Q & A with Chet Kagel and Phil Preston, Partners, HPK Group, LLC

IEN: What are the basic issues that need to be addressed when implementing Lean and Six Sigma in assembly operations?

Kagel: Make It Important -- align with your strategic plan and/or key customer requirements.
It is understood that most major initiatives need support from top management and that is certainly the case with both Lean and Six Sigma. By aligning both Lean and Six Sigma efforts with either the corporate strategic plan or significant customer requirement you should automatically have top management support.

Tap Into Your Resources -- involve employees at all levels.
Actual implementation of either Lean or Six Sigma, however, requires active participation from those employees who will be producing the product as well as involvement from support departments (engineering, design, purchasing, maintenance, etc.). So, support is Top Down but implementation is Bottom Up.

Plan For Success -- allocate resources and provide a budget.
Resources need to be assigned to these efforts along with the funds necessary to achieve their goals. Failure to free people up sufficiently to concentrate on these initiatives or failure to provide proper funding will shortchange the effort.

Encourage Innovation -- "mistakes" are OK.
If it isn''t OK to make mistakes or have failures, there won''t be any breakthrough developments. This is the time to be creative!

Prefer Action Over Perfection -- stress a "Do It," "Try It" mentality.
Stress action over paralysis by analysis; again mistakes are OK, but let''s make progress by trying new things.

Sustain The Process -- "continuous improvement" and more.
Both Lean and Six Sigma are continuous improvement methodologies. However, take a look at policies, procedures, and reward and recognition systems. Do they support the change or are they actually motivating employees back to counterproductive habits? If you measure and drive for high machine efficiencies, you''ll cause people to revert back to producing large batch sizes instead of achieving one-piece flow that is preferred for meeting customer delivery requirements.

IEN: What factors would cause a manufacturer to hesitate to implement Lean and Six Sigma? What factors would prompt Lean and Six Sigma implementation?

Preston:

Factors For Hesitation:

• No competitive or customer pressures


• Uncertainty over costs to implement and the return on investment


• Uncertainty over employee acceptance


• Counterintuitive nature of some techniques (i.e. batching vs. one-piece flow)


• Time pressures for current production.

Factors That Prompt:

• Late deliveries of customer orders


• Customer demand exceeding production capacity


• High inventory costs


• Product quality issues


• Customer service issues


• Competitors reducing lead times and improving manufacturing flexibility


• Customer request


• Organizational desire to become the industry leader or to significantly differentiate themselves from the competition.

The strangeness or counterintuitive nature of some of these techniques initially gives traditional manufacturers cause for concern with Lean or Six Sigma methods. When a manufacturing process has long setup times, the natural tendency is to run large batch sizes to make up for the downtime incurred to change over. This results in higher work-in-process and finished goods inventory. Also, because of the larger batch sizes, when an operation has the possibility of producing defects, there is generally significantly more defective work-in-process inventory produced before it is discovered and corrected.

Lean would tackle these issues by striving for one-piece flow, that is, a batch size of one. Also, Lean would implement setup time reduction through Single Minute Exchange of Die (SMED) techniques, and tackle defects by implementing mistake-proofing (Poke-Yoke) activities. Six Sigma would employ Cause/Effect Diagrams, Failure Mode Effect Analysis, Statistical Process Control (SPC),and statistical analyses.

Faced with current time pressures and production volume requirements, it may be difficult to take the time to try these techniques. However, if past efforts haven''t corrected the problem and, in fact, old problems continue to resurface at the most inopportune time, then it is time to investigate how other firms have successfully implemented both Lean and Six Sigma. These techniques bring a logical and scientific approach to the improvement of business processes. Correctly utilize these techniques by aligning them with your strategic plan and you will gain considerable knowledge and understanding of your core processes. Exploit this knowledge and you will develop significant advantages over your competition.

IEN: Do the principles of Lean conflict with techniques used in Six Sigma? Can they be implemented together to form one strategic approach for ongoing business improvement?

Kagel: We see Lean and Six Sigma techniques as being highly complementary. For example, the use of Six Sigma techniques such as a Failure Mode Effect Analysis (FMEA) and Fishbone Cause/Effect diagram provide an excellent foundation for embarking on a Lean Total Productive Maintenance (TPM) initiative. It is generally recognized that Lean Techniques address time variation and Six Sigma addresses process variation. By using both methodologies, an organization can more effectively gain improvements in both areas.

IEN: What products (equipment and software) are used to help implement Lean and Six Sigma methodologies?

Preston:

Software

• Minitab from Minitab Inc for statistical analysis


• ProcessModel from PROMODEL Corporation for process simulation


• MS Excel for developing method sheets

Hardware

• Digital cameras for developing method sheet pictorial


• Video cameras for setup reduction analysis

In one example of successful implementation, Faro experienced the following results from the Lean Implementation at their Kennett Square, PA facility:

• 100% increase in revenue;


• 100% gain in throughput capacity;


• 60% reduction in work-in-process inventory;


• 45% reduction in per-unit labor costs.

"The implementation of Lean Manufacturing as facilitated by HPK Group, LLC, has enabled us to meet our customers'' daily demand for Faro products," says Simon Raab, CEO of Faro Technologies. "The introduction of our new Platinum, Titanium and Gage FaroArms required a significant revision of our existing production processes. The Lean Manufacturing training and implementation assistance provided by HPK Group helped us to ramp up quickly to meet the increasing number of orders for these new products. In addition, the transformation to Lean Manufacturing of our new Laser Tracker production processes resulted in a doubling of our manufacturing capability in the same facility with minimal overtime and only a slight increase in production personnel. This helped us to quickly work down the initial heavy backlog of orders and continues to help us maintain the on-time delivery of Laser Trackers.