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Lean, Six Sigma and TLS (TOC-Lean-Six Sigma) at Sanmina

Presented by Russ Pirasteh at the 2007 TOCICO Conference
by

Guillermo Taylor

on 14 January 2015

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Transcript of Lean, Six Sigma and TLS (TOC-Lean-Six Sigma) at Sanmina

"TLS Continuous Improvement Trio”

Is It Not The Time To Think Differently?
Presented By:
Russ Pirasteh,PhD,MBB,CLM
Why Change?
− Faced with urgency for productivity, quality leadership, and higher profitability.
− Customers are asking for cost reductions while at the same time demanding higher quality levels.
− Firms which are not prepared, could be replaced with rival firms which possess these capabilities.
− This phenomenon results in a race for profitability and survival.
− Who would win this race?
− It is critical to reduce waste and defects at all levels to reduce COPQ.
− Improve processes.
What are the alternatives?
TOC
LEAN
SIX SIGMA
− Originated and authored by Eliyahu M. Goldratt
− Also referred to as "Constraint Management“
− Rate of revenue generation (Throughput) is limited by at least one constraint (i.e. a bottleneck).
− Only by increasing capability at the Constraint overall throughput will be increased
TOC 5 Focusing Steps:


1. Identify the constraint
2. Exploit the constraint
3. Subordinate
4. Elevate the constraint
5. Go back to step 1 and repeat
• Toyota Production System
• Focusing on reduction of the seven wastes

1. Overproduction
2. Waiting - People, Parts
3. Too Much Inventory
4. Unnecessary Motion
5. Unnecessary Transporting
6. Over Processing
7. Producing Defects or Rework
− Pioneered by Bill Smith at Motorola in 1986− Originally defined as a metric for measuring defects andimproving quality− Defect levels below 3.4 (DPMO)
The Goal
To achieve maximum profit ethically now and in the furture...”
So...
Which CPI methodology better allows to maximize profits??
Case Study
PURPOSE
How could we best optimize profits?
TO ACHIEVE THAT:
− Compare and contrast methodologies

− Evaluate and statistically quantify the impact
OBJECTIVES
Measure and validate effectiveness of:

− Lean
− Six Sigma
− TLS
CRITERIA
− Aggregate contribution to verifiable financial savings
− Validate savings
− US operations were studied
INITIAL CONDITION
Lean and Six Sigma had been practiced in the Company for several years.

Both approaches had shown that they were able to prompt operations personnel to work on a series of projects that resulted in cost savings and process improvements.

TLS: an alternative – using synergetic approach.
EXPERIMENT MAP
− Collect data
− Compare
Lean and Six Sigma
Lean, Six Sigma and TLS

Using ANOVA as one of analysis tools
P-Value: 0.05
Confidence interval: 95%
The Experiment
PARTICIPATING PLANTS
ANOVA Comparing Lean with Six Sigma:
Individual 95% confidence intervals for Mean Based on Pooled Standard Deviations
Is it time to think Differently?
Comparing Lean , Six Sigma with TLS
EXPERIMENT FINDINGS
− 11 Six Sigma−4 Lean−6 TLS
Next Generation CPI:
TOC TLS TRIO Model
TLS, Lean, and Six Sigma all offered benefitsTLS showed 3.9 times greater financial benefit
TLS TRIO
HOW DOES IT WORK?
• Purpose used:

− Constraint Management and Global Optimization
− Focusing on what is the constraint
− Identifying the true constraint and its nature
− Ensuring global optimization
− Safeguard against local optimization
− Realizing constraint shifts
− Systems approach
Purpose used:

− Eliminate Waste
− Identify what is important to the customer - Value
− Clearly understand processesLean TLS
− Identify the sources of waste
− Remove waste from processes
− Create smooth flow of processes
− Eliminate unnecessary inventories and WIP
− Improve work cycle efficiencies by removing unnecessary steps and activities
Purpose used:

− Perfecting process and optimizing variability
− Apply Six Sigma’s DMAIC to identify and isolate the source(s) of process variation and systematically remove or minimize those variations.
− Apply DMADV for new designs
− Strategically match voice of TOCGlobal Optimization customer to the voice of process
− Identify sources of variation in process
− Design processes that are robust against natural variations
TLS Engagement Model
LESSONS LEARNED
− TLS is a synergetic approach
− Right mixture of TOC, Lean and Six Sigma fills the gaps
− Evolves to a significant approach
– Interaction effect
− Lean and Six Sigma are viable CPI approaches
− By applying TLS we can deliver higher values to our customers
REQUIREMENTS TO IMPLEMENT TLS
Executive leadership and buy-in

Champions – responsible for global implementation in integrated manner

Local trainers need to be proficient (MBB/BB), in application of:
− TOC
− Lean
− Six Sigma

Understand TLS engagement model Solid project management
THE GOOD NEWS
We have the needed tools

− TOC for where to focus
− Lean for waste reduction
− Six Sigma to reduce variation
THE BAD NEWS
Ownership is the constraint
Group think
The devil I know is always better than the devil I do not know
Pain of change that is difficult, even for me
Good Luck & Thank You!

• Russ Pirasteh, PhD, CMBB, CLM• Global Director – Operations Excellence• Sanmina-SCI – LRS Division48• russ.pirasteh@sanmina-sci.com
ABOUT RUSS PIRASTEH
Full transcript