Innovation and Incremental Improvement

1. 6 σ & Kaizen

2. KAIZEN

4. KAIZEN-The Concept Masaki Imai

5. KAIZEN-The Concept

6. KAIZEN INNOVATION KAIZEN-The Concept

8. KAIZEN-The Practice On the spot improvement Improved work procedures New System and Facility improvement Results Inexpensive Mostly inexpensive Small investment Implementation Cost Individual work area Group Work area Systems and Process Target Everyone QC Circles Managers and Professionals Involves Common Sense Seven QC Tools Seven QC Tools New Seven Tools Seven QC Tools New Seven Tools Professional Skills Tools Individual Group Management

13. KAIZEN & INNOVATION

14. Time Figure 2.2 Ideal pattern from innovation Figure 2.3 Actual pattern from innovation Time

15. INNOVATION plus KAIZEN KAIZEN KAIZEN INNOVATION INNOVATION New Standard New Standard

16. KAIZEN and INNOVATION Better suited in fast growth economy Works well in slow growth economy 10. Advantage Large investment but little effort to maintain Little investment but great efforts to maintain 9. Practical Requirements Technology People 8. Effort Orientation Scrap and Rebuild Maintenance and Improvement 7. Mode Individual ideas and efforts Collective group efforts, systems approach 6. Approach Selected champions Every-one 5. Involvement Abrupt and volatile Gradual and constant 4. Change Intermittent and non-incremental Continuous and Incremental 3. Time frame Big Steps Small Steps 2. Pace Short term and dramtic Long-term and business as usual 1. Effect INNOVATION KAIZEN

17. Another comparison of Innovation and KAIZEN Innovation KAIZEN Creativity Individualism Specialist-oriented Attention to great leaps Technology-oriented Information: closed, proprietary Functional (specialist) orientation Seek new technology Line + staff Limited feedback Adaptability Teamwork (systems approach) Generalist-oriented Attention to details people-oriented Information: open, shared Cross-functional orientation Build on existing technology Cross-functional organization Comprehensive feedback

18. 6 Sigma

22. SIX SIGMA DEFINATIONS 6 σ 3.4 99.9997% 5 σ 320 99.98% 4 σ 6 210 99.4% 3 σ 66 800 93.3% 2 σ 308 000 69.2% 1 σ 690 000 30.9% Your Sigma is… Your DPMO is…. If your yield is…

24. Six Sigma Performance Source: The Six Sigma Way by Peter Pande and Others Less than 2 crashes 4100 crashes Out of every 500,000 computer restarts 1.8 seconds of dead air 1.68 hours of dead air For every week of TV broadcasting per channel 1 misdelivery 3,000 misdeliveries For every 300000 letters delivered With Six Sigma Quality With 99 % Quality

26. Six Sigma Results Six Sigma Savings as % of revenue vary from 1.2 to 4.5 % For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million. Investment: salary of in house experts, training, process redesign. Annual Savings Company *$1.5 billion (*since inception in 1998) JP Morgan Chase $600 million Honeywell $500 million Johnson & Johnson $ 16 billion (*since inception in 1980s) Motorola $2.0+ billion General Electric

29. D efine C ontrol I mprove A nalyze M easure D efine the problem and customer requirements. M easure defect rates and document the process in its current incarnation. A nalyze process data and determine the capability of the process. I mprove the process and remove defect causes. C ontrol process performance and ensure that defects do not recur. “ Common sense” doesn’t mean “commonly done” or when done, done well. Six Sigma Methodology

34. Define - Performance Standards 1 opportunity for a defect per scheduled delivery of freight. No. of defect opportunities per unit Delivery earlier or later than 1 hour. Defect Scheduled time or zero minutes deviation Target LSL = -60 minutes USL= +60 minutes Specification limits Process starts when an order is received Ends when goods are received & signed for at customers desk. Process measurement – Deviation from scheduled delivery time in minutes. Project Y measure Timely delivery Output characteristic A scheduled delivery of freight Output unit

44. 6 Sigma vs Kaizen

45. Six Sigma & Kaizen- The Difference RELIES UPON GROUP DYNAMICS FIXED PLAN OF IMPLEMENTATION Difficult and High Cost Simpler and Low cost Implementation Improve Existing System Statistical Method Improvement Framework-DMAIC Improve Existing System Human Based Approach YES YES Continuous Improvement YES YES Quality Improvement SIX SIGMA KAIZEN

47. Thank You