1 part one (processes) - Lean Construction Institute

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USING SIX-SIGMA TO MEASURE THE GROWTH MATRIMPACT IX POSITIVE THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY

Michael Vega, PE / CPE LCI San Diego, Community of Practices (CoP) January 16, 2014

PART ONE (PROCESSES)

USING SIX-SIGMA TO MEASURE THE GROWTH MATRIMPACT IX POSITIVE THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

1

USING SIX-SIGMA TO CORRELATE THE GROWTH MA TRIXPRINCIPLES TO THE USA 3 TOYOTA 14 PRINCIPLES

USA (3 PRINCIPLES)

DEPLOYED & POTENTIAL:

THIS MANUFACTURING ENGINEERS “POINT” OF VIEW

IN TONIGHTS PRESENTATION I WILL CONVINCE YOU TO GO BEYOND “PULL SYSTEMS” AND EMBRACE THE OTHER 13 TOYOTA PRINCIPLES. AND IF I DO A GOOD JOB TONIGHT, YOU WILL SAY “OH, THEY MAKE WIDGETS ITS THE SAME AS CONSTRUCTION” USING SIX-SIGMA TO MEASURE THE POSITIVE IMPACT THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY THE PRESENTATION COVERS 13 MODULES AND CAN BEST BE DESCRIBED AS A “SAMPLER PLATE”, I AM AVAILABLE BY PHONE TO FILL IN ANY BLANKS THAT I LEAVE ! MY CHALLENGE TONIGHT IS TO TAKE TWO DIFFERENT INDUSTRIES AND DEMONSTRATE TO YOU THAT THE PROCESSES AND BUILDING BLOCKS (EXCEPT FOR THE EACH INDUSTRIES SLANG LANGUAGE) ARE THE SAME! I WILL ALSO DISCUSS “SHOULD WE CONTINUE TO SELF CERTIFY”?

2

DEPLOYED & POTENTIAL:

THIS MANUFACTURING ENGINEERS “POINT” OF VIEW

1. THE CONSTRUCTION INDUSTRY HAS ADOPTED THE TOYOTA PRODUCTION SYSTEM (TPS) AS ITS MODEL TO DEPLOY “LEAN CONSTRUCTION”. 2. THE CONSTRUCTION INDUSTRY, SPEAR HEADED BY LCI HAS FOCUSED ON THE “VITAL FEW” OF THE 14 TOYOTA PRINCIPLES, NAMELY “PULL SYSTEMS” 3. I AM HERE TONIGHT TO TALK ,“OBSERVATIONS”, “MEASUREMENT” AND “STANDARDS” THAT YOU MIGHT ADOPT FOR YOUR QUALITY JOURNEY !

USING SIX-SIGMA TO MEASURE THE POSITIVE IMPACT THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY 4. I WILL PRESENT MY POINT OF VIEW IN 13 MODULES, STARTING OUT BY SHOWING A CORRELATION BETWEEN MANUFACTURING / CQI TERMS. 5. MY INTENT TODAY IS TO SUGGEST BY EXAMPLE THAT YOU USE “STATISTICIAL THINKING”, THAT MEANS USING METRICS & ANALYSIS TO ASSIST YOU IN MANAGING YOUR PROJECTS AS A ADDITIVE TO THE EXPERIENCE OF PAST PROJECTS. 6. 6 BY USING “STATISTICIAL THINKING” YOU CAN ANALYZE POTENTIAL ISSUES AT A MACRO LEVEL (30,000 FT) VERY EARLY IN THE PROJECT LIFE CYCLE, GETTING MORE BANG FOR THE BUCK. 7. I WILL PRESENT TO YOU A CASE STUDY THAT WAS COMPLETED UTILIZING THE DESIGN & BUILD (D&B) DELIVERY METHOD AND MEASURED WITH SIX-SIGMA. 8. I WILL DISCUSS WITH YOU THE MAUNFACTURING INDUSTRIES (SME) LEAN CERTIFICATE PROGRAM , AND LATER I WILL DISCUSS 4 OF THE 20 TOOLS THAT I USE IN MY WORK. 9. I WILL CONCLUDE DESCRIBING HOW SIX-SIGMA PERFORMANCE MEASURES/METRIC WILL DEMONSTRATE TO YOUR CUSTOMERS THAT YOU ARE “LEAN”

AGENDA PART-1, LEAN IN MANUFACTURING & CONSTRUCTION

• • • •

MOD-01_THE EVOLUTION OF QUALITY WITHIN MANUFACTURING MODMOD--02_(TOYOTA) DIALMOD DIAL-A-CAR vs (CONSTRUCTION) STATIC LINE ASSEMBLY & CONSTRUCTION MOD--03_THE EVOLUTION OF LEAN / SIX SIGMA MOD MOD--04_14 MOD 04 14 PRINCIPLES OF THE TOYOTA WAY

ROSETTA STONE DISCOVERED IN 1799 IN EGYPT

GREEK (CONSTRUCTION) TERMS

HIEROGLYPHICS (QUALITY/MANUFACTURING) TERMS

TONIGHT I WILL TRY TO BE THE ROSETTA STONE BETWEEN (CONSTRUCTION & MANUFACTURING)

3

AGENDA PART-1, LEAN IN MANUFACTURING & CONSTRUCTION

• • • • • • • •

MOD-01_THE EVOLUTION OF QUALITY WITHIN MANUFACTURING MODMOD--02_MOD MOD 02_MOD--02_(TOYOTA) DIALDIAL-A-CAR vs (CONSTRUCTION) STATIC LINE ASSEMBLY & CONSTRUCTION MOD--03_THE EVOLUTION OF LEAN / SIX SIGMA MOD MOD--04_14 PRINCIPLES OF THE TOYOTA WAY MOD 05 POINT & INDUSTRY COUNTERPOINT MOD--05_POINT MOD MOD--06_WHAT OTHERS ARE DOING:THE S.M.E. LEAN MANUFACTURING MOD CERTIFICATE PROGRAMPROGRAM-121 BODIES OF KNOWLEDGE MOD--07_QUALITY CERTIFICATES THAT DENOTE “LEAN” TO YOUR CUSTOMERS MOD BREAK

PART-2, SIX-SIGMA IN MANUFACTURING & CONSTRUCTION

• • • • • •

•

MOD-08_HOW CAN SIX SIGMA (THE METRIC) BE USED AND ADAPTED TO MODCONSTRUCTION. MOD--09_THE COST OF PRECISION vs ACCURACY MOD MOD--10_TOYOTA MOD 10 TOYOTA PRINCIPLE #6, #6 STANDARDIZED TASKS ARE THE FOUNDATION OF C.Q.I. MOD--11_I PREPARED A DESIGN & BUILD CONSTRUCTION CASE STUDY FOR THE MOD SIX--SIGMA INSTITUTE, I WILL DISCUSS THE RESULTS. SIX MOD--12_MEANS & METHODS _ONE PIECE FLOW REMOVES (MUDA) MOD MOD--13_4 QUALITY TOOLS TO FIND SOLUTIONS (MACRO LEVEL PLANNING) MOD PLANNING)

PLUS / DELTA

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

POINT “A”

#1-Long-term Philosophy

I BELIEVE THAT SOME FORM OF THE 80/20 RULE WAS USED TO GET FROM THE 14 TOYOTA PRINCIPLES TO PRINCIPLE #3, PULL SYSTEMS

#2,#3, #4,#5 , #6,#7 & #8 Right Process produces right result

#9,#10 & #11 Value to Organization by developing people

#12,#13 & #14 Solving root problems bl

#3, Pull Systems

Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal 80/30 rule he called the "vital few and trivial many" and reduced it to writing.

POINT “B”

4

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

#1-Long-term Philosophy

AFTER FINDING PRINCIPLE #3 AS THE “VITAL FEW” IS WAS A LOGICAL STEP TO FIND PRINCIPLE #11, AND WITHIN #11 IS (IPD)

#2,#3, #4,#5 , #6,#7 & #8 Right Process produces right result

POINT “B” #9,#10 & #11 Value to Organization by developing people

#12,#13 #12 #13 & #14 Solving root problems

Principle 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.

#11, Partners & Suppliers

POINT “C”

MOD-01

The Evolution of Quality within Manufacturing

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

5

NOTICE THAT 80% OF THE FATHERS OF QUALITY ARE STATISTICIANS & 20% ARE MANUFACTURERS

1

Vilfredo Pareto -80-20 Rule

Dr DEMING, SPC

Walter Shewhart-SPC

2

3 TPS

Philip Crosby-Zero Defects

Genichi Taguchi Bill Smith –Six Sigma

Kaoru IshikawaFishbone charts

DR DEMINGS CONTRIBUTION TO JAPAN 1950-DEMING TEACHES SPC TO JAPANESS ENGINEERS

1965-TOYOTA WINS DEMING APPLICATION PRIZE

MY GURU

PLAN-DO-CHECK-ACT In 1960, the Prime Minister of Japan (Nobusuke Kishi), acting on behalf of Emperor Hirohito, awarded Deming Japan's Order of the Sacred Treasure, Second Class The citation on the medal recognizes Deming's contributions to Japan's industrial rebirth and its worldwide success.

6

Vilfredo Pareto In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth.

Where Vital Few & Trivial Many came from? Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal principle he called the

y and reduced it to "vital few and trivial many" writing.

MY 2ND GURU

As a result, Dr. Juran's observation of the "vital few and trivial many", the principle that 20 percent of something always are responsible for 80 percent of the results, became known as Pareto's Principle or the 80/20 Rule.

MOD-02

FS

GROWTH

MATRIX

FF

THERE ARE ONLY 4 “LOGIC” TYPES IN SCHEDULING!

SS

SF SCHEDULING (4) BUILDING BLOCKS

DIAL-A-CAR vs CONSTRUCTION IS A “STATIC LINE”

7

THERE ARE ONLY 3 TYPES OF ASSEMBLY LINES IN MANUFACTURING

1

3

GATELINE

MATRIX

STATIC LINES

GROWTH

2

PRODUCTION LINE

MANUFACTURING (3) BUILDING BLOCKS

DIAL-A-CAR vs

CONSTRUCTION IS A “STATIC LINE”

MATRIX

FF

SS

SF

GATELINE

GROWTH

STATIC LINES

FS

PRODUCTION LINE

SCHEDULING (4) BUILDING BLOCKS

MANUFACTURING (3) BUILDING BLOCKS

REMEMBER-THINK BUILDING BLOCKS , DON’T LET THROUGHPUT , COST ($) OR VOLUME DETER YOU

8

MOD-02A THE ”DIAL-A-CAR” CONCEPT DROVE SINGLE PIECE FLOW IN MODULE 02-A I WILL DISCUSS “DIAL-A-CAR” DIAL A CAR AND THEN SHOW AN IDEALIZED MANUFACTURING FLOW,

MACHINING CENTER

”CELLULAR”

QUEING

FABRICATE BUCKET SHOPS_SHIP-RECEIVE-WAREHOUSE

CUSTOMER BUYS CAR

ORDER

BUFFER-JIT STORES

”DIAL-A-CAR”

GATELINE

DEALER TRANSMITS ORDER

BUFFER-JIT STORES

GATELINE

CAR MFGR CUTS PRODUCTION ORDER

CONCEPT DROVE SINGLE PIECE FLOW! GATELINE

PRODUCTION LINE 2ND TIER RE-TOOL

REWORK STATION (STATIC LINE)

2ND & 3RD TIER SUPPLIERS

11

MANUFACTURE

9

MACHINING CENTER

”CELLULAR”

QUEING

FABRICATE BUCKET SHOPS_SHIP-RECEIVE-WAREHOUSE

CUSTOMER BUYS CAR

ORDER

BUFFER-JIT STORES

”DIAL-A-CAR”

GATELINE

DEALER TRANSMITS ORDER

BUFFER-JIT STORES

GATELINE

CAR MFGR CUTS PRODUCTION ORDER

THE ORDER IS THE VOICE OF THE CUSTOMER GATELINE

PRODUCTION LINE 2ND TIER RE-TOOL

REWORK STATION (STATIC LINE)

2ND & 3RD TIER SUPPLIERS

MANUFACTURE

11

MACHINING CENTER

”CELLULAR”

QUEING

FABRICATE BUCKET SHOPS_SHIP-RECEIVE-WAREHOUSE

CUSTOMER BUYS CAR

BUFFER-JIT STORES

GATELINE

DEALER TRANSMITS ORDER

BUFFER-JIT STORES

GATELINE

CAR MFGR CUTS PRODUCTION ORDER

THE “CAR ORDER” IS THE VOICE OF THE CUSTOMER

ORDER

GATELINE PRODUCTION LINE 2ND TIER RE-TOOL

REWORK STATION (STATIC LINE)

2ND & 3RD TIER SUPPLIERS

11

MANUFACTURE

10

MOD-02B MANUFACTURING FROM THE “ORDER” TO THE SINGLE PIECE FLOW

IN MODULE 02-B I WILL SHOW AN IDEALIZED MANUFACTURING FLOW,

BUCKET SHOPS BUFFER STORE OR JIT SHIP

BUCKET SHOPS BUFFER STORE OR JIT SHIP

CELLULAR MANUFACTURING

BUFFER STORAGE & JIT , CAN BE ANYWHERE !

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE 1ST TIER RECEIVE

(BUFFER/JIT) WAREHOUSE BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

BUCKET SHOPS BUFFER STORE OR JIT SHIP

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

11

HOGGING MACHINES = (ROUGH-IN)

FINISHING MACHINES = (FINISHES)

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

IN MACHINING CENTERS PARTS MOVE BETWEEN “SINGLE PURPOSE” OPERATIONS AND RETURNED TO STORES AFTER EACH OPERATION C O O GAT TELINE

ONE OPERATOR RUNS 1-1/2 MACHINE TOOLS

STAT TIC LINES

MACHINING CENTER

STAT TIC LINES

MACHINING SHOPS OR BUFFER-JIT STORES CENTERS:

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

CELLULAR MANUFACTURING ONE OPERATOR RUNS 3 MACHINE TOOLS (ELIMINATES “DWELL” TIME) WHERE OPERATOR IS IDLE. BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

CELLULAR BUFFER-JIT STORES MANUFACTURING:

STAT TIC LINES

IN CELLULAR MANUF PARTS MOVE BETWEEN “SINGLE PURPOSE” OPERATIONS AND MOVE TO THE NEXT OPERATION WITHOUT GOING TO STORES GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

12

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

SUB-ASSEMBLY BUFFER-JIT STORES ASSEMBLY:

STAT TIC LINES

HEAVY ASSEMBLIES ARE “STATIC STANDS” AND PARTS MOVE TO THE SUBASSEMBLY, BASICALLY A HAND DONE ASSEMBLY, NOT O GOOD GOO FOR O LARGE G THROUGHPUT ASSEMBLIES GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

BUCKET SHOPS BUFFER STORE OR JIT SHIP

MANUFACTURING

BUCKET SHOPS BUFFER STORE OR JIT SHIP

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

BUCKET SHOPS BUFFER STORE OR JIT SHIP

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

13

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MACHINING CENTER

MANUFACTURING

CELLULAR MANUFACTURING

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

THIS SAYS IT ALL!

BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

14

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

STATIC LINES

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND

MANUFACTURING

15

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

MANUFACTURE

SHUNT STAND

CELLULAR MANUFACTURING

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

PULL SYSTEMS BUFFER-JIT STORES

STAT TIC LINES

GAT TELINE

STAT TIC LINES

MACHINING CENTER

PRODUCTION LINE SUB-ASSEMBLY, ASSEMBLY

SHUNT STAND (REWORK)

16

FLYING SQUADS PROTECT THE LINE AND RESTART THE LINE WHEN POSSIBLE

BUCKET SHOPS_SHIP SHOPS SHIP-RECEIVE-WAREHOUSE RECEIVE WAREHOUSE

FLYING SQUADS SPOTTED THROUGHOUT A PLANT , RESPOND LIKE PARA-MEDICS TO AN INCIDENT!

PULL SYSTEMS BUFFER-JIT STORES

GAT TELINE

FIXING LINE STOPPAGE:

PRODUCTION LINE SHUNT STAND

GROWTH DIAL-A-CAR MATRIX

MOD-02C

vs CONSTRUCTION IS A “STATIC LINE” IN MODULE 02-C I WILL DISCUSS “CONSTRUCTION” IN AN IDEALIZED FLOW TO DEMONSTRATE THE SIMILARITY TO MANUFACTURING

17

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

FABRICATION

BUFFER-JIT STORES

GC BIDS WORK

BID-AWARD

”STATIC LINE”

CONSTRUCTION IN THE FIELD HAS N0T ADOPTED GATELINE, CELLULAR OR PRODUCTION STATIC LINE LINE CONCEPTS BUILDIING WORK

GC GETS NTP

PULL SYSTEMS

SIT TE WORK

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

GC/CM “QUALITY UP”

PUNCH LIST

GCs, SUB-CONTRACTORS & CMs

ACCEPTANCE

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

FABRICATION

BUFFER-JIT STORES

GC BIDS WORK

BID-AWARD

GC/CM “QUALITY UP”

GCs, SUB-CONTRACTORS & CMs

SIT TE WORK

GC GETS NTP

STATIC LINE

BUILDIING WORK

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

PUNCH LIST ACCEPTANCE

CONSTRUCTION

18

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

FABRICATION

BUFFER-JIT STORES

GC BIDS WORK

BID-AWARD

SIT TE WORK

GC GETS NTP

STATIC LINE

GC/CM “QUALITY UP”

BUILDIING WORK

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

PUNCH LIST

GCs, SUB-CONTRACTORS & CMs

ACCEPTANCE

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

FABRICATION

BUFFER-JIT STORES

GC BIDS WORK

BID-AWARD

GC/CM “QUALITY UP”

GCs, SUB-CONTRACTORS & CMs

SIT TE WORK

GC GETS NTP

STATIC LINE

BUILDIING WORK

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

PUNCH LIST ACCEPTANCE

CONSTRUCTION

19

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

BUFFER-JIT STORES

GC/CM “QUALITY UP”

PUNCH LIST

GCs, SUB-CONTRACTORS & CMs

ACCEPTANCE

SPECIAL ORDER MAT

PRE-CONSTRUCTION

BUFFER-JIT STORES

GC/CM “QUALITY UP”

GCs, SUB-CONTRACTORS & CMs

SIT TE WORK

BID-AWARD

FABRICATION

JOB-SITE

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

GC BIDS WORK

CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

GC GETS NTP

BUILDIING WORK

STATIC LINE

STATIC LINE

BUILD DING WORK

BID-AWARD

SIT TE WORK

GC BIDS WORK

JOB-SITE

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS GC GETS NTP

FABRICATION

PUNCH LIST ACCEPTANCE

CONSTRUCTION

20

SPECIAL ORDER MAT

PRE-CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

BUFFER-JIT STORES

GC/CM “QUALITY UP”

PUNCH LIST

GCs, SUB-CONTRACTORS & CMs

ACCEPTANCE

SPECIAL ORDER MAT

PRE-CONSTRUCTION

BUFFER-JIT STORES

GC/CM “QUALITY UP”

GCs, SUB-CONTRACTORS & CMs

SIT TE WORK

BID-AWARD

FABRICATION

JOB-SITE

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS

GC BIDS WORK

CONSTRUCTION

CATALOG ORDER MAT

BUFFER-JIT STORES

GC GETS NTP

BUILD DING WORK

STATIC LINE

STATIC LINE

BUILD DING WORK

BID-AWARD

SIT TE WORK

GC BIDS WORK

JOB-SITE

PULL SYSTEMS

GC BUYS OUT THEIR 2ND & 3TH TIER SUBS GC GETS NTP

FABRICATION

PUNCH LIST ACCEPTANCE

CONSTRUCTION

21

The Evolution of LEAN / SIX SIGMA

MOD-03

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

WHAT IS LEAN SIX SIGMA?

SIX-SIGMA TO MEASURE WITH

SIX-SIGMA THE PROCESS LEAN REMOVES WASTE, FROM ABOVE AND REMOVES “VARIATION” BELOW THE WATERLINE IN THE PROCESS

22

HOW IS VARIATION CLASSIFIED SPECIAL CAUSE -IS ASSIGNABLE

COMMON CAUSE- IS UNASSIGNABLE

NORTH ROOF

SOUTH ROOF

RUN CHART

VARIATION IN NAIL GUN

MOD-04 The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and production system. Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it "The Toyota y Way y 2001". It consists of principles p p in two key areas: continuous improvement, and respect for people.

23

Guiding Principles at Toyota Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities. Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honoring mutual trust and respect between labor and management. Pursue growth through harmony with the global community via innovative management. management Work with business partners in research and manufacture to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships. Established in 1992, revised in 1997. (Translation from original Japanese)

The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach and production system.

MOD-04

Toyota first summed up its philosophy, values and manufacturing ideals in 2001, calling it "The Toyota Way 2001". It consists of principles in two key areas: continuous improvement, and respect for people.

14 PRINCIPLES OF THE TOYOTA WAY In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

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14 PRINCIPLES OF THE TOYOTA WAY Long-term philosophy Principle 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Right process will produce right results Principle 2. Create continuous process flow to bring problems to the surface.· Principle 3. Use pull systems to avoid overproduction. DEPLOYED BY LCI Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.) Principle 5. Build a culture of stopping to fix problems, to get quality right the first time. Principle 6. Standardized tasks are the foundation for continuous improvement and employee empowerment. Principle 7. Use visual control so no problems are hidden. Principle 8. Use only reliable, thoroughly tested technology that serves your people and processes. In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

14 PRINCIPLES OF THE TOYOTA WAY Value to organization by developing people Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Principle 10. Develop exceptional people and teams who follow your companys philosophy. philosophy Principle 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.

IN PROCESS BY LCI

Solving root problems drives organizational learning Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu). Principle 13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). Principle 14. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

25

MOD-04A

MATRIX TOYOTA TOYOTA-PRINCIPLE #11 PARTNERS & SUPPLIERS GROWTH

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

Toyota 14 Principles

#1-Long-term Philosophy

#2,#3, #4,#5 , #6,#7 & #8 Right Process produces right result

POINT “B” #9,#10 & #11 Value to Organization by developing people

HERE IS HOW IT WAS DONE!

#12,#13 #12 #13 & #14 Solving root problems

Principle 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.

#11, Partners & Suppliers

POINT “C”

26

IPD--BOTH STYLES IPD IPD

BOEING COMPANY SYSTEMS INTEGRATOR TIER-I

TIER-I (OWNER)

SYSTEMS INTEGRATOR (IPD) TIER-II

TIER-II SUPPLIERS DESIGN AGENT

TIER-II (GE ENGINE) DESIGN AGENT

TIER-III (CM)

TIER-III (GC)

TIER-III (A&E)

TIER-IV (SUB-CONTRACTOR) TIER-III (HONEYWELL) APU DESIGN AGENT

DO YOU A&E / GC’s “WALK YOUR TALK”?

WILL A&E & GC FLOW DOWN IPD D&B, PPP TYPE CONTRACTS TO THEIR SUB-CONTRACTORS?

AS OWNERS FLOW DOWN IPD, D&B & PPT TO A&E / GC

27

POINT GRO WTH MATRIX

& INDUSTRY COUNTERPOINT

MOD-05

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

POINT & INDUSTRY COUNTERPOINT POINT •(CQI) PROCESSES ARE CURRENTLY BEING PUSHED “UPHILL ”BY INDUSTRY TO THE OWNER. •INDUSTRY NEEDS TO GET ON WITH THEIR OWN INTERNAL (CQI)

INDUSTRY COUNTERPOINT, YOU CAN HAVE 2 OF THE 3 NO MORE NO LESS

28

POINT & INDUSTRY COUNTERPOINT POINT

INDUSTRY COUNTERPOINT •CONTINUOUS QUALITY IMPROVEMENTS (CQI) LIKE ISO--9001 WILL NOT ISO BUBBLE UP FROM THE BOTTOM

•MANY A&E, CM’s AND CG’s IN THE MIDDLE-WEST HAVE ISO-9001 CERTIFICATION, FORD QI CERTIFICATIN, LETS NOT BE OBVIOUS BY OUR ABSENCE, SHOULD CUSTOMERS DEMAND DEMONSTRATED CQI

•THE CONSTRUCTION COMPANIES NEED TO BE CONVINCED THAT (CQI) IS A CUSTOMER DEMAND •AND THAT IT WILL IMPROVE THEIR BOTTOM LINE.

M W

S W

MOD-6

What Others are doing: The S.M.E., LEAN Manufacturing Certificate Program 121 bodies of knowledge

29

THE LEAN ALLIANCE •CONSIDER USING THE S.M.E. ALLIANCE CRITERIA AS A “PICK LIST”, AND LET THE “VOICE OF YOUR CUSTOMER” (VOC) & THE “VITAL FEW” SELECT THE REQUIREMENTS / CRITERIA

THE LEAN ALLIANCE IN MANUFACTURING IS BIG! The Society of Manufacturing Engineers (SME), is the world’s leading professional society supporting manufacturing education. (SME0 influences more than half a million manufacturing engineers and executives annually. The Society has members in 70 countries and is supported by a network of hundreds of chapters worldwide. www.sme.org The Association for Manufacturing Excellence (AME), founded in 1985, is the premier organization for the exchange of knowledge in enterprise excellence. (AME) members come together to explore Lean thinking and other enterprise improvement methods, exchange best practices, and network in order to advance their careers and improve the performance of their organizations. (AME) sponsors the annual International Lean Conference and publishes the award winning Target magazine. www.ame.org

The Shingo Prize, was established in 1988 to promote awareness of lean concepts and to recognize companies that achieve world-class operational excellence status around the globe. The Shingo Prize philosophy is that world-class business performance is achieved through a deep understanding and integration of lean principles, lean systems of management, and the wise application of lean tools and techniques to create a sustainable culture of continuous improvement. www.shingoprize.org

American Society for Quality (ASQ) , has been the world’s leading authority on quality for more than 60 years. With more than 85,000 individual and organizational members, the professional association advances learning, quality improvement and knowledge exchange to improve business results and to create better workplaces and communities worldwide. As a champion of the quality movement, ASQ - offers technologies, concepts, tools and training to quality professionals, quality practitioners and everyday consumers. www.asq.org

30

MOD-6A

•CONSIDER USING THE SME ALLIANCE CRITERIA AS A “PICK LIST”, AND LET THE “VOICE OF YOUR CUSTOMER” (VOC) SELECT THE REQUIREMENTS / CRITERIA

WEIGHTED (%) MODULE BRONZE SILVER

15%

20%

Lean Certification 121 Body of Knowledge WBS LVL-V

GOLD

25%

MODULE 1-Cultural Enablers

20

1.1. Principles of Cultural Enablers 1.2. Processes for Cultural Enablers 1.3. Cultural Enabler Techniques and Practices 60%

30%

15%

MODULE 2-Continuous Process Improvement

60

2.1. Principles of Continuous Process Improvement 2.2. Continuous Process Improvement Systems 2.3. Continuous Process Improvement Technique & Practice

10%

20%

30%

MODULE 3-Consistent Lean Enterprise Culture

17

3.1. Principles of Consistent Lean Enterprise Culture 3.2. Processes for Developing Consistent Lean Enterprise Culture 3 3 Consistent Enterprise Culture Techniques & Practices 3.3. 15%

30%

30%

MODULE 4-Business Results 4.1.Principles of Business 4.2 Measurement Systems 4.3.Key Lean related measures

100% 100% 100%

Copyright © 2008 Society of Manufacturing Engineers

SIX-SIGMA AS A MEASURE IS A BUSINESS METRIC!

24

121 BOK

31

WHAT DOES A SMESME-LEAN BRONZE CANDIDATE NEED TO KNOW? L1-Factory, Office and Service L1L2--Team Facilitation L2 L3--Project Management L3 L4--Appropriate Measurement of Results L4 L5--Activities where the work happens L5 L6--Cause and Corrective Actions L6 L7--Cellular Layout/Concepts L7 L8--Flow L8 L9--Jidoka L9 L10--Mistake Proofing L10 (POKA YOKE) L11--Problem solving L11 L12--Pull/Kanban L12 L12-Pull/Kanban L13--SMED L13 L14--Standard Work L14 L15--Tactical results measurement L15 L16--Takt time/customer demand L16 L17--Total Productive Maintenance (TPM) L17 L18--Value L18 L19--5S L19 L20--Visual Management L20 L21--Waste L21 L22--Gap analysis L22 L23--Team dynamics L23 L24--Planning methods/control methods) L24

http://en.wikipedia.org/wiki/Main _Page (LEAN DESCRIPTION)

24 bodies of Knowledge

DENOTES SME BODIES OF KNOWLEDGE (BOK)REFERENCED IN LCI LITERATURE & WIKIPEDIA

Copyright © 2009 Society of Manufacturing Engineers

WHAT DOES A SMESME-LEAN SILVER CANDIDATE NEED TO KNOW? http://en.wikipedia.org/wiki/Main S1-Aligning support activities S1_Page S2--Analyzing and understanding organizational dynamics S2 S3--Applying lean tools at a tactical level and integrating the tools into a value stream. S3 S4--Awareness of external assessment vehicles S4 S5--Benchmarking S5 S6--Cell development, implementation and integration S6 S7 S7--Creating basic pull relationships for beginning and ending of the value stream S8--Creating Lean financial models for their value stream S8 S9--Creating, managing and tracking improvement results within a value stream S9 S10--Effective communication S10 S11--Employee/supplier/customer involvement and empowerment S11 S12--Environment/Sustainability within the value stream S12 24 bodies of Knowledge S13--Establishing information flows S13 S14--Evaluating human capabilities, identifying skill gaps and developing multi S14 multi– –skilled people with basic understanding of Lean S15--Influencing the organization to align with and support the value stream S15 S16--Lean S16 L in i Administration/Transactional Ad i i t ti /T ti l DENOTES SME BODIES OF S17--Leveling S17 KNOWLEDGE (BOK) S18--Managing for daily improvement S18 REFERENCED IN LCI LITERATURE & WIKIPEDIA S19--Mentoring others on the lean journey S19 S20--Planning lean workshops and events S20 S21--Point of use: material and information S21 S22--Selecting, organizing and leading multiple crossS22 cross-functional teams S23--Value stream mapping and analysis S23 S24--Value stream visuals S24 Copyright © 2009 Society of Manufacturing Engineers

32

WHAT DOES A SMESME-LEAN GOLD CANDIDATE NEED TO KNOW? G1-applying lean principles and tools to drive improvements. G1G2--showing measurable, positive results for an enterprise orchestrating the transformation G2 of multiple and extended value streams. G3--defining and leading enterprise strategic transformation. G3 G4--3P (Production Process Preparation) G4 (A-5S) G5--Advanced lean financial models G5 G6--Capital structure G6 TODAYS G7--Knowledge transfer G7 PRESENTATION G8--Developing a learning organization G8 G9--Organizational design & development G9 G10--Enterprise value stream mapping & analysis G10 G11--Human resource planning G11 G12--Integration of other methodologies including 6G12 6-sigma, TOC, TQM, etc. G13--Lean supply chain development G13 G14--Market strategy G14 26 bodies of Knowledge G15--Mentoring and coaching G15 G16--Organization training strategy and delivery G16 G17 G17--Product development/project value stream mapping DENOTES SME BODIES OF G18--Rewards, Recognition and Empowerment G18 KNOWLEDGE (BOK) G19--Right sized operation, equipment and facility capacity planning G19 REFERENCED IN LCI G20--Strategy deployment G20 LITERATURE & WIKIPEDIA G21--Value stream organizational alignment G21 G22--Effective communication and planning G22 G23--Risk management G23 http://en.wikipedia.org/wiki/Main G24--Social responsibility G24 _Page G25--Environmental/sustainability G25 G26--Respect for the individual and humanity G26 Copyright © 2009 Society of Manufacturing Engineers

MOD-7

Quality Certificates that denote “LEAN” to customers

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

33

DIFFICULTY and IMPORTANCE, there is no template for determining DIFFICULTY and IMPORTANCE.

Bulls Eye Charts, the Best tool to use to evaluate how to deploy a Quality Process/Manual

Its for a Company to determine based on the Voice of their Customer (internal & external)!

Their culture! lets not forget the benefit to the bottom line !

Principle 7. Use visual control so no problems are hidden.

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

Principles

SME 12 Principles

SME 12 Principles

BULLS EYE CHARTS

POINT “A” SME 12

Module #1-Cultural Enablers

Module #2-Continuous Process Improvement

HOW IN THE WORLD DID I GET FROM SME’s 12 PRINCIPLES (POINT “A”) TO POINT “B”?

Module #3-Consistent Lean Enterprise Culture

Module #4-Business Results

Principle #4.1,4.2,4.3

POINT “B”

34

MOD-7A

Quality Tools BULLS EYE CHARTS

Principle 7. Use visual control so no problems are hidden.

How can the “BULLS-EYE” Charts help to know what Certificate to go after?

• • • •

Manufacturing is very “VISUAL” industry (Bulls Eye charting, Visual Control Boards etc.) Construction should follow suite. MOST IMPORTANT & LEAST DIFFICULT TO DO IS THE PLACE TO BE!

TOUGH TO GET HERE

EASY TO GET HERE, BUT NO GAIN!

EXPENSIVE TO GET HERE

THE BEST PLACE TO BE!

35

FINDING THE “LOW HANGING FRUIT” USING “PARETO ANALYSIS” TO GET THERE!

FOCUS ON THE “VITAL FEW” FEW •The Pareto effect or Pareto’s law: a small proportion of causes produce a large proportion of results. •It is this phrase that is most commonly used in talking about the Pareto effect – ‘the vital few and the trivial many”

Copyright ©STAGE 2008 DEPLOYMENT Society of Manufacturing Engineers

USING DIFFICULTY / IMPORTANCE TO FIND “LOW HANGING FRUIT”,GETS FRUIT”,GETS THERE QUICKLY EVERY COMPANY HAS ENABLERS & CONSTRAINTS A BENCHMARK & QFD SHOULD BE DONE TO FIND THE “LOW HANGING FRUIT” 6 POINTS 9 POINTS 3 POINTS

1 POINT

Copyright © 2008 Society of Manufacturing Engineers

36

MOD-7B QUALITY FUNCTION DELOYMENT (QFD) (THE HOUSE OF QUALITY)

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

Principles

SME 12 Principles

SME 12 Principles

BULLS EYE CHARTS

POINT “A” SME 12

Module #1-Cultural Enablers

QFD

Module #2-Continuous Process Improvement

HOW IN THE WORLD DID I GET FROM SME’s 12 PRINCIPLES (POINT “A”) TO POINT “B”?

Module #3-Consistent Lean Enterprise Culture

Module #4-Business Results

Principle #4.1,4.2,4.3

POINT “B”

37

QFD & THE HOUSE OF QUALITY RELATIONSHIP LEGEND =STRONG ROOF GABLE GIVES THE NAME “HOUSE OF QUALITY” (6th)

“HOW” DESIGN REQUIREMENTS” (2nd) “WHAT” CUSTOMER REQUIREMENTS (1 t) (1st)

=MEDIUM =WEAK

VOICE OF THE CUSTOMER (3rd)

TARGET VALUES BY FSC (4TH) VOICE OF COMPETITION (5th)

Principle 7. Use visual control so no problems are hidden.

MOD-7C BENCHMARKING

38

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

SME 12 Principles

Principles

SME 12 Principles

SME 12 Principles

BULLS EYE CHARTS

POINT “A” SME 12

QFD (5 TIMES)

Module #1-Cultural Enablers

Module #2-Continuous Process Improvement

HOW IN THE WORLD DID I GET FROM SME’s 12 PRINCIPLES (POINT “A”) TO POINT “B”?

Module #3-Consistent Lean Enterprise Culture

Module #4-Business Results

POINT “B”

Principle #4.1,4.2,4.3

BENCHMARKING

BENCHMARKING WHAT IS IT? VOICE OF THE CUSTOMER How Do We Do It?

What To Benchmark INTERNAL DATA

CRITICAL SUCCESS FACTORS

DATA ANALYSIS

ENABLERS

EXTERNAL DATA

Who Is Best?

How Do They Do It?

COMPETITION

39

BENCHMARKING DEFINED

•

BENCHMARKING DEFINED BY DAVID KEARNS –XEROX:

•

• •

COMPETITIVE BENCHMARKING IS THE CONTINUOUS PROCESS OF MEASURING OUR PRODUCTS, SERVICES AND PRACTICES AGAINST OUR TOUGHEST COMPETITORS OR THOSE COMPANIES RECOGNIZED AS THE LEADERS:

IN 1993 MIKE WAS HIRED TO BENCHMARK –NEW NEW PLANT CONSTRUCTION BEST PRACTICES. BENCHMARKING CONCLUSIONS WERE PEER REVIEWED AND DEPLOYED

MOD-7D Finding the Quality Membership or Certificate that suites “YOU”

40

LCI

COMPANY/INDIVIDUAL MEMBERSHIP

TBD

PMI

COMPANY/INDIVIDUAL, HOW TO MANUAL

TBD

AGC

INDIVIDUAL CERTIFICATE

4 MONTHS

SME

INDIVIDUAL/CORPORATE & EDUCATOR CERTIFICATE

2 YEARS

FORD Q1

COMPANY CERTIFICATE

1 YEAR

ISOISO9001

COMPANY CERTIFICATE

2 YEARS

ISO-ISO 9001 The Principles of Quality Management and ISO 9001 ISO 9001 is based on EIGHT principles of quality management, and these in effect underpin the standard and help to define its purpose and direction. They are:

Customer focus

For any forward thinking business concerned about quality improvement, customers and their requirements should dictate much of their strategy. Without customer satisfaction the the business will ultimately fail, or at best tread water. Organisations should understand their customers' needs and strive to meet or even exceed them.

Leadership

The strategy, direction and ultimate success of any business is to a great degree dependent upon its leadership, along with the environment and even the culture that they encourage within the organisation. A clearly communicated vision and constancy of purpose on the part of management is key to business improvement.

Involvement of people

It is an organisation's people that will actually provide the front line customer service and follow the vision of the leadership, but they need to be encouraged and involved.

Finding the Quality Membership or Certificate that suites “YOU”

COMPANY CERTIFICATE

Process approach

Some businesses are seemingly more process oriented than others (e.g. car manufacturing), however it is possible to see virtually all business activities and resources in terms of process. Managing in this way will enable greater efficiencies through a clearer view of what is happening.

IS ISO-9001, LIKE “ PRECISION VS. ACCURACY “ IT WILL BE DISCUSSED LATER IN THIS PRESENTATION? ISO-9001 IS THE HIGH WATER MARK OF QUALITY STANDARDS

2 YEARS

Mutually beneficial supplier relationships

Traditionally, smaller firms supplied parts or materials to larger manufacturers to meet a specified order. More however can be derived from this kind of relationship by seeing it instead as an interdependent partnership p p that p provides mutual benefits to both sides.

System approach to management

Management should view all business activities and interrelated processes as an integrated system. This will then encourage greater efficiency and effectiveness throughout the organisation.

Continual improvement

This should be a permanent objective of any organisation that really wishes to succeed and excel within its marketplace. Whatever the organisation does to improve quality and performance should be subject to a continuing cycle of review, and this should result in the further raising of targets and goals to new levels. This is simply necessary to keep ahead of the competition.

INTERNATIONAL ORGANIZATION FOR STANDARIZATION (ISO) “9001”

Factual approach to decision making

Any key decisions made about direction or strategy should be based on sound data that has been gathered via predetermined business measures.

41

BREAK

USING SIX-SIGMA TO MEASURE THE GROWTH MATRIMPACT IX POSITIVE THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY

Michael Vega, PE / CPE LCI San Diego, Community of Practices (CoP) January 16, 2014

PART TWOTWO(APPLICATION

42

MOD-08

HOW CAN SIX SIGMA (THE METRIC PORTION) BE USED AND ADAPTED TO CONSTRUCTION!

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

AVERAGE COMPANY 3.6 TO 4.4 SIGMA

SIX-SIGMA IS 3.4 DEFECTS PER MILLION OPPORTUNITIES

NOT A PART OF THIS PRESENTATION

WHAT IS SIX SIGMA?

SIX-SIGMA REMOVES VARIATION IN THE PROCESS

SAID ANOTHER WAY: $3.40 OF E/O PER MILLION DOLLARS OF CONSTRUCTION

USE SIX-SIGMA TO MEASURE PERFORMANCE

43

SIX SIGMASIGMA-AS A METRIC

USE ONE DOLLAR ($) AS ONE DEFECT PER MILLION OPPORTUNITIES

$1.00=1$1 00 1 D.P.M.O. D PM O

HOW SIX SIGMA MOD-08A (THE METRIC PORTION) WITH A 3.0 SIGMA SHIFT CAN BE ADAPTED TO CONSTRUCTION

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

44

SIX--SIGMA TARGET SIX A-E-P-C

MOTOROLA INVENTED_1.5 SIGMA SHIFT

3.0 Sigma Shift in Process Mean 3.0

CONSTRUCTION SHOULD INVENT_3.0 SIGMA SHIFT

SIX--SIGMA TARGET SIX A-E-P-C

Target Sigma for Design services!

Target 4.9 sigma

3.0 Sigma Shift in Process Mean

CONSTRUCTION SHOULD INVENT_3.0 SIGMA SHIFT

45

SIX--SIGMA TARGET SIX A-E-P-C

Target Sigma for Design services!

Target 4.9 sigma

Target Sigma for Construction

Target 4.5 sigma

MOD-09

COSTS CAN GROW 4 TO 10 TIMES WHEN DEMANDING PRECISION VS ACCURACY

The COST of Precision vs Accuracy

46

-

AISC Specification: Code of Standard Practice for Steel Buildings and Bridges BEFORE USING SIGMA TO MEASURE PERFORMANCE! LOOK AT WHAT THE CONSTRUCTION INDUSTRY “MARKET” WILL ACCEPT

Column Plumb Criteria

Aircraft “Precision” a 747 airliner

<>0” INCH

Construction “Accuracy” 20 story bldg column

20 STORY BLDG

747 Standing on end (20 stories)

2” INCHES

20 story building

2,500 + Built in HONG KONG

1,500 Sold $250 + million each

WE SHOULD CONSIDER A 3.0 SIGMA SHIFT TO ADJUST FOR COMMON AND SPECIAL CAUSE VARIATION)

GROUND

$120 + million each

47

Manufacturing “Precision”, a car door

Construction “Accuracy “ A Girder – Beam connection DRIFT PIN ALIGNMENT

CAR DOOR

LASER ALIGNMENT

BRIDGE GIRDER

5-DRIFT PINS BEING USED TO ALIGN

IMAGINE USING A DRIFT PIN TO ALIGN A CAR DOOR!

48

MOD-10

TOYOTA PRINCIPLE #6 STANDARDIZED TASKS ARE THE FOUNDATION OF CQI

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

HOW DO YOU READ SIX SIGMA & BULLS EYE CHARTS TOGETHER GREEK

HIEROGLYPHICS

GREEK

HIEROGLYPHICS

49

HOW DO YOU READ SIX SIGMA & BULLS EYE CHARTS TOGETHER GREEK

HIEROGLYPHICS TO BE EXPLAINED AFTER THE BREAK

GREEK

HIEROGLYPHICS

CORRELATING P.S.& P.C. (ES) TO SUBSTANTIAL COMPLETION OF PROJECTS

50

MOD-10A TOYOTA PRINCIPLE #6 STANDARDIZED TASKS ARE THE FOUNDATION OF CQI READING THE MANUFACTIRING (1.5 SIGMA SHIFT)

HOW DO YOU READ SIX SIGMA IN MANUFACTURING (WITH A 1.5 SIGMA SHIFT)

GREEK

HIEROGLYPHICS

0.98 SIGMA=700,000 DPMO

1.5 SIGMA=500,000 DPMO

2.2 SIGMA=300,000 DPMO

2.34 SIGMA=200,000 DPMO 2.78 SIGMA=100,000 DPMO

GREEK

6.0 SIGMA=3.4 DPMO

HIEROGLYPHICS

51

MOD-10B TOYOTA PRINCIPLE #6 STANDARDIZED TASKS ARE THE FOUNDATION OF CQI (WORK BREAKDOWN STRUCTURE )

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

PEELING THE ONION OF WORK BREAKDOWN STRUCTURE (WBS) LVL-IV LVL III LVL-III LVL-II LVL-I

METRIC levels are like ONIONS LAYERS. Each layer is more detailed The closer to core the more detail Too many levels and you will cry.

52

ROOF

3RD-FL

2nd-FL

OUR

“HOLY GRAIL”

HOW TO TRANSFER THE MANUFACTURING CONCEPTS TO CONSTRUCTION HOGGING MACHINES IN MANUFACTURING = (ROUGH-IN) IN CONSTRUCTION

FINISHING MACHINES = (FINISHES) IN CONSTRUCTION 1ST-FL

BSM’T

FS

GROWTH

MATRIX

FF

SS

SF

•DON’T FORGET THE SCHEDULING UNIVERSE IS ONLY (FS-FF-SS-SF) •AND SOMEHOW WE ACCEPT, MAINTAIN 1,500 TO 12,000 ACTIVTY SCHEDULES, WHERE 70% OF THE ACTIVITIES ARE THE “TRIVIAL MANY” •ITS IN YOUR POWER TO OBJECT & STOP THIS!

SCHEDULING UNIVERSE LVL-IV

•THE “TRIVIAL MANY” : •ARE SUCH THINGS AS USING THE 33 CSI DIVISIONS AND THE SUB-DIVISIONS AND MAKING A TEMPLATE LIKE “BUY-OUTPREPARE SUBMITTAL-SUBMITTAL-OWNER REVIEW-REJECT/RESUBMIT-APPROVEPROCURE-FABRICATE-DELIVER & INSTALL”, THESE 10 X 33 X CAN BETTER BE DONE IN XLS, DON’T FLOOD THE P3/P6 SCHEDULES WITH THINGS BETTER MANAGED IN XLS

LVL-III LVL-II LVL-I

53

SAMPLE-BASELINE SAMPLESCHEDULE COUNT WITH IMPORTANT ELEMENTS DEFINED

THE 2,000 ACTIVITIES EXCLUDES THE “TRIVIAL MANY” TYPE ACTIVITIES LIKE (BUYOUT, SUBMIT, APPV, PROCURE, DELIVER & INSTALL)

2,000

OVERVIEW-WHAT THE MOD-10C OVERVIEWCONSTRUCTION INDUSTRY HAS DONE TO CONVERT TO A T.P.S.

In 2004, Dr. Jeffrey Liker, a University of Michigan professor of industrial engineering, published The Toyota Way. In his book Liker calls the Toyota Way "a system designed to provide the tools for people to continually improve their work.”The system can be summarized in 14 principles.

54

DEMING (PDCA) & PROJECT DELIVERY WORK FLOW ARE THE SAME! PLAN

DO

CHECK

ACT

Contractors Value Stream

MOD-11

A Six Sigma Construction Case Study A Design &B Build Testt C Cell D i ild (D&B) T ll

55

A CASE STUDY

SIX SIGMA METRICS MUST BE “TAILORED” FOR CONSTRUCTION

TODAY, LEAN & SIX-SIGMA are Institutionalized in Manufacturing So not much is said !

1991 Data - Design & Build (D&B) Test Cell

TEST CELLS • DESIGN & BUILD COST $ 9.9 MILLION • TEST & ENERGIES EQUIPMENT $20.0 MILLION • SCHEDULE SCHEDULE--12 MONTHS CRITERIA & LONG LEAD EQUIP, 24 MONTHS DESIGN & BUILD

56

The 3 Candidate Design Measurements!

• •

Measuring using the Construction Specifications: 250 words/pages 1332 pages=330,000 (Potential DPMO) Measuring using the Drawings: 1,200 symbols/valves, etc. X 80 drawings =96,000 250 word/information, etc. X 80 drawings =20,000

•

• •

•

Measuring using the Building Code:

• • • •

Building Code=800 Code 800 pages Electrical/Mechanical Code=1,200 pages Local Building Code=800 pages Total 2,800 pages X 250 words=700,000

1.5 SIGMA SHIFT

3.0 SIGMA SHIFT

OPPORTUNITIES

9,910,000

9,910,000

DEFECTS

270,000

2,750

DPMO

27,245

277

DEFECTS (%)

2.72%

0.03%

YIELD (%)

97. 28%

99.97%

PROCESS SIGMA

3.423

4.953

Calculating the Design & Build (D&B) Test Cell Six Sigma

DESIGN Actual Costt $1,360,000 A t lC $1 360 000 Plan check errors $78,000 Design errors $95,000

CONSTRUCTION Actual Cost $8 $8,550,000 550 000 Constr errors. $97,000

A DPMO IS A PROJECT DOLLAR ($), A DEFECT IS EACH DOLLAR ($) OF A ERROR OR OMISSION

57

MOD-11A

A Six Sigma Construction Case Study OTHER CRITERIA & ISSUES TO USE TO MEASURE PERFORMANCE

WHERE DID THE TERM “PUNCH LIST” COME FROM: The phrase takes its name from the historical process of “punching” a hole in the margin of the document, next to one of the items on the list. This indicated that the work was completed for that particular construction task. Two copies of the list were “punched” at the same time to provide an identical record for the architect and contractor

WE HAVE MADE A INSTITUTION FOR “DEFECTS” TO RESIDE IN!

58

USING THE “PUNCH LIST” TO MEASURE THE PROJECT SIGMA! DURING CONSTRUCTION

•

•

• • • •

AT SUBSTANTIAL COMPLETION

DURING THE ACTUAL CONSTRUCTION DURATION DETERMINE SEVERITY OF EACH ITEM IN THE CURRENT “PUNCHLIST” /NC/D) OR WHATEVER ITS CALLED BY YOU. YOU USE 1010-6-2-1 TO INDICATE SEVERITY , USE THESE PLUG NUMBERS TO OBTAIN THE D.P.M.O : 10=$50,000.00 6=$30,000.00 2=$10,000.00 1=$1,000.00 NOW EXTEND THE PRICE THE INDIVIDUAL D.P.M.O. OF EACH (X ) THE NUMBER OF PUNCH LIST ITEMS. THEN OBTAIN THE CURRENT PAY APPLICATION AND FIND THE CURRENT STORED IN PLACE (MINUS GC/GR), THIS BECOMES YOUR “OPPORTUNITY “. NOW GO TO THE SIGMA CALCULATOR ENTER THE DATA. NOW READ YOUR SIGMA.

• • • •

• •

• • • •

DETERMINE SEVERITY OF EACH ITEM IN THE CURRENT “PUNCHLIST” / NC / D) OR WHATEVER ITS CALLED BY YOU. USE 1010-6-2-1 TO INDICATE SEVERITY , USE THESE PLUG NUMBERS TO OBTAIN THE D.P.M.O : 10=$50,000.00 6=$30,000.00 2=$10,000.00 1=$1,000.00 NOW EXTEND THE PRICE THE INDIVIDUAL D.P.M.O. OF EACH (X ) THE NUMBER OF PUNCH LIST ITEMS. THEN OBTAIN THE CURRENT PAY APPLICATION AND FIND THE CURRENT STORED IN PLACE (MINUS GC/GR), THIS BECOMES YOUR “OPPORTUNITY “. “ NOW GO TO THE SIGMA CALCULATOR ENTER THE DATA. NOW READ YOUR SIGMA

• • • •

FREE SIGMA CALCULATORS ABOUND

1.5 SIGMA SHIFT

3.0 SIGMA SHIFT

OPPORTUNITIES

9,910,000

9,910,000

DEFECTS

*270,000

2,750

D.P.M.O.

27,245

277

DEFECTS (%)

2.72 2 72

0.03% 0 03%

YIELD (%)

97.28

99.97%

PROCESS SIGMA

3.42

4.953

59

MEANS & METHODS_ONE PIECE FLOW REMOVES (MUDA) MOD-12

GREEK (CONSTRUCTION) TERMS

HIEROGLYPHICS (QUALITY/MANUFACTURING) TERMS

CONSTRUCTION IS A “STATIC LINE”!

FLYING FORMS, SIMILAR IN MANUFACTURING TO SINGLE MINUTE EXCHANGE OF DIES (SMED) “FLYING FORMS” ALSO CALLED “GANG FORMS” IS SMED

2.3.7. Countermeasure Activities •2.3.7.1. Mistake and Error Proofing (Poka Yoke) •2.3.7.2. Quick Changeover/Setup Reduction (SMED) Copyright © 2008 Society of Manufacturing Engineers

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THINK PRE-FABRICATION OUR INDUSTRY IS NOW STARTING TO SPOOL PIPE, ”CUBE/MODULARIZE” LOOSE COMPONENTS INTO ONE PIECE EQUIPMENT!

FIRE PUMP MANUFACTURING, WE TRUST, BUT WE VERIFY!

CONTRACTOR

OWNER

IMPROVE THE SCHEDULE; SKID MOUNT THE FIRE PUMP & PUMP HOUSE

LY FIRE PUMP SUB-ASSEMBLY

The Fire pump sub-system are fabricated in 5 cities in the USA

The Fire pump sub-system are final assembled & tested in Texas

NO FIREPUMPFIREPUMP-NO PERMIT

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MOD-13

4 Quality Tools I use to Find Solutions (MACRO LEVEL PLANNING)

Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.)

MOD-13A

Quality Tools

PRIOR ATTEMPTS TO DEPLOY LEAN CONSTRUCTION & SIX SIX--SIGMA (THE PROCESS)

SAID JURAN SAID….. “All quality improvement occurs on a project project-by--project basis and in no other way.” by

•

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“A BRIDGE TO FAR” DEPLOYING LEAN CONSTRUCTION & SIX SIX--SIGMA (THE PROCESS)

SELECT PARTNERS

MOD-13B

Quality Tools ISHIKAWA DIAGRAMS ((ALSO CALLED FISHBONE CHARTS))

1. A CUSTOMER SURVEY OF PLANT ENGINEERING & MAINTENANCE SERVICES WAS PERFORMED! 2. THE DATA WAS REDUCED BY USING THE “FISH BONE” CHARTS 3. IF DONE AGAIN TODAY I’LL BET THE RESPONSES WON’T BE MUCH DIFFERENT, WHAT DO YOU THINK?

Principle 7. Use visual control so no problems are hidden.

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1991 FISHBONE OF CUSTOMER SERVICE SURVEY

HOW CLOSE IS THIS SURVEY TO YOUR SITUATION?

USING SIX-SIGMA TO MEASURE THE GROWTH MATRIMPACT IX POSITIVE THAT “LEAN” HAS TO OFFER IN PROJECT DELIVERY

Michael Vega, PE / CPE LCI San Diego, Community of Practices (CoP) January 16, 2014 NOTICE: THE CHARTS, ISSUES & POINTS OF VIEW PRESENTED ARE MINE ALONE

Plus/Delta

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