A business organization's primary goal is to earn a profit. There are several ways in which profit can be generated, but to remain competitive in the marketplace, a business has to watch the final price and quality of a product that it sells to the customers. Lean manufacturing is concerned with eliminating waste in terms of time, materials, and processes which will result in increased revenues. The operations manager has the task of making sure the flow of materials from input to the final product is as efficient as possible with no waste in process or materials. The operations need to be run at the lowest costs with each station operating reliable. In this white paper, I will analyze the various components of lean and six sigma processes in operations management and discuss how relevant these are to organizational success.
Lean manufacturing principle
Lean manufacturing is the principle of fulfilling the customer's needs while making sure there is no waste in the process of manufacturing the product (Thurston and Ulmer, 2016; Resta, Powell, Gaiardelli, and Dotti, 2015; Bayat, and Dadashzadeh, 2016). Lean manufacturing focuses on cost savings, high quality, product delivery, safety, and workforce morale (Thurston and Ulmer, 2016). It is a never ending process to reduce steps that have no benefit in the overall manufacturing process. Any step that is considered waste is removed from the process.
It starts with the vision of senior leaders regarding what the organization wants in terms of competitive importance in products or services and how it enters the marketplace (Drohomeretski, Gouvea da Costa, Pinheiro de Lima, and Garbuio, 2014). The entire workforce needs to be trained in the concept of lean manufacturing so that everyone is on the same page in terms of value and waste elimination. The organization culture should be one of continuous learning and improvement, and the workforce needs to slow down or stop the process if they see an issue with the quality or other error to get it solved quickly.
Thurston and Ulmer (2016); Goel, and Kleiner, (2016); and Pachecoa, Caten, Navas, Jung, Cruz-Machadoc, and Lopesc (2016) describe seven types of waste an organization can look for and eliminate from their processes. They are overproduction, waiting, transport, extra processing, inventory, motion, and defects. Eliminating this type of waste increases production speed and reduces long lead time.
Overproduction waste has the biggest effect on the product bottom line. By making too much of a product or component, it gets in the way, and it needs to be stored until it is needed downstream. It also makes it difficult for the operations manager to use effects based staffing to identify workforce needs. Ideally, there should be no extra parts made. The right number of parts produced for the assembler to use to put together the final product. This eliminates storage space issues, wasted raw materials, and extra costs added to the end product.
Waiting waste occurs when there are not enough parts to complete a product which stops the assembly line or a material delivery mix up. Workers waste time sitting around for the components needed or searching the plant for the materials. By knowing each step in the product making process and materials needed, a standard work process (SWP) can be developed to ensure the required materials are ordered and handled correctly which should put a stop to waiting waste when followed.
Transport of material waste is of no value to making the final product. It increases the time from start to finish of the final product which adds cost to the bottom line. The operations manager needs to look at all material transportation situations and find where time can be gained by reducing distance traveled by workers. Moving production equipment or machinery closer to each other can eliminate steps and be a solution to speed the process up. Technological advancements can improve the performance of older equipment that is outdated. Automation of production can increase the flow of components as well as keep quality uniform (Zhang, Vareilles, and Aldanondo, 2013).
Extra processing waste occurs when defects or misinformation causes a part or document to be sent back and reworked. This could be fixed by clarification of standard operating procedures or detailed quality assurance process before going to the next workstation. The goal is to double check each step and produce components that meet specifications the first time around.
Inventory waste deals with not having the output in sync with input of materials. There should not be holdups waiting on materials or parts, and there should not be excess parts that need to be stored until needed. Extra parts add storage cost, can go out of date due to a change in specifications, uses more raw material than needed, and wait time loss in case of material shortage.
Motion waste deals with needless walking, reaching or bending over more than necessary. It can be improved by an ergonomically designed work area to increase production time and reduce the chance of injury to workers from unnecessary movements. Making signs easily visible increases efficiency of the workers.
Defect waste is a product not meeting specifications or requirements requested by the customer. SWPs are followed to ensure each product leaving the workstation is uniform and of high quality. Organizations should have a review board to review SWPs and the final products periodically to make sure quality is being delivered and improve processes to eliminate waste and add value.
Besides eliminating non-value steps and waste, it increases poke-a-yoke (Thurston and Ulmer, 2016) which means mistake-proofing. Each step in the manufacturing process needs to be mistake proofed to eliminate defective products. Four parts of mistake proofing are
• General inspection to find errors and correct them before the final product is defective
• 100% inspection compares parts to a standard during each step of the manufacturing process
• Error Proofing Devices are fixtures like guide pins, counters, and alarms to reduce likelihood of an error reoccurring
• Immediate feedback to the operator announcing there is a problem in the process
Another process that can improve operations management by identifying and removing the causes of quality defects or issues in processes used by focusing on customer needs is called Six Sigma (Pachecoa, Caten, Navas, Jung, Cruz-Machadoc, and Lopesc, 2016). Six Sigma is a quality measurement methodology for eliminating quality issues by aiming for “six deviations between the mean and the nearest specification limit” (SixSigma, 2017) in a process. See Figure 1.
Figure 1. Flow chart of Lean Six Sigma process (free-six-sigma, 2017).
To implement the Six Sigma process (Drohomeretshi et al., 2014), the organization needs to:
• Understand the POV from shop floor on project
• Involve top leadership
• Follow DMAIIC (Define, Measure, Analyze, Improve, Implement, and Control) process. See Figure 2.
• Fast application of Six Sigma to a project
• Clear and concise definition of expected results
• Supply infrastructure to make needed improvements
• Focus on process to the consumer
Figure 2. DMAIIC process (DMAIIC, 2017).
Costs can be reduced by applying the principles of Six Sigma to make improvements to the way the organization produces products and services for the marketplace.
Lean Six Sigma
By combining the principles of lean manufacturing and Six Sigma, the organization can improve on process time, product quality, customer satisfaction, reduced waste, and reduce costs which will give the organization a competitive edge in the marketplace. Training the workforce is all stages necessary to produce a product helps reduce time delays when someone is sick or on vacation, eliminates boredom from routine type work, and decreases wait time for the product (Takahashi, 2011).
Supply Chain Management (SCM)
Supply Chain Management (SCM) is concerned with how fast an organization can meet customers' expectations while reducing waste and becoming lean (Gunasekaran, Patel, and Tirtiroglu, 2001). It starts with the raw materials being brought into a business, transforming raw material into the final product, and shipping the final product to the marketplace. With each step in the manufacturing process, performance metrics need to be in place to see if the process is efficient or needs to have wasted steps removed. Sometimes, an organization will find that the process is performing the best that it can, and it can outsource some work to another company who can carry out the work cheaper and still deliver quality that meets specifications. An operations manager needs to look at all steps in the process and do what is best for the organization to save money and be competitive in the marketplace.
There are many principles and processes an organization can follow to optimize their internal and external ways of producing products and services. This article spoke about Six Sigma and Lean Manufacturing and combining the two in order to eliminate waste and non-value added steps to produce goods that are of uniform quality and provided at the lowest cost to meet consumer demand. After examining all the steps in the process, a business might find it is cheaper to outsource different steps and concentrate on its core products and processes. An operations manager has to continually monitor all steps in the process and keep aware of technology in case something can be done in a better, efficient way than currently performed. A business needs to do everything it can to cut costs and deliver quality if they are going to compete in the marketplace and earn a profit.
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