 |
|
What is iTLS™
What is iTLS™®?TLS is abbreviation for TOC Lean Six Sigma, but there is more to it. iTLS™ is simply a management philosophy that guides you to understand the problems deeply and solve them with more permanent impact. Meanwhile TLS recognizes the existence of natural variability of processes and attempts to control processes statistically within their required specifications. TLS attempts to understand the real problem, priorities, clearly define the real need, and put in place practical solutions; then look for the next improvement opportunity. iTLS™ is new generation of continuous improvement (CPI) model that logically combines three powerful CPI philosophies, their tools and techniques. iTLS™ harmonizes interaction of Theory Of Constraint, Lean and Six sigma in a synergic mix that optimizes financial results in significantly larger magnitude than if any of these practices were deployed alone. Implementation of iTLS™ can improve customer’s experience, lower costs, and build better leaders if it is done right. iTLS™ accomplishes that by focusing on delivering results through fundamental process knowledge. iTLS™ applies common sense, business and scientific tools to improve the processes and products of a company. They are applicable across every discipline including: Production, Sales, Marketing, Design, Administration and Service…. iTLS™ has been tested in array of environments nationally and internationally with outstanding results. iTLS™ has been applied successfully in United States, UK, France, Germany, Israel, Mexico, Brazil, Finland, Canada, India, China, Spain, Ireland, and Hungary. Researches and Case StudiesResearchesLean, Six Sigma or iTLS™ for process improvement?Effects of Combined Approach of Theory Of Constraints, Lean and Six Sigma on Process Improvement Reza M. Pirasteh Most organizations producing products and/or providing services are faced with urgency of productivity, quality leadership, and higher efficiencies. Customers are asking for cost reductions while at the same time demanding higher quality levels. Companies which are not prepared to respond to their customer requirements and cost parameters could be replaced with domestic or international rival companies that possess these capabilities. The company in this study is a global organization with over 21 plants and 211 team leaders using various process improvement methodologies. The company had over nine customer escalations from their major customers in year 2005, putting their continuing business and credibility in danger. The company was anxious to find a solution to achieve its goals. It had been using several different process methods including Just In Time (JIT), Lean, Six Sigma and Theory Of Constraints (TOC). Managers had a tendency to use the method they were most comfortable with or had shown the best results for a given type of project. At the upper management level however there was concern that the best management program was not being deployed at each plant location. Determining which approach or methodology would bring the most effective long-term effect seemed to be an ongoing challenge for the company. Upper management struggled with the problem which process improvement approach to choose. A decision was made to select among Six Sigma, Lean, or a new method that combined TOC, Lean and Six Sigma (iTLS™). Management’s goal was to achieve maximum cost savings and quality benefits by selection and adoption of this process improvement methodology. Initial Conditions To determine the effectiveness of the three methodologies, an experiment was designed that collected data for over 2 years. The results were statistically analyzed for significance between the three methodologies. The success of each methodology was determined by their aggregate contribution to verifiable financial savings as a result of process improvement projects. These savings were validated with the organization plant controllers and senior management. TLS as an alternative approach to continuous improvement was introduced to the company in addition to the existing Lean and Six Sigma, and deployed at several regions as a pilot plan and the results were examined. The data was gathered over 2 years from 21 plants where 211 team leaders had been trained in and were utilizing one of the three methodologies. These plants completed 105 projects cumulatively over the period of the study. The plant management and controllers reviewed these projects for accuracy in claimed improvements, savings and approach. While the results from all projects were documented, the plant personnel and the trainers were not aware of this comparative study as the research was designed in a double blind format to remove potential biases as much as possible. The goal was to provide the company with data in order to be able to make quantitative decisions and select the process improvement approach that best fit its quality and financial savings requirements. The company measured and tracked a series of process indicators as its key measurements which became drivers for project selections. Some of these measurements were: On-Time Delivery, Warranty Costs and Customer Returns, Inventory Reduction, Cycle Time Reduction and Cost of Scrap. The team leaders utilized one of the three methodologies mentioned above for improving the plant’s on-time delivery, final quality assurance, customer satisfaction index, warranty costs, and scrap costs. A plant in this study was defined as a production facility that was fully capable of prototyping, designing, producing and distributing customer products located in various regions in the United States. US operations were studied to reduce the impacts of cultural, socio-economical, political and other influences as much as possible on the results. The approach for assigning the plants with a methodology was a natural process due to their local preference, experience with a particular methodology and expertise. The assignment of methodologies was as follows:
Which method is more effective?In several phone interviews with the trainers and implementers at each region, the authors discussed the three methodologies and asked the trainers the following question:”Among Lean, Six Sigma or TLS, which of these methods do you believe is more effective?” Trainers responded that his or her approach was most effective according to their personal experience. One senior manager claimed that there were no significant differences between the three methodologies. FindingsTLS process improvement methodology appeared significantly more effective compared with the other two methodologies, Lean and Six Sigma, by delivering higher cost savings to the company. In this study TLS methodology application resulted in a contribution of 89% of the total savings reported, followed by 7% from Six Sigma and 4% from Lean applications (see figure 1). During this study, 105 projects were completed by the three methodologies. Data indicated that TLS projects delivered on average 2.6 times higher savings that Lean and 3.9 times higher than Six Sigma. Figure 1 - Contribution % by method applied
 Applying the Method The TLS model was deployed as a standard approach for continuous process improvements across the organization globally. To assist plant managers in using the TLS method, a general approach was developed by the authors. The sequence of activities begins with application of applying the 5-step TOC process to investigate the problem at hand from a 30,000 foot level or satellite-level, which is an approach to measure overall company’s performance (the entire value stream), at a high level (Breyfogle, 2003). After identifying the problem statement at a system level, the mobilized teams develop a specific problem definition that addresses the organization’s bottleneck. At this stage, four steps out of the six-step lean process should be applied (Womack & Jones, 2003). These steps would be:
By going through steps one through four, the resources of waste in the process would be identified and targeted for improvement. A parallel approach to implement 5-S at this phase also needs to be considered to bring order and discipline into the process activities. 5-S would also assist in sustaining any process gain achieved and promote continuous improvement as a way of work life. The value-add which is the effort that customer is willing to pay for it, would be identified through the value-stream-mapping process. A waste-less value stream would be considered by streamlining the activities, so that queues and unnecessary inventories and work-in-process would be minimized. By implementing pull systems, the value chain would produce products or services only upon customer requirement. The focus would be to produce the required amount, at the requested time to be delivered to the exact customer and location. After eliminating or minimizing the waste, the new process flow should be established. At this stage, the process input variables need to perform consistently and repeatedly with minimal variability to achieve the best results to minimize waste, scrap, or rework. This leads to steps five and six following the lean process methodology:
To pursue perfection, Six Sigma’s Define, Measure, Analyze, Implement, and Control (DMAIC), should then be applied to identify and isolate the source(s) of process variation and systematically remove or minimize those variations. During this stage it may be necessary to perform design of experiments (DOE) to establish the optimal settings for the critical factors that have been identified. Upon establishing the optimal process variable settings, it is necessary to establish standard operating procedures and control mechanisms to ensure that the process critical factors will remain in statistical control and will not drift over time significantly. Application of Poke-Yoke and statistical process control is essential to sustain the process gains and provide an early warning system to prevent process variability. A process audit also needs to be designed to monitor process performance over time to ensure that the process gains are maintained. If any deviations are observed during the audit process, they should be the triggers for corrective and preventive action plans. For further reading
Summary
Author Reza (Russ) Pirasteh, PhD., MBB, CLM. Has earned PhD in Engineering, MBA in Industrial Management, BS in Industrial Engineering, Master Black Belt- Lean Six Sigma, Certified Lean Leadership trainer, with 25 years of experience in implementation of continuous improvement systems. Member of IE, APICS and ASQ. Case Studies:iTLS Implementation Improves Brazilian Company's PerformanceReza M. Pirasteh, Celso Calia It is clear that for-profit enterprises manufacturing products strive to achieve their targeted revenues from their production reliably utilizing their available capacities and resources. Unreliable and below target production levels lead to low revenues and high inventories, causing high operating expenses. As an outcome, profit and ROI are typically compromised. This situation also creates an enormous amount of stress and frustration on the organization's critical resources potentially jeopardizing the future revenue opportunities. Continuous Process Improvement (CPI) approaches such as Lean, Six Sigma and TOC have been applied to help organizations to improve their efficiencies and profitability. However, there had not been research to quantify the effects and contributions of each of these approaches which led to a recent scientific research conducted from 2003 to 2005. This research also tested effects of a integrated approach applying the three methodology in a logical sequence and compared its effect with the implementations that were using each one of the CPI methods alone. The integrated continuous process improvement tested in the research is called iTLS. It applies the Theory Of Constraint, introduced by Eli Goldratt, Lean which is best known as Toyota Production Systems (TPS), and Six Sigma developed by Motorola, in a sequence in order to optimize each approach's core strength. Taking over two and a half years and involving 21 manufacturing plants with 211 CPI team leaders implementing their preferred CPI approaches,105 projects were completed. The research also quantified the financial contributions realized through implementation of each one of these CPI approaches. The statistical analysis of the results indicated that Lean and Six Sigma contributed significant financial results for their organizations. Both Lean and Six Sigma contributed similar results (P-Value of 0.622, did not indicate significant difference between the two approaches, considering financial benefits factor.) However, the integrated approach, applying TOC, Lean and Six Sigma in logical sequence, resulted in financial benefits that were over 4 times (4X) higher (P-Value of 0.0000, indication of high degree of significance), if either one of these methodologies were applied alone. (For research click here.) One company that used the integrated approach is Votorantim, which is the 4th largest private Brazilian group and operates in several countries in various market segments, such as mining, metal industries, cement, paper, steel, and fruit juices. Five facilities have adopted and benefitted from the Integrated TOC, Lean, Six Sigma, iTLS approach for continuous improvement developed by Dr. Reza Pirasteh, introduced publicly in 2006 (Pirasteh & Farah 2006), in a deployable form. Two of the plants in this case study were mining operations and three were metallurgical plants. In this case study the iTLS approach successfully synchronized production with the available capacity levels while providing process stability. This approach was smoothly implemented through involvement and participation of the organizations' people and their powerful commitment for success. The Integrated TOC, Lean, Six Sigma Model
The application of this integrated system to production for continuous process environments ensured that the invested capacities and resources were converted into stable production flow generating profitable revenues. Results The case study that follows is a summary of application of iTLS in a number of Brazilian conglomerates includes mining plants, ore concentrating plants, and metallurgical production plants. In all cases studied, when the iTLS was applied, within 3 to 4 months production throughputs significantly increased. Continuing with the implementation with additional 3 to 4 months the processes stabilized while achieving the desired strategic target production levels. This was previously perceived as impossible. The new performance levels are significantly exceeding previous production thresholds without adding and investing in additional capacity. Consequences were simply generation of more revenues, more profits and higher ROI. Case Study Initial Condition
Application The iTLS model was implemented in all plants simultaneously. The model was applied to bring stable and robust process flows to the market place consisting of the following basic elements:
There is a direct correlation between responses to the operations' drum and process stability and the amount of financial gains achieved. Once the process drum was identified based on the optimal capability of the constraint resource, the operations drum became the pace for the material release and the shipments. The constraint operations needed to be protected against variability caused by the feeding and interdependent operations, in order to ensure that full capacity was being converted to the product. In operations with continuous process environments, protecting the constraint which sets the operation drum and shipments was accomplished by creating sized protective buffers feeding them to ensure continuous flow of throughput to the market place. Once adequately sized and implemented, buffers absorbed the process random variability shocks on the constraint resource and the shipments. It was important to note that the impact of the variability was buffer loss of volume or level, which needed to somehow recuperate. This was possible by utilizing the excess capacities at the feeding operations acting as virtual protective capacity. This allowed them to work when needed, at a pace which was higher (~10%) than the constraint or drum and the shipment's pace to replenish used buffers. Therefore, any operation with capacity below 110% of the capacity of the drum, was tagged as a constraint, because it could potentially have a global adverse effect and jeopardize the throughput. It may seem that the operation becomes temporarily unbalanced. Then the work teams began working on these operations, in terms of getting more from what they have by reducing waste and stabilizing them by reducing variability by applying lean and Six Sigma tools. This model used buffer management to optimize decisions making based on interpreting the behaviour of the Buffers over-time. Buffers became the story tellers by letting the operations management know what is going on in the entire flow and allow them to anticipate potential disruptions, identify causes and derive actions for our Continuous Process Improvement (CPI), using Statistical Process Control tools. The repeatability of results achieved with iTLS implementations was consistent with expectations. The following were some of the results achieved through implementation of this approach in all plants:
Eugenio Hermont, General Manager of Votorantim Metais Unidade Tres Marias states that "...we have succeeded in another great achievement... that is why Tres Marias achieving all targets...." Synergetic application of integrated TOC, Lean and Six Sigma, iTLS, provided a rapid and effective approach to improve capacity and productivity in metallurgical mining plants, which significantly improved the operations profitability and meeting 100% customer commitments. This model applied TOC to focus where to make necessary changes, Lean was applied to remove waste and Six Sigma tools were applied to control process performance and variability.
|
 |
