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Michael L. George Foreword by The Lean Six Sigma GUIDE TO Doing More with Less Cut Costs, Reduce Waste, and Lower Your Overhead MARK O. GEORGE The Lean Six Sigma Guide to Doing More with Less The Lean Six Sigma Guide to Doing More with Less Cut Costs, Reduce Waste, and Lower Your Overhead MARK O. GEORGE John Wiley & Sons, Inc. Copyright#2010byAccenture.Allrightsreserved. PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey. PublishedsimultaneouslyinCanada. Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or transmittedinanyformorbyanymeans,electronic,mechanical,photocopying, recording,scanning,orotherwise,exceptaspermittedunderSection107or108ofthe 1976UnitedStatesCopyrightAct,withouteitherthepriorwrittenpermissionofthe Publisher,orauthorizationthroughpaymentoftheappropriatepercopyfeetothe CopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers,MA01923,(978) 7508400,fax(978)6468600,oronthewebatwww.copyright.com.Requeststothe PublisherforpermissionshouldbeaddressedtothePermissionsDepartment,JohnWiley &Sons,Inc.,111RiverStreet,Hoboken,NJ07030,(201)7486011,fax(201)7486008, oronlineathttp://www.wiley.com/go/permissions. LimitofLiability/DisclaimerofWarranty:Whilethepublisherandauthorhaveusedtheir besteffortsinpreparingthisbook,theymakenorepresentationsorwarrantieswith respecttotheaccuracyorcompletenessofthecontentsofthisbookandspecifically disclaimanyimpliedwarrantiesofmerchantabilityorfitnessforaparticularpurpose.No warrantymaybecreatedorextendedbysalesrepresentativesorwrittensalesmaterials. Theadviceandstrategiescontainedhereinmaynotbesuitableforyoursituation.You shouldconsultwithaprofessionalwhereappropriate.Neitherthepublishernorauthor shallbeliableforanylossofprofitoranyothercommercialdamages,includingbutnot limitedtospecial,incidental,consequential,orotherdamages. Forgeneralinformationonourotherproductsandservicesorfortechnicalsupport, pleasecontactourCustomerCareDepartmentwithintheUnitedStatesat(800)762 2974,outsidetheUnitedStatesat(317)5723993orfax(317)5724002. Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthat appearsinprintmaynotbeavailableinelectronicbooks.Formoreinformationabout Wileyproducts,visitourwebsiteatwww.wiley.com. LibraryofCongressCataloginginPublicationData: George,MarkO.,1960 Theleansixsigmaguidetodoingmorewithless:cutcosts,reducewaste,andlower youroverhead/MarkO.George. p.cm. IncludesbibliographicalreferencesandIndex. ISBN:9780470539576(cloth) 1. Costcontrol. 2. Sixsigma(Qualitycontrolstandards). 3. Productioncontrol. 4. Industrialmanagement. I. Title. HD47.3.G472010 658.40013 dc22 2009052170 PrintedintheUnitedStatesofAmerica. 10 9 8 7 6 5 4 3 2 1 Contents Foreword xi Preface xv Acknowledgments xxi Chapter1 WhyUseLeanSixSigmatoReduceCost? 1 TransactionalExample:LeanSixSigmaTransformingOur Government 6 TheAlloyofHighPerformance:WhyChooseLean SixSigmatoReduceCost? 6 LeanSixSigmaversusTraditionalCost-CuttingTactics 9 EmergingStrongerThanEver 14 Spotlight#1 HowtoUseThisBook 17 OverviewofPartI:ProcessCostReduction—aFocusonthe ToolsofWasteElimination 18 OverviewofPartII:EnterpriseCostReduction—aFocusonValue, Speed,AgilityandCompetitiveAdvantage 19 OverviewofPartIII:AcceleratingDeployment Returns—GettingMore,Faster,fromaLean SixSigmaDeployment 20 PartI Process Cost Reduction: A Focus on Waste Elimination IntroductiontoPart1 23 v vi Contents Chapter2 FindCostReductionOpportunitiesinWaste 25 TheSevenCommonFacesofWaste:TIMWOOD 27 UsingtheFullLSSToolkittoDriveCostReduction 37 Spotlight#2 SpecialTipsforNonmanufacturingProcesses 39 KeySuccessFactorsinReducingCostsinServicesandRetail 40 Spotlight#3 DesignaSuccessfulLeanSixSigmaProjectorPilot 45 WhichMethodologyIsRightforYourProject? 45 IdentifyingthePlayersandTheirRoles 47 Chapter3 UsetheVoiceoftheCustomertoIdentifyCost-Cutting Opportunities 51 CustomerTypesandTheirNeeds 52 CollectingDataonCustomerNeeds 53 GettingSpecificaboutCustomerNeeds 57 AvoidingMisinterpretations 60 Conclusion 64 Chapter4 MakeProcessesTransparenttoExposeWaste 65 HowtoDefinetheBoundariesthroughSIPOCDiagrams 67 UsingValueStreamMapstoAchieveTransparency 69 Conclusion 82 Chapter5 MeasureProcessEfficiency:FindingtheLeversof WasteReduction 83 ProcessCycleEfficiency(PCE):TheKeyMetricofProcess TimeandProcessCost 84 Little’sLaw:UnderstandingtheLeversforImproving ProcessSpeed 88 TheWIPCapMethod:HowLimitingWIPCanIncrease ProcessSpeedandReduceCosts 90 UsingPCEandLittle’sLawtoDriveCostReduction 95 Contents vii Chapter6 ImproveYourAnalysisSkills:HowUnderstandingVariation, RootCauses,andFactorRelationshipsCanHelpYouCutCosts WhileImprovingQuality 97 AnalysisSkill#1:Learningto‘‘Read’’Variation 98 AnalysisSkill#2:DiggingOutRootCauses 107 AnalysisSkill#3:Establishingrelationshipsbetweenfactors 109 Conclusion 114 Chapter7 MakeRapidImprovementsthroughKaizens 117 QuickOverview:TheKaizenApproach 119 WhenShouldYouUseKaizensinCostReductionProjects 120 SevenKeystoKaizenSuccess 124 Conclusion 129 PartII Raising the Stakes: Reducing Costs atan Enterprise Level Chapter8 ThinkTransformation,NotJustImprovement 133 AttainaProperUnderstandingoftheExtentofthe Opportunity 135 ConsciouslyChooseaPathtoCapturetheOpportunity 138 PlanforaTransformationJourney 144 LeadershipChallengesinLeadingaTransformation 151 Conclusion 152 Spotlight#4 TransformationatOwens-Illinois 155 Chapter9 UnlocktheSecretstoSpeedandFlexibility 159 AlignmentandAnalytics 160 AModelofSpeedandAgility 162 EconomicOrderQuantity(EOQ)—TheFirst100Years 165 AugmentingEOQwithLeanAnalytics 167 TheEquationsinAction 173 Conclusion 176 viii Contents Chapter10 ReducetheCostofComplexity 177 TheHiddenCostofAddedOfferingsonProcesses 179 AssessingComplexityinYourBusiness:AHolisticView 182 HighlightsoftheComplexityAnalysisProcess 183 ComplexityReductionastheGatewaytoTransformation 195 Conclusion 196 Chapter11 LookOutsideYourFourWallstoLowerCostsInside 197 WhatIsanExtendedEnterprise? 199 WorkingontheSupplierEndoftheExtendedEnterprise 204 WhattoDoWhenYou’retheSupplier:Extending YourEnterpriseDownstream 208 Conclusion 211 PartIII Speeding Up Deployment Returns: Strategies for Getting More, Faster, from a Lean Six Sigma Deployment Chapter12 CreateaPipelineofCostImprovementProjects:TheSecret toProtectingtheHeartofYourBusiness 215 DevelopingRigorinProjectIdentificationandSelection 217 FromFirst-TimetoAlltheTime:ShiftingfromaOne-Time EventtoanOngoingSystemofPipelineManagement 226 Conclusion:MaintainingaDynamicPipeline 230 Spotlight#5 LinkProjectstoValueDrivers 233 Option1:ValueDriverTrees 233 Option2:FinancialAnalysisDecisionTree 237 Option3:EconomicProfit 237 Option4:EPSensitivityAnalyses 239 ValueDriverExample 243 Chapter13 SmooththePaththroughChange 247 ChangeReadinessAssessments 248 LeadingversusManagingtheChange 250

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Praise for The Lean Six Sigma guide to Doing More with Less"At Frito Lay, we have applied many of the concepts and tools in this book, and we are realizing a five to seven times return on our annual Lean Six Sigma investment."—Tony Mattei, Lean Six Sigma Director, Frito Lay"Ecolab has experienced
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352 Pages·2010·2.95 MB·English
by  Mark O. George
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Praise for The Lean Six Sigma guide to Doing More with Less"At Frito Lay, we have applied many of the concepts and tools in this book, and we are realizing a five to seven times return on our annual Lean Six Sigma investment."—Tony Mattei, Lean Six Sigma Director, Frito Lay"Ecolab has experienced

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