiency

For any service delivery process, a very important indicator is the proportion of the total cycle time that is spent on value-adding activities. This indicator simultaneously shows the proportion of losses and is called the efficiency of the process cycle. It is the ratio of value added time to total lead time:

Process Efficiency = Customer Value Added Time / Total Lead Time.

If the process efficiency is below 10%, then the process is overloaded with non-value-creating waste and can be improved.

Losses

As we have just shown, waste is everything that does not add value from the customer's point of view: time, cost, work. There are some losses in all organizations, as there are weaknesses everywhere. It is they who should be eliminated during optimization. The volume of losses in any activity is proportional to the duration of delays in the course of work. Lean manufacturing teaches us to recognize and eliminate waste, rather than mindlessly following the beaten track. In the practice of lean manufacturing, there are seven types of waste.

Key Lean Lessons

The foregoing allows us to draw some seemingly very simple, but extremely important conclusions that say that with the help of lean manufacturing we can quickly achieve improvements. Here are the findings, which will be discussed in more detail below.

1. Most processes are not "lean" and have a process efficiency rate of less than 10%.
2. Reducing work-in-progress is paramount (because you can't control work-in-progress, you can't control lead time).
3. Each process should work on a "pull" system rather than a "push" system, which eliminates lead time variance.
4. About 20% of work generates 80% of all delays.
5. You can't improve what you can't see: you need to visualize the process based on the data.

Lesson #1 Most processes are not "lean"

I guess you won't be surprised to learn that in "lean" service processes, the bulk of the work—50% or more—is done in non-value-adding activities. This can be visualized on a process map using colors or other techniques to visually distinguish value-adding work from non-value-adding work. Yes, Fig. 3 shows the initial fragment of a basic block diagram compiled by the Lockheed Martin team. This team found that 83% of the work done between placing a purchase order and receiving a product does not add value (i.e., is a waste). This includes correcting errors, requesting quotes from wholesalers (although prices can be negotiated in advance), obtaining corrected drawings, and other actions caused by delays in earlier stages of the process.

Can speed compromise quality?

We have all been in situations where the requirement to “work faster” created quality problems and slowed down processes as a result. Therefore, it would be quite reasonable to fear: will a lean approach aimed at speeding up the process cause damage to quality? This is not happening. Why? Because lean reduces time by eliminating non-value-adding activities, eliminating queues, reducing time between value-adding activities, and so on. Lean typically leaves the critical process steps that provide value to the customer intact. The use of Six Sigma tools for value-creating operations reduces the number of defects, which in turn speeds through the value-adding stages.

However, since these stages typically account for less than 10% of the total lead time, increasing the speed of value-adding processes has little effect on the speed of the overall process. Impact only increases appreciably when non-value-adding activities are eliminated.

Rice. 3. Simple flowchart (illustrating value-adding and non-value-adding activities)

The Lockheed Martin Supply Center team has found that most of the work from the time a purchase order is placed to the receipt of materials is waste (no value added). Measures were taken to compensate for errors, omissions and delays in earlier stages of the process, as well as measures to reduce the huge variety of heterogeneous tasks (complexity). The finer detailing of the value stream (representing the 248 stages at the required level of detail) and the subsequent reduction in complexity through standardization eliminated much of the waste. The results of these improvements have allowed the company to cut procurement costs in half.

Lesson number 2. The primary task is to reduce work in progress

Let's go back to Little's law.

Lead Time = WIP / Productivity.

This equality is not just a theoretical construct, it has many practical implications. First of all, it shows that there are two ways to reduce lead time - either by reducing WIP or by increasing productivity. In any operation that does not involve direct contact with the customer, that is, where work in progress is orders, emails or reports, and not people, it is much easier to control the volume of work in progress than to increase productivity. In fact, you can speed up any process - save time - simply by reducing WIP and doing nothing to increase productivity.

This conclusion explains how, by applying the principles of lean manufacturing, it is possible to quickly achieve positive results. It should only be as far as possible to limit the amount of work received for processing per unit of time. The following explains what to do if work in progress is “people” and the best way to save lead time is to connect additional capacity to increase productivity.

Why should we prioritize work in progress? To reduce its volume, only intellectual capital is needed. Improving productivity requires investment or an increase in the payroll, both of which have a negative impact on the return on invested capital, and therefore on shareholder value. Little's Law provides a mathematical foundation that allows us to apply lean manufacturing methods to any process.

Lesson number 3. "How to cut down on this damn work in progress?" (Creating a "pull" system)

Take a look at your workplace. Is your box full Email unread messages? Do you have a long list of emails that will take days to review? Is your answering machine refusing to receive new messages? Is anyone waiting for the results of your work?

All these are different forms of work in progress, work that someone else is waiting for you - a colleague or a client. As a lean newcomer, you know that in order to reduce cycle times and waste, you must reduce WIP. You know that work-in-progress is like cars on a freeway: if there are more cars, the speed of traffic on a congested road drops! But how to do that?

Naturally, you can't limit work-in-progress in customer-directed processes when the work-in-progress is customers waiting for service or wanting to purchase a product (in such situations, there are other ways to maintain or reduce lead time).

For any job that doesn't have a client in front of you, the key to reducing WIP is Little's Law. In lean service processes, there is a stage that precedes the process itself, a stage in which input factors (requests for work, orders, calls, etc.) are "accumulated". Then someone controls the input of these "factors" into the process.

Consider the following example. Independent distributors to determine estimates for construction works needed information about commercial offers from the marketing department. They were unhappy that the marketing department took two to three weeks to present this information. The period that suited them was three days.

Working group collected data over the course of several weeks showing that marketing staff could process an average of 20 offers per day. Distributors wanted a guaranteed 3 day lead time; the data obtained indicated that the deviation in the process required a more stringent target of 2.4 days.

How much work in progress was allowed in this process? Turning to Little's Law and substituting 20 (productivity) and 2.4 (lead time) into the formula, the working group received a maximum volume of work in progress equal to 48 proposals - this is the number of proposals "in work" at any given time.

Lead time = 2.4 days = (WIP = 48 offers) / (Productivity = 20 offers/day).

To manage such a system, they created a stand to visually display information about the number of proposals being processed. The work-in-progress limit was 48 requests, so until their number dropped to 47, a department employee could not start processing new requests, as shown in Fig. four.

The secret that makes this system work is in the lower left corner of Fig. 4, which shows the drive labeled "input". (Depending on the nature of your work, this repository may be a physical container or an electronic database.) Requests do not formally enter the process while they are in the raw material reservoir. The only signal to supply work to the input of the process is the output of a unit of output from the process - this is the "pull" system. Guaranteed service delivery time - about two and a half days is counted from the moment the application enters the process. In other words, the "pull" system in the service industry means making deliberate decisions about when to start work in the process. However, it is very important how such decisions are made: the value cannot be overlooked. In this case, it is a matter of which ticket is entered into the process when another ticket has been processed. It is hardly appropriate to process bids on a first-come, first-served basis, as some bids promise high-value prospective orders, while others are small orders, contain dubious price offers or, apparently, will be rejected.

Rice. four."Pull" system for commercial offers for sale

The issue of the processing order can be resolved by prioritizing proposals depending on the prospects. Each application is characterized by the following three parameters, each of which is evaluated on a three-point system:

• complexity of the calculation;
• competitive advantage;
• gross profit in dollars.

The scores for each of the criteria for each proposal are multiplied. The proposals with the highest rating are submitted for processing first, even if other applications are waiting for their turn for a longer time. (A new application with a rating of 9 is entered into the process faster than an application with a rating of 6 submitted earlier). Using such a system, the marketing department staff, with the same number, was able to increase gross income by 70% and increase gross profit by 80%. (Of course, the company could increase productivity by increasing the number of marketing staff and incurring huge costs.)

How to create your own "pull" system?

How to make such a system work for you? The following is an example sequence of actions.

1. Define/affirm the desired level of service. Ask the customer what level of service they would like.
2. Determine the speed of work of your work team (based on data).
3. Use Little's Law to determine the maximum amount of work in progress allowed.
4. Limit the amount of work in progress to the maximum value obtained.
5. Put all incoming work into the input bin.
6. Develop a prioritization system for the order in which work is put into the process from the drive.
7. Continue to improve the process further, which will allow you to increase the speed of work and achieve further reduction order lead time.

The positive impact of Lean Six Sigma on situations like this is twofold: first, in service delivery, the decision is made, which was not the case before, based on data (demand variance, work in progress, and productivity). Secondly, it uses the tools of speed and quality that are adopted by those who are willing to put in the time and effort to get things done.

Carefully! Don't treat the customer like a stock or a raw material!

The "pull" system described above works when documents are submitted at the input for processing, electronic correspondence, phone calls, etc. But in the process of communicating directly with the client, you must keep the response time and productivity of the service process at acceptable level, no matter what happens. When customers are work-in-progress, you cannot create inventory from them, nor can you increase the waiting time for a service, and therefore the lead time. Little's law says that the only possibility in this case is to increase productivity.

One problem with direct-to-customer operations is high demand variances, with busy hours of customers alternating with periods of downtime.

If the dynamics of this interleaving is predictable, you can improve performance by changing the number of service personnel: during peak hours, you can attract additional workers, as is done in call centers (call-center). If demand variances are unpredictable, then queuing theory should be applied, which will allow you to calculate how various factors, such as supply or demand variances, affect WIP (and hence lead time). For example, fig. Figure 3.11 from Lean Six Sigma: Combining Six Sigma Quality with Lean Speed, reproduced in Figure 3.11. Figure 5 shows that if you have 20% performance margins, demand variation has little to no effect on customer wait time.

Rice. 5. The negative impact of the deflection is maximum when operating at the capacity limit

Spare capacity can be provided by bringing in staff from other departments who are trained in related skills, or by using a prioritization system (as in the "pull" system described above) that assigns more complex services to more experienced staff.

Lesson number 4. Process efficiency lets you quantify your capabilities

Typically, the efficiency of processes in the service sector is about 5% (Table 1), that is, 95% of working time is spent waiting. Terrible? Still would. And it's not just about delays. The old adage is true: the longer a job is left unfinished, the more expensive it is. In lean processes, the time to add value is more than 20% of the total cycle time.

Table 1. Process efficiency

Don't be surprised if your organization's processes are less than 5% effective. Don't be discouraged. Experience shows that by applying the basic tools of Lean Six Sigma, you will quickly begin to reap the benefits and be able to reduce costs by at least 20%.

The efficiency of a process can be visualized by separating value-adding time from non-value-adding time in a value creation timeline, as shown in Figure 2. 6. (Such a visual representation helps to stir up and interest people!)

Rice. 6. Time axis of value creation

The idea of ​​a value creation time map is quite simple. It is necessary to trace the processing of any unit of production and attribute the time spent to one of three categories: 1) adding value, 2) inevitable losses - they are an integral aspect of doing business (work that the client does not want to pay for, but which cannot be dispensed with - accounting, legal and other compliance) and 3) delays/losses. Then draw a timeline and plot all three categories on it. In the Lockheed Martin Procurement example above, you can see that it takes four days from the time a requisition is received by the procurement center to the time the order is placed. Value-added work (dark areas above the middle line) shows that during these four days the buyer spent 14 minutes processing the order. Most of the time that is shown as white space is waiting time. Initially, this process had an efficiency of less than 1% (14 minutes out of 4 days, or 1920 minutes).

The time axis of value creation tracks the movement of a unit of production during the process and takes into account the time spent. Above the middle line is time that adds value from the consumer's point of view; the rest is loss.

Lesson number 5. 20% of work generates 80% of delays

To achieve the main goal of lean manufacturing - speed - there is only one way: get rid of everything that slows down the process. Mapping the process and collecting data on cycle time, variance and complexity will allow you to calculate the delay time for each individual operation of the process. Experience shows that in any process with an efficiency of 10% or less, 80% of the lead time is "eaten up" by less than 20% of the operations - another example of the Pareto effect in action! This 20% is called "hidden time lost", which becomes apparent when mapping the value stream and can be represented in the form of a value time graph (as in Figure 6).

Identification of latent losses is one of the most important problems, since the priority in this case is determined by the length of the delay. By correctly prioritizing targets, you will have a powerful leverage on the financial results of improvement.

Lesson #6

If the opportunities for cost and lead time reduction in service delivery are so great, why not apply Lean Six Sigma more often?

One of the obvious benefits of manufacturing is the ability to see and track the flow of work. You walk along the production line and see how the product is processed and how, moving from one workplace to another, raw materials or materials turn into the final product. This flow is always documented in the dispatch department, which records value-added work. In addition, you see tangible evidence of wastage (work-in-progress, scrap, delays) in the form of piles of work-in-progress or scrap.

In the provision of services, much of the work remains invisible. With a single keystroke, someone sends a report to another office at the end of the hallway or anywhere in the world. Someone presses a button on a phone and switches a customer from one department (eg customer service) to another (technical support).

In services, it's harder to see more than just flow (process). It is almost equally difficult to estimate the amount of work in progress. Yes, some of us can estimate its volume by looking at the pile of papers on the table or counting how many people are waiting in line waiting for service. But much more often, "work" takes less visible forms - for example, reports or orders in in electronic format waiting to be processed, 20 emails to be answered, 10 customers hanging on the phone line.

But while it's difficult to make workflow visible in the service industry, making sense of it and estimating work-in-progress is a prerequisite for using lean tools to increase speed and reduce waste. Various maps can be used to “make the invisible visible,” including the value stream maps that you will see many times throughout this book (an example of such a map is shown in Figure 7).

Rice. 7. Value stream map (process flow map)

In addition, fig. 7 shows that many management processes overly complex. For example, in one company, approval of a design change requires the signature of seven managers, and the approval form travels for weeks through seven incoming document trays. This service delivery process causes serious problems in the manufacturing process because it prevents changes to the drawings (and the products that are made from those drawings) in a timely manner. The long cycle of such a decision-making process means that once a quality problem has been identified, rework will continue for a very long time even after new drawings have been created from which products can be produced without defects.

When the company took a closer look at the processes for obtaining all seven signatures, it became clear that five of the seven managers do not have the knowledge and skills that are relevant to the job. It was quite enough for these five managers to receive a notification about the approval of a new document, which would not cause the slightest damage to the process. A copy was still sent to them. this document because it was helpful for them to know about the changes that had been made, but they were left out of the decision-making process. Now the two remaining managers have less than a week to study the form and resolve all issues, after which the process can continue further.

visual management

The abundance of visual management tools used by lean production is explained by the benefits of a visual representation of work in progress, costs, and employee competencies. These tools allow you to:

• identify and visualize work priorities;
• visualize daily performance indicators of the process (“was the day successful or not?”);
• create favorable conditions for communication in the work area, as well as between management and staff;
• provide feedback to work team members, foremen (supervisors) and managers and enable all employees to contribute to continuous improvement.

Rice. eight. Tact board for registering orders

At its simplest level, visual management can include posting process maps (which show how the process should be done) or a list of indicators on a bulletin board so that everyone in the work area can see how successful or unsuccessful the process is. Rice. Figure 8 shows a special kind of visual management tool called the takt board (the word takt is German for "metronome"). Such boards are used to maintain the desired rhythm or pace of the process. The board shows the desired pace of production (subject to customer requirements and WIP limits) and the actual speed at which the participants are working. The group that developed this board has defined a work in progress limit and uses it to keep the number of requests in process at 48. Next, we will talk about other visual management tools.

Examples of applying lean production tools in the service sector

A few years ago, Lockheed Martin's systems integration department focused much of its procurement work on the Mid-Atlantic Region's Materials Purchasing Center (MAC-MAR). This center serves 14 regions with different addresses (“clients” of MAC-MAR). Many of these regional sites were acquired during defense industry mergers in the 1990s and operate on a variety of legacy computer systems.

Each supplier of the center is responsible for the supply of a specific list of products. Procurers connect to the computer system of the relevant site, process purchase requests, and only then move on to work with another site. This connection and disconnection presented a problem. Because different departments used different computer systems, it took an average 20 minutes for a vendor to switch from one client to another. In lean language, this situation is called long changeover times. However, at that time - before the advent of the LM21 program - none of the supply workers were trained in lean manufacturing, and therefore did not call and perceive this operation as changeover time and did not think about how this affects the process as a whole.

It was not only the lengthy time of physical switching from one computer system to another that prevented MAC-MAR suppliers. It was also a matter of “resetting” thoughts (“learning curve”), which also presented a problem: the lack of uniformity of systems meant that suppliers had to constantly switch from one instruction to another, trying to remember 14 different designations for one part, etc. d.

How would you act in such a situation? The suppliers worked like this: first they processed all applications from one section and only then moved on to the next. On average, it took them a whole day to process requests from one client, and only after that they could switch to the next site. If we consider productivity as the number of orders placed per hour, it was quite high, but if we take into account the priority of these orders, suppliers placed orders incorrectly most of the time. And when there is an excess of work in progress in the system, you can be sure that, according to Little's law, the lead time will be very long.

Rice. Figure 9 shows how orders were handled before the process improvement. Having connected to one of the sites, the suppliers tried to process all the requests coming from there - both urgent and those that could wait.

Rice. 9. Fragment of the interface of the program that was used before

Due to non-standard computer systems Lockheed Martin's supply center staff could not work on multiple sites at the same time. It took them 20 minutes to switch to the next section. It is understandable that, having connected to one of the sites, they wanted to immediately process all orders before switching to the next client.

Features of the philosophy of lean manufacturing

Lean processes are characterized by:

• process efficiency over 20%;
• fixed work-in-progress limit to control speed;
• use of the "pull" system, in which new job enters processing only when the corresponding output work is transferred to the next operation;
• using visual displays of information to control and monitor the process (for example, show the status of various products or services in the process, or list additional ideas to reduce lead time).

The problem was that this process did not take into account the timelines required by other customers at all: an urgent order for site D had to wait until the supplier processed all orders for sites A, B and C. As a result, the supplier took 14 or more days of the so-called time turnover time for the client (customer turnover time) to go through the full cycle of processing applications from all customers. This led to long lead times, billing delays major projects and caused the need for overtime in production (Fig. 10).

Rice. ten. Lack of flexibility in the procurement process

Since switching from one site to another was an extremely complex and time-consuming process for Lockheed Martin buyers, the standard procedure was to process all orders from one site - urgent and non-urgent - before moving on to the next, as shown in Fig. 10. It is easy to calculate that when processing data from 14 sites, it often took 14 days or more before the supplier was ready to take the next batch of orders from the site.

Moreover, the same product, such as the Intel Pentium processor, could be ordered 14 times under 14 different internal designations (while each order could be 1/14 of the total), which increased the cost per product and increased total time waiting and delivery 14 times.

The value stream map showed that most of the delays in the procurement process as a whole were caused by the "changeover" problem, which was the main hidden time loss. It was clear that if this problem was not solved, other improvements would be useless. These conclusions were confirmed by the "voice of the client": the most important moment for customer sites, there was a faster fulfillment of purchase orders and a reduction in supply costs.

The MAC-MAR team mapped the process, determined the amount of work in progress at each stage, identified the longest delays, identified the complexity, and realized that the solution to this problem had two components:

• a program should be developed that will be compatible with the computer systems of all departments and will be able to group orders according to the types of products, displaying the summarized data together (this will avoid delays due to constant changeover when connecting to different systems);
• the structure of the program should allow suppliers to sort orders by delivery time and product types.

The result is shown in fig. 11. Instead of information on one site, now only urgent orders from all sites are brought together here. By clicking on the relevant product name, you can get information on purchase requisitions and see their history. Further transformations included expanding the range of contracted products, allowing buyers to place an order at the touch of a button (rather than reconfiguring the system to place individual orders), and many other enhancements.

Rice. eleven. Interface view after transformations

At first glance, the information on the screen does not differ much from what was originally presented (Fig. 9). However, the ability to sort orders received from all sites in order of delivery priority means that it is now possible to combine information received from different sites using different programs.

Overcoming the problems of working with different programs has increased the flexibility of the procurement process.

• Changeover time was reduced from 20 minutes to almost zero.
• The lot size is now 1 order, because the supplier does not have to switch from one area to another when placing orders.
• Cycle time, which used to be over 14 days, is now less than 1 day (if the supplier starts from site A, he can process all urgent orders and return to site A on the same day).
• WIP: Customers used to wait in line for up to 14 days, with an average wait of 7 days or 56 hours. Now the maximum wait time is 2 hours and the average is 1 hour.
• Productivity has improved - instead of serving one customer per 8-hour workday, orders from 14 customers are now processed every 2 hours (which corresponds to 56 customers per day).

Who is comfortable with this work - you or the client?

The MAC-MAR working group made other changes to the process (including expanding the list of pre-agreed conditions). Altogether, these changes resulted in a 50% reduction in procurement prices, a 67% reduction in lead times for mass-market goods (from 6 to 2 months), a nearly 20% increase in plant productivity due to on-time deliveries, and an average unit cost of materials decreased by 6.4%. This example illustrates another key insight of lean manufacturing: the speed of any process is proportional to its flexibility. Lockheed Martin's original process was very inflexible (turnover rate for the consumer was 21 days); when the process of switching between clients became much simpler, suppliers were able to significantly speed up the process.

Changeover times and batch processing in the provision of services

It doesn't occur to many that there is also changeover time in service delivery. After all, if the transition from serving one customer to serving another takes you a certain period of time or you need time to reach normal productivity, we are talking about changeover time. If you are postponing serving a client (internal or external) because it is more convenient for you to continue with the current work, then it is more convenient to process in batches. Chapter 11 explains how to eliminate these sources of process delays.

Why Lean Manufacturing Can't Do Without Six Sigma?

Lean is very effective at optimizing lead time and eliminating non-value-adding costs, yet there are some serious problems that remain unexplored even in the most advanced lean literature. Six Sigma solves these problems, which is why it is a necessary complement to Lean.

1. Lean does not contain specific culture and infrastructure prerequisites for sustainable results.

Most of the Lean sources do not address the issue of the infrastructure that is needed to successfully implement Lean projects and not only achieve the appropriate speed, but also maintain it. In fact, many companies that implement Lean willy-nilly have to develop infrastructure similar to Six Sigma infrastructure, but instead of immediately adopting the traditional Six Sigma structure, they do so only under pressure. Companies that only use Lean are often unable to implement this method throughout the organization and achieve sustainable results because they do not have a clear Six Sigma organizational infrastructure. Such an infrastructure ensures the involvement of top management in the process, allows for training, fixing the allocation of resources, etc. In its absence, the success of lean production depends only on personal initiative. I have seen many successful lean programs fizzle out when management changes. In this respect, Six Sigma is less vulnerable (although it cannot be said to be completely immune to such problems): it proceeds from the fact that the interests of shareholders should be defended first. Any book on Six Sigma deals in detail with the issue of stable infrastructure, but this issue is not addressed in any book on lean manufacturing.

2. Lack of focus on the critical important characteristics from the consumer's point of view

By requiring the identification of process components that add value, lean includes some elements of customer orientation, but its approach is introspective. The one who maps the value stream, makes a decision, considering, adds this operation value or not. In contrast to this approach, Six Sigma determines when to include the voice of the customer and the voice of the supplier in the improvement process. The most important indicator characteristics of this method are critical to the client, the means to take into account the "voice of the client" are provided in the "Define" phase of the DMAIC cycle (Define - Measure - Analyze - Improve - Control). In other words, Lean lacks the customer focus that permeates Six Sigma work.

In my experience, most people in the financial services industry are interested in Six Sigma, although they think that Lean is more appropriate in a manufacturing environment. However, after learning about lean from their own experience, they change their attitude, seeing that these methods are faster and easier. Applying Six Sigma tools requires a lot of effort.
Daryl Green, Senior Vice President, Bank One

3. Lean Doesn't Recognize the Impact of Variance

Lean manufacturing does not have the tools to reduce variance and provide statistical process control. Six Sigma considers the elimination of deviations a key factor and offers a wide arsenal of tools for dealing with deviations (from statistical process control to experimental design). As mentioned above, 10% defects can lengthen lead times by 38% and increase WIP by 53%. In other words, the speed and cost savings achieved through lean manufacturing can be offset by increased variances!

Rising defect rates are not the only source of variance, which leads to increased WIP and lead times.

“Who needs lean manufacturing? I don't have time to change!"

Most service providers believe there is no changeover time in their operations. They associate it with dead zones during the transition from the manufacture of one type of product to another in production. However, there is usually a learning curve in the process of switching from one task to another before performance peaks, as we saw with Lockheed Martin's MAC-MAR Supply Center. Such a learning curve is shown in Fig. 12.

Rice. 12. Learning Curve Costs and Performance

An employee remains "attached" to each task for 20 minutes, despite current customer demand requiring that task be completed within 5 minutes. This is analogous to the situation at Lockheed Martin, where the supplier was "bound" to one client all day long, and the number of "tasks" in front of him was 14, corresponding to the number of sites (tasks A to N). In this case, the total order time is quadrupled. The application of lean manufacturing methods can significantly reduce the time taken by the learning curve.

Bottom line: Anything that lowers productivity leads to longer lead times, as people stay locked into the same type of task for longer than current consumer demand requires. Using lean manufacturing tools can significantly reduce lead times and minimize the impact of changing activities on productivity. One of the main sources of the learning curve is complexity, that is, the variety of tasks performed. The more quantity different tasks the less often they are repeated, the steeper the learning curve. Therefore, by reducing complexity, Lean Six Sigma solves the learning curve problem.

Variations in demand and time spent on operations to create products have a significant impact on lead time, while lean manufacturing does not imply a direct impact on these factors. This connection is illustrated in Fig. 13, which depicts the results of one of the stages of the procurement process described above at Lockheed Martin.

Rice. 13. Impact of deviations on waiting time

Let's imagine that Bob spends on average 16 minutes on a certain task. However, due to variability in 68% of cases (one standard deviation), the total time can deviate from the average in one direction or another by 8 minutes, in which case the deviation factor will be 8/16 = 50%. Now suppose that a similar variance has Bob's employment. As can be seen from the figure, if Bob is loaded to 90% of his capacity, the work he is doing will wait in line for an average of 60 minutes, which accounts for about half of the waiting time in line. If Bob encounters a particularly difficult problem, this time can increase to 100 minutes.

Deviation has little effect on processes that are running with a large margin of throughput (left side of graph). But the vast majority of service organizations operate near capacity limits, which is when variances have the greatest impact on how long a job (or customer) has to wait "in line." Processes involving direct contact with the consumer are often subject to high demand variances, since we cannot control the actions of the consumer, who chooses the time of contact at his own discretion. What is the conclusion? The higher the deviation at the input, the greater the bandwidth reserve should be provided. If the deviations are small, or we can control demand in some way (which is more likely in the case of internal processes), we can work with increased load without the risk of significant delays. When I first presented this analysis to Lockheed Martin, Manny Zulueta, Vice President of Lockheed Martin's MAC-MAR Supply Center, said, "This confirms our observations!"

The impact of demand fluctuations on waiting times is greater the higher the percentage of capacity used by the process (as seen from the steep slope of the curve on the right). The more significant the deviations, the stronger this influence.

Lean also needs DMAIC

Most Lean descriptions start problem solving from the Improve stage, bypassing the Define and Measure stages. Because the Define stage identifies the scope of the problem, and the Measure stage seeks to quantify it and relate it to resources, people often bite into a portion of Lean that they can't chew or get lost in the confusion. miscellaneous improvements.

Why does Six Sigma need Lean Manufacturing?

There are gaps in Six Sigma, as there are in Lean methods. Let's take a look at what six sigma deficiencies can be addressed by lean manufacturing.

The general idea is that, as the practice of many companies has shown, using Six Sigma can achieve a lot. But there is one difficulty. Whatever tool you choose, if there is no lean component in it, if you do not pay attention to increasing speed and reducing WIP, all your achievements will sooner or later come to naught. The process will remain slow and laborious, and the costs will be prohibitive. There are five reasons why Six Sigma needs Lean Manufacturing.

1. Identification of losses. Although process mapping is one of Six Sigma's tools, it does not collect the data (including changeover time, unit turnaround time, transportation, etc.) necessary to numerically describe the process steps and identify activities that do not add value and increase the cost of the service/product. Lean manufacturing has a powerful tool in its arsenal - the value stream map, which overcomes barriers between functional units and allows you to identify waste and delays. Six Sigma rarely looks at activities from a value-adding perspective and does little to eliminate non-value-adding activities. First of all, the Six Sigma protocol prescribes the elimination of deviations, and only if this turns out to be impossible, design according to the Six Sigma criterion (DFSS) is carried out. Lean manufacturing assumes that process reengineering (to eliminate non-value-adding activities) is necessary to some degree in all cases below 10%.

2. Increasing process speed and cycle time. Cycle time and responsiveness optimizations are often considered the result of Six Sigma. However, Six Sigma experts do not link quality and speed either practically or theoretically, nor do they set a limit on the amount of work in progress required in the "pull" system (this operation is needed to make lead time a controllable parameter with limited deviation). The volume of work in progress is the most important factor in cycle time (according to Little's law). If you do not limit the amount of work in progress to the maximum allowable limit, reducing cycle time will remain a dream.

Loss of a client

One of the most significant losses that Lean does not take into account is the loss of a customer. You are missing out on customer-related revenue, and the cost of acquiring a new customer is typically much higher than selling the same amount of service or product to an existing customer. In fact, all the waste that Lean explicitly defines is internal to the process, not external. It can be shown that eliminating these internal losses greatly reduces the chance of losing an external customer, because you are delivering services quickly, without loss, and at minimal cost. However, you can waste a lot of time and effort delivering a service that the customer doesn't want, and so Six Sigma takes a more constructive approach to addressing the "voice of the customer" and defines customer loss as a defect.

3. Tools to improve speed. Six Sigma tools rarely include Lean tools such as Total Machine Maintenance (TPM), Value Over Time, 5S, and others. These highly effective speed tools have been developed and refined over decades of practical application. Of course, in order to adapt them to the service sector, some effort is required, but neglecting them, you will not achieve maximum process productivity.

4. Methods for obtaining quick results (kaizen process, DMAIC). Lean manufacturing has a kaizen method of rapid improvement. It is a short-term, intensive project, when a group of people with relevant knowledge, within four to five days, purposefully and systematically improves the chosen process or activity. The effectiveness of such events is extremely high, the need to quickly achieve tangible results gives a powerful impetus to creative thinking. As you will learn in this book, kaizen plays a prominent role in service delivery, although the method often requires some modification. Having an operational improvement method in your arsenal provides an excellent catalyst for DMAIC projects. Lean's action-oriented approach results in faster results.

5. Six Sigma quality is achieved much faster after the elimination of non-value-adding steps in Lean. The Six Sigma Research Institute has compiled a table (Fig. 14) that explores the total impact of defects on the real throughput. For example, consider an invoicing process that includes 20 transactions, each at level 4a (99.379% yield). The total real throughput will be (0.99379) 20 = 88%, which is quite typical for service delivery processes. This low yield creates problems with accounts receivable and necessitates money grabbing and reprocessing.

Rice. fourteen. Real Bandwidth

This table clearly shows that it is very difficult to achieve high quality processes with a large number of operations, and, conversely, low quality affects a complex process much more. The most effective way to achieve Six Sigma quality is to simultaneously improve quality and apply Lean principles to eliminate non-value-adding process steps.

The use of lean manufacturing tools allows you to quickly (at most in a few weeks) get rid of non-value-adding activities, most likely there will be at least half of them (10). Thus, now, instead of 20 stages of invoice processing, only 10 pass. It is clear that even without additional quality improvement measures, a 10-stage process has a much lower probability of errors than a 20-stage process.

In this case, the real throughput increases to (0.99379) 10 = 94%. Higher output will increase the return on your improvement investment, and more importantly, the speed of the process will double, allowing you to not only deliver your services to the customer faster, but also increase the rate of return on your quality tools by doubling their effectiveness.

By combining Lean and Six Sigma, you can not only reduce the number of operations, but also increase the quality level of the remaining operations to, say, 5a, which will increase the real throughput to (0.99976) 10 = 99.8%.

A challenge for Six Sigma proponents

The question sometimes arises: is it better to start with Six Sigma process optimization (without eliminating non-value-adding steps) or eliminate non-value-adding steps first using Lean manufacturing methods and only then move on to Six Sigma process optimization. Some Six Sigma proponents believe that lean manufacturing practices (such as the "pull" system) should be applied after the process has become controlled and optimized. However, this point of view is easily challenged: “Would using lean manufacturing and a “pull” system that will allow you to control speed and reduce cycle time hurt the implementation of Six Sigma?” In fact, using the arsenal of Lean and Six Sigma tools at the same time will have the most beneficial effect on the culture of the enterprise. Projects should be selected based on their impact on improving ROIC, not on the set of tools needed to solve the problem - the one that Lean offers or the one that uses Six Sigma.

Merging Lean and Six Sigma to Improve Services

It is known that Lean Six Sigma is a powerful tool for implementing top management strategy and a tactical tool that allows managers of independent departments to achieve annual and quarterly goals. If management stays away from the Lean Six Sigma program, the company will most likely have to give way to competitors where leaders have added these methods to their arsenal.

Merging the fundamentals of Lean and Six Sigma allows us to formulate five "laws" that guide the direction of improvement efforts. Below are the first four (we started their numbering from 0, since this law is the basis for the rest).

0. Law of the market. Quality-critical issues from the customer's point of view are the top improvement priority, followed by return on invested capital (ROIC) and net present value (NPV). We call this law the Zeroth Law because it is the foundation for the others.

1. The law of flexibility. The speed of any process is proportional to the flexibility of that process (see Figure 10).

2. The law of focusing. 20% of all operations are responsible for 80% of delays in any process.

3. Law of speed. The speed of any process is inversely proportional to the amount of work in progress (or the number of "objects" in work). Little's law states that the number of items in a process increases due to long setup times, rework, demand and supply variances, time, and complexity of the product being offered.

4. The law of complexity and costs. Typically, the complexity of a proposed service or product increases non-value-adding work and work-in-progress by more than poor quality (low sigma) or slow speed (lack of lean).

History of success. New Lockheed Martin Traditions

Lockheed Martin was formed as a result of the merger of Lockheed and Martin-Marietta (one of a number of mergers) in 1995, so formally this enterprise is about seven years old. But ask the people who work here, and they'll tell you the company feels even younger because as recently as two years ago, most employees were closely tied to their former organizations, and Lockheed Martin was more of a heterogeneous group of 18 corporations than unified education.

Two years ago, the LM21 Operational Excellence program was born, based on Lean Six Sigma. According to Mike Joyce, vice president of LM21, it was this method that became the consolidating beginning for the company, which helped employees learn how to work together on common goal. Below is how they achieved this.

Business idea

The success of Lockheed Martin is largely determined by inventions, major scientific and technological achievements and quality of workmanship. This explains why so much of the improvement effort is in service delivery: development, procurement, engineering, lifecycle support, hiring, billing customers, legal support etc. Procurement is also a service that comes to the fore, since about 50-60% of the costs for each type of product are purchased or subcontracted.

As Joyce says, “It would never have occurred to us to equip new fighters with 1975-style radars, but nevertheless, it seemed quite acceptable to us that 1975 business processes were used in our supply chain. We need not only to develop a new radar, we must thoroughly work out the process of creating this radar.”

The government has contracted Lockheed Martin to do what the company defines as "software development" - developing custom software solutions to meet specific customer needs. The company says: Scientific and technological achievements and innovative solutions are part of our daily work.” No wonder 50,000 out of 125,000 employees at Lockheed Martin are scientists and engineers.

The issue of tradition at Lockheed Martin was a very important factor. Lockheed Martin incorporated former divisions from a wide range of companies, including General Dynamics, GE, IBM, Goodyear, Westinghouse, Loral and Ford, each with its own heritage. The combination of 18 different companies meant 18 different computer systems, 18 different product numbering systems, 18 different approaches to sourcing, 18 ways of making specifications, hiring employees, paying bills.

What's more, every company had a different history of quality improvement: quality circles, statistical process control (SPC), continuous streaming, six sigma, TQM, lean manufacturing. Consequently, Lockheed Martin's improvement strategies were, on the one hand, to give people the opportunity to be proud of the traditions of their company and continue them, and on the other hand, to ensure coordinated teamwork.

Movement towards this goal began in 1998, when the management of Lockheed Martin realized that the new enterprise had huge resources of quality and craftsmanship. They rolled out a program called "LM21 - Best Practices" to bring their knowledge and experience to the entire company.

Mike Joyce, Vice President of the LM21 Program (Lockheed Martin's Operational Excellence Program), Manny Zulueta, Vice President of the Material Acquisition Center - Mid Atlantic Region (MAC-MAR ), James Isaac, Director of Supply Chain Improvement, Northern Material Acquisition Center, and Miles Burke, Certified Black Belt and Supply Chain Improvement Manager.

Lockheed Martin employs 125,000 people worldwide in four core areas: Aeronautics, Space Systems, Systems Integration and Service Technology.

While sharing best practices was a good start, it had its drawbacks:

• what is "the best"? In the current business environment, the pace of change is accelerating. By prioritizing best practices, you can lose sight of the losses and opportunities for improvement in the enterprise as a whole;
• people can become complacent. Lockheed Martin strives to ensure that every employee feels the urgency of continuous improvement and never think they have reached perfection. “The best” is a transient concept;
• the system of "best practices" was too flexible. At first, factories and other departments decided for themselves which of the best methods they wanted to use. “But when Lockheed Martin makes a product, it has to mean something in terms of quality standards,” says Joyce. - We can't let our divisions refuse to improve quality, saying, for example, that they are interested in best practices for business development. Quality and speed are a must for everyone.”

The LM21 program covered all departments of the enterprise, it extended to all types of work and was aimed at increasing productivity and efficiency.
Manny Zulueta, Vice President, Material Acquisition Center

So two years later, the priorities of the LM21 program shifted from focusing on best practices to excellence in performance, with the goal of the main objective- ensure that processes operate lean with six sigma quality.

“This covers the entire Lockheed Martin system in operation,” says Joyce, “everything we do from customer invoicing and purchasing to product development and hiring people.” New Approach LM21 is based on the principles of Lean Six Sigma: all work is carefully analyzed, value-adding operations and waste are identified, which are eliminated, and the remaining operations are improved. More importantly, LM21 is not perceived as something outside or external to the organization's activities. “It's a strategy that helps managers achieve huge year-over-year goals and put in place processes to deliver sustainable long-term results,” says Joyce. "It's up to each and every one to do their job and improve the way they do it."

Preparation and deployment

Integral part Deploying the LM21 program at Lockheed Martin is a critical part of a Six Sigma infrastructure. Among them:

1. Undoubted and clear support from senior management and their participation in the program

CEO Lockheed Martin Vance Coffman has publicly announced his support for the LM21.

2. Top management trained in Lean Six Sigma concepts and how to apply them

Coffman and his entire executive committee completed a four-and-a-half-day training session (two and a half days of classroom work and two days of hands-on work on process adjustments). This course included:

• Lockheed Martin's 5 Principles of Excellence (see sidebar);
• a half-day session on Defining Value from the Customer's Perspective, including a roundtable discussion with customers giving their opinion on whether Lockheed Martin is a good fit;
• study of value streams and process flows, including simulation modeling for systems development;
• structured problem solving practice.

Lockheed Martin's Five Principles of Excellence

Mike Joyce says it was important for Lockheed Martin to predefine the principles of excellence, as they serve as criteria for choosing the approach to get the job done. These principles include elements of both Lean and Six Sigma.

1. Understand what is of value from the customer's point of view. The client appreciates you not only for what you give him, but also determines whether it is convenient for him to do business with you. Everyone should understand what is the value for his client. Understanding this question correctly is the first step, because it allows you to classify any work as either adding value or waste. If you misunderstood value, then all subsequent work will be a waste!
2. Understand what value streams are. The manager must know in detail in which departments of the organization the product or service is being created. There is no room for guesswork here: you should write it down, documenting each step, and be prepared to answer questions like: “When we observed this in last time? Where are these observations?
3. Deeply understand the flow of work. Engineers often talk about the "top of the pyramid of requirements" - the most important need that a product or service must satisfy, and it is this need that dominates everything else. When perfection is achieved, the top of the pyramid of requirements is the design of systems that optimize the flow of data and the flow of "molecules". If you don't optimize the flow, you won't achieve optimal efficiency.
4. Prioritize cycle time and pull. The goal is to reduce turnaround time to an absolute minimum so you can instantly respond to changing customer needs.
5. Strive for perfection. For Lockheed Martin, this means Six Sigma quality at the speed of Lean manufacturing.

Leadership training has two other important aspects:

• At first, many members of Vance Coffman's team were unenthusiastic when they learned that they would have to set aside four and a half days in their schedule for training. In one of their meetings, Mike Joyce asked them, "How many of you have been trained in this way of thinking?" Of the 20 people, only two raised their hands (one was familiar with Six Sigma, the other with Lean Manufacturing). At the time, Joyce said that if this team was going to lead the company's implementation of Lean Six Sigma, they should know what they were talking about. After completing the training course, management representatives unanimously declared that it was the best training for all the time of their work. As Joyce himself said: “We were not going to make black belts out of them or to radically change the process in two days. But we hoped to provide momentum that would help them move in the right direction and support the LM21 program”;
• Lockheed Martin's top management team was trained in Lean Six Sigma within their departments, not in isolation. The question arose: "Why?" As Joyce responded, “Ultimately, everyone in the company needs to be involved in the LM21 program. So instead of training all of you together, I want you to be trained along with your staff in a work environment. Let everyone see that the leadership is determined to carry out this program.”

3. Management at all levels received basic training

When the training was completed by a team of senior managers, the basic course was required to master all Lockheed Martin employees who are included in the material reward system. In a given organization, this referred to anyone who held a directorship or more high position. This five-day lean training was organized within the divisions and delivered in groups of 50 until all 5,000 managers completed it. (Now the program has expanded to include customers and supplier leaders, who have been trained in ways to get results quickly.)

4. Implementation started with value stream mapping

From a strategic point of view, the starting point for Lockheed Martin was to map the value stream at the program level, since it is at this level that cross-functional stream optimization takes place (a program is a set of processes that is used to provide a specific customer with a product or service). The value stream map reflects the current state of affairs, that is, it shows what is happening in the workplace. Value stream maps provide an opportunity to evaluate operations based on the principles of excellence: are you creating value in the mind of the customer? What are your omissions? What can you do to overcome them?

5. They continue to build stable infrastructure

All employees are involved in improvement projects and undergo just-in-time training. LM21 projects rely on an internal workforce that includes Black Belts, Green Belts, sponsors and what Lockheed Martin calls Subject Matter Experts (SMEs).

• The primary responsibility for identifying and selecting projects rests with line management (eg, departmental managers), who often act as project sponsors. They are usually the owners of the process, that is, they are responsible for maintaining and improving the process.
• The Subject Matters are a group of 20 experienced professionals who report directly to Mike Joyce. In this sense, they are like Six Sigma champions in other organizations, but at Lockheed Martin they play much more important role. These 20 professionals come from different functional areas: business operations, cash control and regulation, supply chain management, production management, development, human resources, customer relations, logistics management, software management, etc. Their main goal is to study everything related to LM21 in a short time and promote the rollout of the program in each site and in each functional unit. Their mission is to act as catalysts for the process at Lockheed Martin's 36 sites and ensure that operations in these locations are carried out in line with the corporate methodology and meet established standards.
• Lockheed Martin has set itself the goal of training 1% of its employees to become certified Black Belts (certified means that they have completed a course of several weeks, completed a number of projects and are Green Belt mentors, helping the sponsor and administration of LM21).
• Anyone can take a 40-hour training course to become a "green belt". The Green Belt is required to do only one thing: after training, he must lead a team working on a project to achieve cost savings. To date, 43 out of 160 employees of the system integration group at the Material Acquisition Center have completed such training, 32 of them have certificates.

6. Their methods are a fusion of Lean and Six Sigma.

The LM curriculum and improvement methods are a combination of Lean Six Sigma core tools and principles, such as DMAIC methodology, identifying the seven wastes (a Lean tool), process mapping, working on cycle time reduction, etc.

7. At the first opportunity, they took on the suppliers.

“Like most manufacturers, we have always paid great attention to the control of incoming materials, making sure they meet our technical requirements and engineering documentation,” says Manny Zulueta, vice president of Lockheed Martin's Material Acquisition Center. “Then we rolled out five or six programs where we worked with major suppliers to implement Lean and Six Sigma in their factories to make them better suppliers... And we got the materials coming in almost flawless. Now, when we receive the material, we just need to make sure that it has arrived in the right quantity, have a quick check of its condition, and then we can send it to the warehouse.”

Supplier collaborations range from Lockheed Martin's Lean Six Sigma training to supplier staff to workshops where suppliers can share experiences.

However, the possibilities of such cooperation are not unlimited. With thousands of suppliers, Lockheed Martin cannot do this with all of them. “We identified a set of criteria that allow us to determine how important a particular supplier is to us, weighed all the pros and cons, and evaluated them using a system of quantitative indicators,” explains Zulueta. - We took into account the following factors: how well suppliers meet our requirements, whether they have technologies that are important to us, to what extent their work affects the quality of products, etc. We have compiled a list of about 200 top suppliers that we all want to work with ".

“The secret to partnering with suppliers,” says Zulueta, “is a close relationship with the management of the supplier company. Everything works if we manage to get involved top management, because we believe that he must necessarily be engaged in the transformation of processes. Usually such work with the supplier takes several months. We cannot do without the support of senior management. If the president of the company, CEO or general manager is not interested in it, most likely the business will end in failure.

Lean Six Sigma Experience Helps Advance

James Isaac is an example of how the LM21 program is being used for leadership development. He is now director of supply chain improvement at MAC-MAR, a position he assumed in the spring of 2002. Prior to that, he worked for two years in the role of "specialist in the subject area." “We received a very thorough training,” says Izak. “At the same time, we received personal training in management skills, participating in the work on successful projects and improving productivity.”

Before Isaac was appointed to his current position, he was only indirectly involved in supply chain management. “Before I became a specialist, I worked with Lockheed Martin as a systems engineer for 18 years,” he says. - It was very interesting to look at the design from the point of view of the supplier. Now I look at what is happening with the developments that I used to do myself, with completely different eyes.

results

Today, the LM21 program brings together more than 5,000 projects, more than 1,000 of which are carried out in the field of business operations (management, financial management, closing deals, supply, etc.). The original goal was to reduce costs by $3.7 billion over four years - in fact, the cost savings are closer to $4 billion. As Mike Joyce noted, in an organization of the size of Lockheed Martin, it is difficult to argue that all this is the result of LM21, however the attention paid to perfection is undoubtedly one of the most important factors. Other business indicators are also improving: the company has a record number of orders; liabilities have fallen significantly from their level at the time of the merger; the annual cash flow is in the billions. These changes, many of which are in the service industry, have enabled Lockheed Martin to create cruise missile a new generation with the same capabilities as other products, but at half the cost and three times the cycle time. All lean manufacturing metrics at the departmental and individual project levels have improved significantly. Many processes have seen significant reductions in handovers, resulting in faster cycle times and more complete satisfaction client.

Similar results are visible in the field production activities non-core character, which is engaged in Lockheed Martin. Comparable rates of acceleration and cost reduction were achieved by the Naval Electronics and Surveillance Systems group (naval electronic systems and Surveillance Systems), which provides products and services to combat fleets around the world, including advanced shipborne combat electronic systems in combination with communications systems. These results are reflected in the ability of Lockheed Martin in relation to new orders. For example, the company was recently selected as one of the prime contractors for Deepwater, the most ambitious US Coast Guard program ever.

Billions of dollars have been committed to this Naval infrastructure overhaul program, and Lockheed Martin will lead its implementation. As the company begins its 20-year program, the Lean Six Sigma toolkit is widely used to define customer value and identify critical customer requirements through Six Sigma design and close relationships with new vendors. .

Grow your business

According to Mike Joyce, it's important that management doesn't equate "waste elimination" with "laying people off."

“The goal of LM21 is not to fire people after we eliminate waste, but to improve our operations and provide people with value-adding work without letting them waste their energy,” he says. “By eliminating losses, we can offer the client a better deal, which will allow us to develop our business.”

Like any other company, Lockheed Martin admits it cannot guarantee lifetime employment. But working under the LM21 program expands the company's ability to win major new contracts. Employees who participate in LM21 trainings and projects acquire skills that enable them to better serve customers, which means that their chances of long-term employment with the company increase. “The client provides us with work,” says Joyce, “so ultimate goal everyone and everyone is stable employment”.

Challenging tasks

Imagine how difficult it is to get 125,000 people to think and work in a new way, and you will appreciate the work done by Lockheed Martin. The company has set a goal - 60% of employees (about 70 thousand people) by 2004 must either take a week-long training course to receive a "green belt" or take part in a week-long project. Meanwhile, the company is actively engaged in the compilation of value stream maps for all implemented programs (their number is 2000). Among other tasks:

• increased demands on program managers.
  Until now, most program managers have been required to do one thing - to provide the client with what is stipulated in the contract: “Here are the costs, and here is the work schedule. Ensure timely delivery." Now they are being told that this is not enough: they must not only meet cost commitments and stay on schedule, but also care about improving the way they work in the program they are responsible for. “It's like changing the rules in the middle of a game,” says Mike Joyce. - We want to make sure that they have the knowledge and tools that will allow them to be at the level of increased requirements”;
• synchronization of work of all departments of the enterprise.
  Suppose Lockheed Martin focused solely on streamlining manufacturing operations and made them the epitome of lean manufacturing: fast, efficient, just-in-time, without unnecessary investment in inventory. However, all this work will go down the drain if the planning department continues to process orders in batches or if the supply does not eliminate the shortage, and the suppliers do not provide the required quality or improve the design. Problems of this kind can affect the performance of any organization that does not adhere to a systematic approach to work, making sure that the pieces of the puzzle add up to a single picture. Keeping track of all of these things helps companies avoid the classic state of constant failure that limits the return on investment in Lean Six Sigma;
• convince people they can't do without Lean Six Sigma.
  Your attempt to bring Six Sigma, and especially Lean, to the service industry is likely to be met with one of two replicas (and both are well known at Lockheed Martin). First: “This does not suit us ... This has nothing to do with software. legal services. to (fill in yourself). Second: “You see, we have already tried this. We did this ten years ago. It doesn't make any sense." To these objections, Mike Joyce replies, "Okay, let's watch your process and find out what's really going on." He invites people to independently go through the entire process that the document goes through, observe what happens, and collect data on the current state of affairs. People are invariably amazed by their discoveries. and begin to realize that they have plenty of room to improve quality, speed, and reduce costs!

This data is correct for a normal distribution. It should be borne in mind that not every process is characterized by a normal distribution. More about statistical process control: Wheeler D., Chambers D. Statistical process control. Business optimization using Shewhart's control charts. M. : Alpina Business Books, Alpina Publishers, 2009. Approx. scientific ed.

More on Lean Terms: An Illustrated Glossary of Lean, Ed. C. Marchvinski, D. Shuka. - M.: Alpina Business Books, 2005. Approx. scientific ed.

Read more about value stream maps: M. Rother, D. Shuk. Learn to see business processes. The practice of building value stream maps. - M.: Alpina Business Books, 2005. Approx. scientific ed.

It should be borne in mind that D. Womack and D. Jones, who “formalized” Japanese “lean manufacturing” for Americans in the early 1990s, start with customer value as one of the central ideas of the entire concept of lean manufacturing. Note. scientific ed.

Extremely popular among the Japanese (and, first of all, at Toyota), control charts - the main tool for reducing variability - arose long before the concept of six sigma. Accordingly, it is difficult to agree with the author that lean manufacturing (Toyota production system) does not have such tools. In general, no improvement in quality is possible without a reduction in variation. Note. scientific ed.

Developed based on the work of James Womack, author of books such as The Machine that Changed the World and Lean Thinking : Alpina Business Books, 2005). Note. scientific ed.

Lean in the Perform methodology is a comprehensive system aimed at improving customer satisfaction and team performance.

The main benefits for the company are increased efficiency and competitiveness

• Efficiency increase by 20% (on average), incl. through performance
• Improving the quality of services provided and increasing customer satisfaction
• Strengthening teamwork, increasing the initiative and involvement of staff
• Staff development and professional growth
• Additional increase in business efficiency by 5-6% annually

Whiteboard meetings promote focused discussion of employee workload and continuous improvement

Visualization boards serve as "dashboards" that reflect the effectiveness of the team, incl. qualitative and quantitative KPIs

Visualization board key blocks:

• Individual and team performance
• Problems and Ideas
• News
• Command section

whiteboard meeting– a focused discussion that creates a single information space for an interactive discussion of the results of work and opportunities for improving efficiency

• Carried out by the team on a regular basis
• All team members actively participate in the meeting, the rotation of moderators is observed
• Duration – 15 to 30 minutes
• Motivates and energizes the team

Kaizen session- a tool for structured solving complex cross-functional problems and generating ideas - structured brainstorming aimed at developing solutions to existing problems, as well as identifying new hidden problems. It is characterized by a strict sequence of actions and a wide range of tools used, the session is controlled by the moderator.

LEAN production concept

concept LEAN production(“lean manufacturing”) was formed at Toyota in the 1950s. In the sixties, Toyota triumphantly broke into the car market: Japanese cars turned out to be both better and cheaper than American ones. Then the LEAN concept was also interested in other industries: energy and trade, services and healthcare, the army, and later in IT.

The essence of LEAN is to do everything possible to really understand the requirements of the client and gradually remove everything unnecessary that does not bring value to him. That is, do this:

6 Sigma concept

The 6 Sigma concept was developed by Motorola in the 1980s to reduce variance in the manufacturing of electronic components. The name of the project is based on the Greek letter "sigma", which denotes the statistical concept of standard deviation.

In the conditions of an unstable and volatile economic situation, more and more attention is attracted by management methods, including production, aimed at overcoming crisis phenomena and increasing the efficiency of enterprises at the expense of internal resources. Among the advanced approaches aimed at improving the performance of any enterprise, the concept of "Lean Production" (or Lean-system) stands out. The introduction of the principles of the Lean-system allows you to bring any company to a qualitatively higher level: it helps to find ways to optimize business processes by eliminating losses and inefficient operations at all stages of the production process, to identify sources for further growth.

Lean Six Sigma- an integrated concept that combines the most popular quality management concepts in the 90s of the last century: the concept of " Lean manufacturing, focused on eliminating waste and overhead, and the concept of "Six Sigma" (Six Sigma), aimed at reducing process variability and stabilizing product characteristics.

The Lean Six Sigma model is a combination of two popular approaches abroad. The central theme of the Lean concept is customer value. Its ancestor was the Japanese corporation Toyota, where lean manufacturing methods were formed back in the middle of the last century. Within the framework of the Lean model, any activity is classified into operations and processes that add value or neutral. The first group develops, the second is considered as losses and eliminated. Popular Lean solutions are, for example, 5S (five simple steps to create a quality work environment to increase productivity), kanban (a system built on the principle of "just in time", that is, with minimal inventory), kaizen (a focus on continuous improvement at each stage of value creation), TPM (total care behind the equipment).

The concept of Lean Six Sigma has a wide scope and can be used by any enterprise, regardless of size and field of activity.

The period of formation of the concepts of "Six Sigma" and "Lean Manufacturing" falls on the mid-80s of the last century. At that time, in the field of production, the highest requirements were set for product quality and resource saving. The concept of "Lean Manufacturing" was created as a cost optimization methodology in the automotive industry. The concept of Six Sigma owes its birth to a program to combat defects in finished products by reducing the variability of processes in the manufacture of semiconductors. It is only natural that the pioneers in applying these concepts were manufacturing enterprises. The stages of development of the concepts of "Six Sigma" and "Lean Manufacturing" repeat the stages of development of standards for quality management systems (QMS). The progenitors of the most used QMS standards in the ISO 9000 series were standards containing quality assurance requirements for military industry, later - for the automotive and mechanical engineering.

Six Sigma is a process optimization methodology based on mathematical models. It was formed at Motorola, but became widely known after being adapted for General Electric. The name comes from the statistical concept of standard deviation, denoted by the Greek letter σ - sigma. The maturity of the production process is assessed by calculating the yield of defect-free products. The lower the index, the more stable the production. It is believed that the highest level of Six Sigma gives no more than 3.4 defects per million operations.

For some time, the concept of Lean and the Six Sigma methodology, developing in parallel, competed with each other, finding their supporters and opponents. Many companies use a comprehensive version of Lean Six Sigma. After all, an integrated solution allows you to get economical effect both by reducing losses and by building stable and controllable processes.

The beginning of the 90s of the last century can be characterized as a time of active use of standards for management systems and the concepts of "Six Sigma" and "Lean Manufacturing" in non-traditional areas for them. Increasing competition pushed service and intellectual product producers, state and public organizations to find new ways to maintain and increase demand. From the point of view of consultants, the prospects for adapting the standards and concepts of quality management to the needs of enterprises in these areas were extremely wide. For example, at present, 80% of the gross national product is produced in the service sector. Having undergone repeated testing at enterprises in both manufacturing and non-manufacturing areas, the concepts of Six Sigma and Lean Manufacturing have gained universality. As a result, the name "Lean manufacturing" - "Lean production" - was transformed into "Lean" - "Lean management". By the mid-1990s, the concepts of Six Sigma and Lean Management had become one of the most sought-after directions in the consulting business in quality management.

The ratio of "the number of successful implementations" to the "total number of implementations" is higher in comparison with other methods and concepts of quality management. In addition to subjective success factors due to the efforts of training centers and consulting firms, there are a number of objective factors. With regard to the Six Sigma concept, the most significant one stands out among the success factors - high organization. High organization is one of the most distinctive features American business, which is expressed as follows:

• all activities are carried out within the framework of projects, each of which has established goals, deadlines, budget, allocation of responsibilities and authorities, requirements for identifying risks, maintaining records, etc.;
• the requirements for the knowledge and skills of the personnel involved in the projects are clearly defined and classified into categories (“black belt”, “green belt”, etc.);
• the progress of each project is regularly monitored using an established system of measurable indicators - "metrics".

There are several success factors for Six Sigma. The procedure for its implementation is formulated in the American Quality Engineer's Handbook as "identifying, selecting, and executing projects." The greatest attention is paid to the choice of projects, which must be justified both from the point of view of the greatest economic feasibility, and from the point of view of the possibility of implementation in practice. It is interesting to note that a specialist with a “black belt”, despite the nature of his work, has all the advantages of an external consultant, namely:

• he is independent and can make impartial assessments and judgments;
• he is not perceived by colleagues as “one of us”, his opinion is listened to as the opinion of an expert in matters of quality improvement;
• The reputation and further career of a Black Belt specialist is completely determined by the success of the projects implemented by him within the framework of the Six Sigma concept, which explains his high level of motivation.

Specialists with a "black belt" can be hired on a part-time or full-time basis. To evaluate the results of their activities, “lower and upper limits of admission” are set - for a year of work, a specialist of this category, hired on a full working week, should bring the enterprise savings from $500 thousand to $1 million. Going beyond the lower limit of tolerance means a mismatch of qualifications, exceeding the upper limit is unlikely. The Lean Management concept, which was first formed in Japanese enterprises, has other success factors. High organization is no longer a factor in achieving success, but a result. The achieved high organization of processes (both main and auxiliary) allows the enterprise to save a significant amount of resources. In addition to the fact that the concept of "Lean Management" implies fundamentally new approaches to the culture of management and organization of the enterprise, it also offers a set of tools that make it possible to reduce the cost and speed up processes. The main tools are already well known to quality specialists: just in time (just in time), 5S, kaizen (the concept of continuous improvement), value stream management (value stream management), poke-yoka (error protection method), etc. In this On the list, practitioners identify "value stream management" as one of the most effective tools in achieving the goals of the "Lean Management" concept.

The concept of "Six Sigma", which has American roots, is related to the Japanese concept of "Lean Management" by mutual interest in a single process. This significantly distinguishes them from many "venerable predecessors" focused on universal coverage, and makes them related to new generation concepts such as "business process reengineering". The concepts of Six Sigma and Lean Management complement each other perfectly.

The concept of "Lean Management" does not establish requirements for the form of implementation of the concept and the infrastructure required for this. Therefore, the success of Lean Management largely depends on the initiative and organizational skills of managers, but when managers change, everything can collapse. Lean Management lacks formal commitment from top management, formal learning, planned resource allocation, success tracking with corrective action, etc.

The Lean Management concept is not focused enough on consumer needs. Their satisfaction is not directly related to its main goal - the elimination of losses and unproductive costs. In the Six Sigma concept, the focus on consumers is a key element. This is confirmed by the fact that all the main metrics of this concept are based on tracking the relationship of process parameters and product characteristics with specifications set by consumers. The key principle of the Six Sigma DMAIC concept begins with the definition of consumer requirements: Define - define, Measure - measure, Analyze - analyze, Improve - improve, Control - manage.

In the Lean Management concept, defects and inconsistencies are recognized as one of the main sources of losses in the enterprise. At the same time, it does not consider statistical process control methods to eliminate waste. The concept of "Lean Management" is not focused on finding sources of process variability and ways to reduce variability, which is one of the main elements of the Six Sigma concept.

Defects, the main target of Six Sigma, are just one of the many types of waste in enterprises. In the classical theory of the Lean Management concept, seven types of losses are identified: overproduction, waiting, transportation, non-value-adding activities, stock availability, movement of people, production of defects. Many authors highlight additional types losses. For example, "false economy", which consists in the use of cheap and low-quality raw materials and materials, "diversity" as a result of the use of non-standardized elements in processes.

The Six Sigma concept does not draw parallels between quality and customer satisfaction, on the one hand, and the duration and speed of processes, on the other. At the same time, the duration of the process is directly related to customer satisfaction in the provision of services, and for production processes - with frozen funds in the form of stocks that are on standby. In the Lean Management concept, the analysis of time as one of the main resources of the process is a key area.

The set of tools of the Six Sigma concept limits the possible range of tasks to be solved. Process improvement within the framework of the Six Sigma methodology is carried out mainly by reducing the variability of processes by statistical methods and redesigning processes using the DFSS method (Design for Six Sigma - designing for the Six Sigma concept). The Six Sigma methodology misses opportunities for process improvement such as reducing unproductive activities, reducing waiting times, reducing inventory and transportation costs, optimizing jobs, etc. All of these opportunities are fully realized by the Lean Management concept.

The filling of the "gaps" described above within the framework of the integrated concept of Lean Six Sigma is shown in the table

This table shows that in the Lean Six Sigma concept, the answers to the question “how to organize activities?” taken from the concept of "Six Sigma", and the question "what to do?" - mainly from the concept of "Lean Management". At the same time, the concept of Lean Six Sigma uses a combined set of measured indicators (metrics) and a combined set of methods and tools for implementing improvement. An example of a set of methods and tools used in the Lean Six Sigma concept is given below.

The practice of using the concept of Lean Six Sigma in Western enterprises allows you to achieve results on your own in a short time (about a year):

• reduction in the cost of products and services by 30-60%;
• reducing the time of service provision up to 50%;
• reduction in the number of defective products by about 2 times;
• increase without additional costs of the volume of work performed up to 20%;
• reduction in the cost of design work by 30-40%;
• reduction of project execution time by up to 70%.

A graphical comparison of the performance of the enterprise using the integrated concept of Six Sigma + Lean Management with the results of the concepts of Six Sigma and Lean Management applied separately is shown in the figure.

There are two main signs that indicate the presence of avoidable losses in the processes. The first sign is any changes taking place in the enterprise, for example, an increase or decrease in production volumes, expansion of the range, organizational changes, innovations, etc. The second sign is insufficient documentation of processes and misunderstanding of the essence of processes by employees involved in the process.

Before answering the question "will it work?", it is worth considering an example when one of the seven simple quality tools did not "earn" - the data stratification method. After a seminar in one of the consulting firms, the enterprise specialist decided to analyze the accumulated data on defects.

Defects in the enterprise were detected by the following methods:

• acoustic emission method,
• ultrasonic control,
• eddy current method,
• magnetic particle, etc.

The enterprise did not have a classification of types of defects that could be associated with the causes of defects. The data array was stratified according to the methods for detecting defects, and then the analysis of the data for the entire period was carried out. Such an analysis of the results did not give, the nature of the data did not allow for another analysis. As a result, statistical methods were forgotten, and the fight against marriage resulted in an increase in fines.

To start improvement projects, you do not need to know perfectly the entire set of Lean Six Sigma tools and metrics. The 20/80 principle is also valid in relation to the demand for the knowledge of black belt specialists. In the implementation of 80% of projects, less than 20% of the tools studied by these specialists are used. The complexity of applying the concept of Lean Six Sigma lies in the simplicity of its individual elements. Most of the problems are due to incorrect data collection and preparation, as in the example described. There are several basic principles that accompany success, both in the application of simple statistical methods and in the implementation of the concept of Lean Six Sigma:

• leadership interest;
• allocation of resources;
• experience of successful projects.

When implementing the Lean Six Sigma concept, resources include the paid time of the staff, the costs of its training and the acquisition of funds necessary for the preparation and implementation of projects. Management must acquire the knowledge necessary to control and manage these activities. A calculation of the required training hours and the cost of working hours for the implementation of projects can be found in any Six Sigma textbook. The project leader should have hands-on experience of participating in successful improvement projects. For all the importance of learning, the experience of participating in one successful project worth studying dozens of examples from practice.

The right combination of these techniques in mining and metallurgical industries Brazilian industry brings noticeable results. The website //www.industryweek.com spoke about the successful application of the iTLS methodology at the enterprises of the Votorantim group

It's obvious that production organizations Profit-oriented businesses focus on achieving targeted levels of revenue from their operations by relying on their own capacity and resources. If targets are not achieved, this results in low revenue and high inventory levels, increasing operating costs. As a result, the amount of profit and the rate of return on investment are significantly negatively affected. This situation also leaves the organization in a state of stress and some emptiness due to a seemingly paradoxical situation where key organizational resources become a potential threat to the company's future earnings.

To improve the performance and increase the profitability of organizations, it is customary to apply various techniques as part of the continuous improvement process, such as Lean Manufacturing (Lin), 6-Sigma and Theory of Constraints of Systems (TOC). However for a long time no scientific studies have been conducted that could measure the effectiveness and contribution of the use of such methodologies in improving the performance of organizations. For this reason, in the period from 2003 to 2005. extensive research has been carried out this issue, which also analyzed the effectiveness of sharing three of these techniques in a logical sequence, and also compared the results obtained with the results from the use of only one of these techniques.

The integrated method model was subjected to a series of specific tests known as iTLS as part of a continuous improvement process. This iTLS model included the Theory of Constraints of Systems created by Eliyahu Goldratt, a technique Lin production, more commonly known as the Toyota Production System, and also 6-Sigma, a methodology created by Motorola. This model assumed the use of the mentioned methods in a certain sequence, which contributed to focusing on key strengths each of these methods.

After 2.5 years, during which 211 continuous improvement process specialists implemented their preferred methodologies at 21 manufacturing plants, 105 projects were completed.

The study made it possible to measure the financial efficiency obtained through the application of each of these methods. Statistical analysis showed that the methods Lin and 6-Sigma contributed to obtaining significant financial results organizations in which they have been applied. The results from applying these methods separately were approximately the same (the obtained value of the significant probability (P-Value), equal to 0.622, did not indicate a significant difference between these two methods when analyzing the factor financial efficiency).

One organization that took an integrated approach was the Votorantim group of companies, the fourth largest private organization Brazil, operating in several countries and in various market segments, such as mining industry, metallurgical, cement, pulp and paper, steel-smelting industries, as well as the production of fruit juices. Five plants have implemented an integrated system of TOC, Lean and 6-Sigma, the so-called iTLS continuous improvement methodology, developed and published in detail in 2006 by Dr. Reza Piratesh (Piratesh and Farah, 2006). Two of these factories, which will be discussed below, were a mining factory and a smelter.

In the case study below, the iTLS methodology has successfully synchronized production and leveraged existing production capacity to ensure process stability. This methodology was applied without hindrance due to the involvement of the personnel of the organizations and their strong focus on success. TOC Integrated System Model, Lean Manufacturing and 6-Sigma Models (iTLS)
iTLS combines three powerful components - Lin, 6-Sigma and TOC - optimally matching and synchronizing them:

• focusing on only a few critical elements that limit the activities of the company as a whole, through the use of TOC;
• eliminating defects in production by detecting the so-called "hidden factories" within the framework of the methodology Lin;
• reducing the possibility of unwanted variability to ensure process stability through 6-Sigma.

The use of this integrated system of continuous improvement in production has made it possible to ensure that the capacities and resources involved in the production process are converted into a stable production that generates income with a high share of profit.

results

The following case study is a brief description of the experience of applying the iTLS methodology in several Brazilian conglomerates, which included mining plants, ore dressing plants, and smelters. In all the cases where the iTLS methodology is applied, the throughput rate for production increased significantly in 3-4 months. The continued use of this technique over the next 3-4 months allowed to stabilize production processes, along with the achievement of strategically important target production volumes, which was previously considered almost impossible.

New production figures significantly exceeded the previous ones, and investments in additional capacities were not poured in. The result was the achievement of higher indicators of income, profit and return on investment.

Practical example

Initial conditions:
None of the plants could reach the target production volumes, good production performance was only a single occurrence, which led to loss of income due to late deliveries.
Plant managers were under constant pressure for not achieving strategic performance targets and, as a result, the overall performance of the organization deteriorated.

Other undesirable phenomena were observed:

• The goals set were not achieved.
• The number of actions taken was large and continued to grow, making it difficult to manage these actions.
• Growing pressure to acquire more and more resources.
• Employees despaired; there was an opinion: "the more we try, the less we achieve."
• The search for the perpetrators on the one hand and their constant excuses on the other hand, along with the attitude of non-intervention of some employees, created a negative atmosphere in which there was no positive cooperation between the staff.
• Resource productivity was very low.
• Lack of necessary preventive measures.
• Employee apathy.

Application

The iTLS model was applied simultaneously to all plants. Its goals were to stabilize and improve production processes to ensure optimal interaction with the market. There were 4 main elements:
1) Application of the TOC tool "Drum-buffer-rope" to identify the limitations of the production process and plan the limiting section:

• A “drum” resource that set the pull rate for production and set the TACT for delivering (i.e., production began to work in such a way as to directly respond to customer requirements) of manufactured products to the market.
• Creation of buffers related to the "drum" resource and providing protection against emerging deviations in the production process and in shipment.
• Pulling release of materials (“rope”), which ensures the synchronization of the production process with the “drum” resource.

2) The use of Lean tools to identify the stages responsible for the occurrence of manufacturing defects and exclude them from the production process in order to increase its efficiency.
3) Applying 6-Sigma tools to ensure the sustainability of the changes made by introducing statistical control over production processes.
4) The introduction of well-established templates and methodologies for solving emerging problems, available to workers and management personnel, in order to ensure that each of these groups of employees can independently ensure continuous improvements in their processes.

There is a direct relationship between the response to the work of the “drum” resource in combination with maintaining the stability of production and financial efficiency indicators. As soon as the "drum" was found based on the determination of the optimal capacity of the restriction, its operation became a key moment for the release of materials and the implementation of shipments.

The resource constraint had to be protected from possible deviations that occurred at the stages of the production process that preceded it as a result of interdependent operations. The purpose of this was to ensure that the required capacity of this resource was used in full production. In organizations with a continuous production process, the protection of the constraint resource, which is the starting point for the organization of the "drum" and the shipping department, was carried out by creating buffers of a given size that feed this resource during production failures to ensure continuous production and uninterrupted supply.

As soon as buffers of the required size were introduced, they began to absorb all the negative deviations that potentially affect the resource-limitation and the shipment process. It was important to understand that when such deviations affected the buffer, the latter decreased in volume and needed to be restored. Its replenishment became possible due to the use of excess capacity preceding the resource-limitation ("drum") and the shipping department (~10%). In essence, they were protective powers. Their use when appropriate needs arise and made it possible to replenish the buffers.

Thus, any production step that was less than 110% of the 'drum' was considered a limitation, as it could potentially have a global negative effect on the pass rate. It might seem that the activity in this case was temporarily unbalanced. However, the work crews then set to work to maximize the value of the manufacturing process by reducing and stabilizing scrap rates. For this, 6-Sigma tools were used to reduce variability.
This model included buffer management in order to optimize the decision-making process based on the interpretation of the state of the buffers at certain points in time. Buffers have become the main source of information for management, allowing them to track what is happening in the production process, prevent potential threats, determine the causes of their occurrence and make decisions that contribute to the continuous improvement process. For this, the tools of Statistical Process Control were used.

The similarity of the results obtained using the iTLS model was in line with expectations. Below are some of the results that each plant has been able to achieve:

• Production increased by 10%, which made it possible to satisfy the requirements of consumers by 100%, without the need to attract additional capital investments.
• Profits increased by 5%.
• Each company's payback period was reduced to a few months, and at one plant it was only 28 days - an all-time low level.
• Production processes stabilized, which made it possible to achieve the strategically important target production volumes predicted earlier.

Eugenio Germont, CEO of Votorantim Metais Unidade Tres Marias, commented that “…we have succeeded in this ambitious undertaking…and therefore we have achieved all the goals we set…”

Synergy in application CBT, Lean and 6-Sigma, expressed in the iTLS model, has become a tool to provide fast and efficient productivity improvements in mining and smelting plants. This, in turn, made it possible to fulfill obligations to customers by 100%. This model used the tools of the Theory of Constraints to focus on areas requiring change, the Lean methodology to eliminate manufacturing defects, and the 6-Sigma system to control the production process and the resulting deviations.

The synthesis of two proven and popular methods of management and optimal adjustment of the production process, which complement each other, is called Lean Six Sigma.

The goal of integrating the concepts was to create a system with a synergistic effect that could be applied to any enterprise, regardless of the field of activity and size.

The concept of "Six Sigma" made up for some of the imperfections of the concept of "Lean Manufacturing" and vice versa.

The experience of using a complex synthesized process was first described in 2001, and after 2 years several books were published with a detailed review of the theory and practice of Lean Six Sigma. As a result, it became clear that the concepts conditionally “divided” all the procedural diversity among themselves: “Lean” showed what needs to be done, and Six Sigma showed how to organize activities for this.

How do the concepts complement each other?

The concept of "Lean production", having changed the culture of production, over time expanded the toolkit, included the ideas of the value stream, the method of protecting against errors, and was transformed into "Lean Management" (Lean).

By the end of the 20th century, both of these concepts (Lean and Six Sigma) were the most popular areas of business consulting in quality management, since the number of successful implementations in relation to the total number of implementations turned out to be higher than for other quality management methods. Together, they showed even greater efficiency.

How Six Sigma complements Lean:

1. Lean does not set requirements for the infrastructure necessary to implement the concept. The solution to this issue depends on the initiative of managers and their organizational skills, and when changing the composition of managers, difficulties arise with the transition. Six Sigma helps to formalize the obligations of the top management of the enterprise, form a plan for allocating resources and monitoring the success of their development.
2. The concept of Lean is not as strict as in Six Sigma, the focus is on consumer needs. Satisfying requests from elimination production costs and non-production losses depends indirectly, while in Six Sigma the description of the principles of the DMAIC concept begins with the definition of consumer requirements: Define, Measure, Analyze, Improve, Control (Russian: Define. Measure. Analyze. Improve. Manage).
3. Defects, within the framework of the Lean concept, are named as the main sources of production losses, but the methods of statistical management for their elimination are prescribed in Six Sigma.

How Lean complements Six Sigma:

1. Six Sigma describes methods for eliminating defects, but in addition to defects, Lean Management also mentions waiting, transportation, overproduction, inventory, people movement, and non-value-adding activities. Sometimes practitioners also highlight the use of low-quality raw materials (“false economy”) and diversity, as a result of non-standardized components of the process.
2. Six Sigma does not explain the relationship between customer satisfaction (quality) and process duration. Thanks to the Lean system, the concept of “time” is introduced as a key one.
3. Lean expands on the scope that Six Sigma describes, adding the elimination of unproductive activities, the optimization of the workplace, reducing inventory, reducing transportation costs, and more.

At the same time, both basic systems are characterized by an orientation towards a single process (in contrast to the concepts that preceded them, trying to achieve universal coverage). This originality was preserved by the synthesized concept.

Application of the Lean Six Sigma system in industries

Both basic systems who created the synergistic concept of Lean Six Sigma are "living" systems. Having passed multiple "tests" in the industrial and non-industrial sectors, the concepts have become universal - applicable with equal success in various industries. Using the example of logistics, one can show the use of the Lean Production + Six Sigma complex in the service sector.

The lead time, according to Little's formula, is equal to the volume work in progress, divided by the average rate of work completion (the amount of work that one employee performs in a period of time). To reduce lead time, the synthesis of Lean and 6 Sigma systems in logistics is focused on optimization in 3 main areas:

1. The logistics process is a slow process, which makes it costly. (More than 50% of slow processes are associated with non-value added waste).
2. The speed of services in logistics is reduced due to a significant share of work in progress. As a result, about 90% of the time the work is considered unfinished, which reduces consumer satisfaction.
3. The direction is based on the Pareto principle, characteristic of slow processes: 80% of the costs are the result of 20% of the actions. By identifying and reducing these 20%, timeliness increases to 99%.

The specificity of logistics is also that it accounts for about a third of sales. Calculations show that 10% of defects in logistics increase lead time by 38% and WIP by 53%. A significant part of the costs relates to return logistics. Depending on the initiator of the return, the reason may be:

• dissatisfaction of end-users implementing a money-back guarantee,
• problems with installation and use (with subsequent return of marriage),
• repair work associated with multiple shipments of goods in both directions,
• expiration date and environmental safety, etc.

For example, in the United States Internet commerce, the return of electronics and high-tech products, according to various estimates, reaches 50-80%. This increases the number of problems for the industry, which was originally created and set up for direct movement, without a large-scale reverse flow, and which was not ready to conduct return accounting, disposal of goods, etc.

It follows from the above that the reverse flow should be tuned as carefully as the direct flow, while reducing the number of non-value-adding operations. This can help, for example, computer programs that would be compatible with the information systems of all departments and would allow the formation of group orders, sorting them by delivery time, product types, priorities, etc. The general tasks remain the same as for the production of products - reducing the variability at the input , reducing the number of switching between tasks, standardizing the platform within the cycle while maintaining the assortment that meets the needs of the client, etc.

Logistics is a frequent application of Lean and Six Sigma concepts in the service industry, but illustrates common features application of the system.

The effectiveness of Lean Six Sigma in numbers

The introduction of Lean Six Sigma is reflected both in economic growth and in the improvement of the atmosphere within the team, which, ultimately, also affects the economy - a culture of well-coordinated teamwork arises, a quick exchange of information and specific knowledge. As a result, the implementation of an integrated concept:

• speeds up processes by 20-70%;
• improves the quality of services and manufactured products by 20-40%;
• increases the overall efficiency by 10-30% (compared to a separate implementation of one of the basic systems).

Often the implementation of the concept is more difficult than expected. The “human factor” kicks in, there are internal contradictions in the requirements, the statistical process becomes an end in itself, and not a method for detecting defects.

Among the common mistakes, they also mention overloading with the tasks set for themselves, when, for example, there are 100 technical transformations for 100 identified customer needs. But this, at first glance, "lifting" volume involves the planning and regulation of about 10 thousand relationships, which significantly complicates the implementation. In such cases, it is advised not to transform everything at once, but to focus on the critical needs for the client, selected using a priority list.