2005: Lean Sigma and Simulation, So WhatTMs the Correlation? v2

This paper will explore the fundamental relationships between Lean Sigma and simulation. A basic overview of Lean Sigma includes: 1) Lean Sigma philosophy, 2) Basic tools, 3) Theory of Variation, 4) SPC, 5) Process capability,6) Lean Sigma infrastructure, and 7) DMAIC and DFSS processes. Simulation will be applied to the appropriate areas of the overview. Improvement in the robustness of the Lean Sigma methodology will be discussed and the strengths of simulation will be presented as capable and preferable enhancements to the Lean Sigma processes. Quotes from Lean Sigma and industry leaders will be presented. Simulation will be presented as an innovation tool enhancing the Lean Sigma DMAIC and DFSS processes. 1 LEAN SIGMA OVERVIEW Developed initially by the Japanese manufacturing industry, Lean, as a management strategy, has evolved from the Kaizen philosophy of constant improvement. The mastery of Kaizen, resulting in revolutionary products with unbeatable prices on the world market, was a main contributor to Japan’s economic success from the late 1950s to the early 1990s. Toyota is a great example of this. Toyota has understood not only how to master Lean within its manufacturing plants, but also how to transfer the concept successfully to the entire supply chain, from suppliers to dealerships, and on top of that to all of the supporting processes. Lean means eliminating waste from any process or product. The first step is to identify the true Value Stream of a business process. A clearly defined and agreed upon Value Stream throughout the organization is the basis for any improvement action to achieve high process performance at a significantly reduced cost base. Conceptually, the business processes in Lean are viewed from the customer’s perspective. The value of an activity is solely defined by the customer. Activities that add value to the customer are those that make the product or service resemble more of what the customer actually wants and for which he is willing to pay. Non value-added activities, 20 however, do not create any value for the customer, and therefore all nonessential, non-value-added activities are considered as waste. Waste is any activity in the workflow that adds time, effort or cost but does not create value. Six Sigma has received wide acclaim as a methodology, process and vision to accomplish process improvement. Professor Larry S. Aft, PE, Chairman of the Industrial Engineering Department at Southern Polytechnic State University in a course delivered through the Center for Quality Excellence entitled Six Sigma Implementation, Champion and Green Belt Training states, “ Six Sigma is a customer focused, well defined problem solving methodology supported by a handful of powerful statistical tools.” He further states, “Continuous improvement is driven by the execution of carefully selected projects. The goal of the Six Sigma approach is to take small steps forward and no steps backward.” Aft further states that “the objective of Six Sigma is to reduce variation through continuous process improvement. This leads to customer satisfaction.” Motorola was instrumental in the initiation of Six Sigma. In fact, the phrase “Six Sigma” was coined by Motorola. They further stated that a defect is anything that results in customer dissatisfaction. General Electric (GE) has become an avid supporter of Six Sigma over recent years. According to their website, Six Sigma is not a “secret society, a slogan or a cliché. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.” They further state that the word “sigma” is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defect’s you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities. An “opportunity” is defined as a chance for nonconformance, or not meeting the required specifications. This means we (GE) need to be nearly flawless in executing our key processes.”