CHAPTER 7 EIGHT AREAS

• Six Sigma


  A business process that allows companies to drastically improve their bottom line by designing and monitoring every day business activities in ways that minimize waste and resources while increasing satisfaction
• Lean Six Sigma


  A business process that allows companies to drastically improve their bottom line by designing and monitoring every day business activities in ways that minimize waste and resources while increasing satisfaction
• A picture is worth a thousand words
• TWO MAJOR METHODOLOGIES OF SIX SIGMA

  • ISO 9000
  • ISO 31000
• ISO 9000


  A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements needed to maintain an efficient quality system
• ISO 31000


  Risk management – Guidelines, provides principles, a framework and a process for managing risk. It can be used by any organization regardless of its size, activity or sector
• The ISO 9000:2015 and ISO 9001:2015 standards are based on seven quality management principles that senior management can apply to promote organizational improvement
• Organization


  The collection of structures, processes, and people working collaboratively to pursue a mission and achieve business goals
• Waste


  Anything done or acquired that is not required to successfully complete an activity or support a process
• The Merriam-Webster dictionary defines waste as the loss of something valuable that occurs because too much of it is being used or because it is being used in a way that is not necessary or effective, an action or use that results in the unnecessary loss of something valuable, or a situation in which something valuable is not being used or is being used in a way that is not appropriate or effective
• The Eight Areas of Waste model provides a simple methodology to identify actions and items that reduce the value obtained from available resources
• Eight Areas of Waste

  • Overproduction
  • Waiting
  • Transporting
  • Unnecessary Paperwork or Processing
  • Unnecessary Inventory
  • Excess Motion
  • Defects
  • Underutilized Employees
• Overproduction


  Production of a given output in excess of what is required
• Batch production


  • A common practice, often embraced as a best practice to take advantage of economies of scale
  • Economies of scale are the cost advantage obtained with the increased output of a product, occurring due to the inverse relationship between the quantity produced and per unit fixed costs
• Waiting


  Delayed action that happens until some other productive action is done on the item produced, usually nonvalue added as the goods await further action at a subsequent time
• Waiting sometimes occurs because there is a lack of coordination and timing between complementary activities within an organization or a process
• Transporting


  The action of moving an item from one location to another
• Eliminating transportation waste requires a focus on the flow of materials, machines, and people, as when parts move directly from one process to an adjacent one, the distance travelled is minimal
• Unnecessary Paperwork or Processing


  Can be reduced by converting documents into digital form to save money, increase productivity, save space, and make documentation and information sharing easier, using technologies like e-forms, workflow applications, and web servers
• Unnecessary Inventory


  Storing parts, pieces and documentation ahead of requirements, with the best inventory being zero inventory
• Excess Motion


  Excess movement of workers around the manufacturing floor
• Defects


  In manufacturing, produced parts not manufactured as required or not working as intended, and in service environments, services delivered late, not providing the information customer requested, or giving incorrect information verbally or in writing
• Causes of Defects


  • Physical causes
  • Human causes
  • Organizational causes
• Underutilized Employees


  A situation when an organization cannot obtain maximum benefit from its employees, cannot wisely wield its workforce, or cannot load them with work effectively