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The Many Valuesof a Cup of CoffeeThe Many Valuesof a Cup of Coffee

600x600x

CoffeeCoffeeCoffeeCoffeeBeansBeansBeansBeansCoffeeCoffeeCoffeeCoffeeBeansBeansBeansBeans

$0.005$0.005$0.005$0.005$0.005$0.005$0.005$0.005

00

100100

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McDoMcDoMcDoMcDoCoffeeCoffeeCoffeeCoffeeMcDoMcDoMcDoMcDoCoffeeCoffeeCoffeeCoffee

$0.40$0.40$0.40$0.40$0.40$0.40$0.40$0.40

$0.05$0.05$0.05$0.05$0.05$0.05$0.05$0.05

10x10x

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400400

500500

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Customer are willing to pay for valueCustomer are willing to pay for value

600x600x

Coffee+ Coffee+ Processing + Processing + SERVICE +SERVICE +

EXPERIENCEEXPERIENCE

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ProcessingProcessing

The basic principlesThe basic principles

•We’re in business to sell products and services to customers.

• The customer is the only true arbiter of value.value.

•Waste diminishes the process of value creation

• A perfect process has no waste.

• Perfect processes maximize customer value.

Process is a value creationIf not

It is just a waste

Value added

5% Value added

Overproduction

Inefficiency process

Motion Defect

Inventory

Transportation

Waiting

Underutilizedskill

Ove

rproductio

n•Making more than is required by the next

process

•Making it earlier than is required by the next process

•Making it faster than is required by the next process

Waste 1: O

verproductio

n

Example:

•More information than the customer needs

•Creating reports no one reads

•Making extra copies

Inefficiency process • Effort that adds no value to product or

service from the customers’ viewpoint

Example:

• Paper work (creating unnecessary report

•

Waste 2: Inefficiency process

• Redundant approval

• Repeated manual entry of data

• Double check, Triple check

Inve

ntory

•More material or information on hand than the customer needs right now

Example:

• Raw material (fruits, vegetables, meat)

•

Waste 3: Inve

ntory

•Office supplies including linen & sheets

• Files or work waiting to be worked on

•Work in process

Waste 4: W

aiting

• Idle time created while waiting for

Example:

•Waiting for machine repair

•

Waste 4:

•Copy machine

• The system to come back-up

•Queuing at front office

Transportatio

n • handling of materials or information from one point to another that does not add value

Example:

• Moving items in and out of storage

• Moving material from one workstation

Waste 5: Transportatio

n

• Moving material from one workstation to another

• Retrieving or storing files

• Carrying documents to and from

• Taking files to another person

• Going to get signatures

Waste 6: M

otio

n• Any movement of people or machines

that does not add value to the product or service

Example:

• Searching for items, tools, supplies, file,

information, etc.

Waste 6: information, etc.

• Sorting through materials

• Lifting boxes of items

Waste 7: D

efect

• Unwanted result. Defects result in rework, adaptations, and scrap

Example:

• Data entry error

• Pricing error

Waste 7: • Pricing error

• Missing information

• Missed specification

• Lost records

Underutilized skill • People are hired for specific jobs and

functions, but beyond these, their know-how, experience and creativity are underutilised and generally misunderstood.

• People’s motivation and problem-solving skills are not or not sufficiently encouraged.

Waste 8: U

nderutilized skill

encouraged.

• The value of transparency, communication and training is mostly underestimated.

• People’s involvement is key to any kind of improvement.

Sent those Sent those waste to ‘dustbin’

• The customer must be willing to pay for the activity.

• The activity must transform must transform the product or service in some way.

• The activity must be done correctly the first time.

Defining LeanDefining Lean

“A systematic approach to identifying and

Lean is:

“A systematic approach to identifying and

eliminating waste (non-value added activities)

through continuous improvement by flowing the

product at the pull of the customer in pursuit of

perfection.”

Things that you should know about about Lean business concept

Customer is king

customer is the center ofour universe — the customer’s wants, needs, and idea of value.

Feel the customer’s force like the Feel the customer’s force like the force of gravity. It is constant, undeniable, and unrelenting, but it is also our grounding and our base.

Hear, See, Speak by Fact &DataHear, See, Speak by Fact &Data

Understanding the reason for changes, unpredictability, defects, and cost based on facts and data

NotArguments, Issue, Intuitions

Follow the Value Stream• Value “flows” downstream, toward the customer. We

are intended to align our effort to the center of the value. We do not want spending energy but going nowherenowhere

• Streamline operations by targeting time, waste, responsiveness across the “supply chain” in order to

boost efficiencies and satisfaction

People first !

• People come first. They always come first. No matter where we are on our journey, you’ll only sustain Lean if our people are onboard and supportive.

• Our people are motivated and rewarded by success, not the tools. Tools don’t “win”; people do. People change their thinking and behaviors do. People change their thinking and behaviors and use tools accordingly. You need them both, but the people are what make or break you.

Genchi Genbutsu

(Go and See)

• get up off your butt, and see for yourself! E-mails, reports, conference calls, hearsay, even video —they can’t tell the whole story.

• firsthand observations and experience enable faster and more effective processes and faster and more effective processes and procedures.

Step by Step, Inch by Inch

Lean is a journey, not a destination. You live Lean every

day, through successesand setbacks alike. Lean is the force of a million little things, all

the

Step by Step, Inch by Inch

Lean is a journey, not a destination. You live Lean every

day, through successesand setbacks alike. Lean is the force of a million little things, all

thethetime. Lean is trying, doing, learning, and trying again —

and again..

thetime. Lean is trying, doing, learning, and trying again —

and again..

The art of simplicity• It’s a famous cliché: “Keep it simple” — but this is one

of the best practices of Lean. • When in doubt, simplify and eliminate. When

confronted with a decision, ask yourself “Which option is simpler?”

Project Model : DISC

Describe the process, opportunity, and goal

Examine the process & available data

Identify solutions, implement, and verify results

Establish monitoring to maintain the gain

DDefine

IInvestigate

SStreamline

CControl

We already have six sigma, why we should why we should have lean???

Because,Lean + 6 Sigma

= = powerful

combination

• A Lean views waste as anything that does not produce value; Six Sigma views waste as process variation.

• Lean focuses on process flow, and Six Sigma focuses on process variation which causes defects.

• Lean on speed ; six sigma working on • Lean on speed ; six sigma working on defect reduction

• Lean on efficiency; six sigma on effectiveness

• Both are creating a system that more faster and more responsive to customer

History of Development of Lean Six Sigma Methodology

Shewhart –Statistical method

F. Taylor –Time/motion study

Craft production

Eli Whitney –Product standard

Ford –Work Analysis

Sloan –Modern management Mass production

SPC

Assembly line manufacturing

Scientific management

Industrial production

Organized labor –

1900

1850

Deming –Statistical method

Juran –Process analysis

Smith/Welch –Statistical rigor/Org. infrastructure

Toyoda,Ohno,Shingo –

JIT, World class Mnf

Womack & Jones

Lean Six Sigma

Six SigmaLean Enterprise

TQM

Toyota Prod. System

Mass production

Quality controlOrganized labor –

Worker’s right

George, Lockhead,Martin, others 2000

1950

Source: “Lean Six Sigma: A Fusion of Pan-Pacific Process Improvement”, Malcolm T. Upton (Master Black Belt, George Group)

Lean tools…Lean tools…Lean tools…Lean tools…

• 5S• Poka Yoke• C3 (Compressing cash cycle)• Visual control• TPM (Total productive Maintenance)• Takt time• TOC (Theory of Constraint)• Multi process• Line Balancing• Line Balancing• Level Demand• One piece flow• standard work• Mistake Proofing• Level demand• Pull system• many mores…

5S (Work Area Management)

A structured system to manage working area with a standard in order to productivity

Japan EnglishBahasa

MeaningJapan EnglishBahasa

IndonesiaMeaning

Seiri Sorting Out Ringkas Pemilahan

Seiton Storage Rapi Penataan

Seiso Shining Resik Pembersihan

Seiketsu Standardize Rawat Pembiasaan

Shitsuke Self Discipline Rajin Disiplin

Seiri – Sorting Out

When it doubt, move it out!

Before After

Seiton – StorageA place for everything and everything in its place !

Before After

Seiso – ShiningCleaning and inspect !

Seiketsu – Standardization

Make up the rules and follow them!

• Establish standards for 3S (Sort –Set in Order – Shine)

• Attain the 3S standard conditions• Attain the 3S standard conditions

• Make the standards visual

• Assign responsibilities, determine– Who, What, Where, When,

and How

Shitsuke – Self discipline

Make it part of daily work and it becomes a habit!

• Ensure that 5S activities become a habit that everyone performs continually

• Build a commitment to adhere to 5S • Build a commitment to adhere to 5S standards

Poka-Yoke (Mistake proofing)

Poke-Yoke is an approach that eliminates a mistake from being made or makes the mistake obvious at a glance

Visual Control System

making the factory’s abnormalities and forms of waste so clear that even a beginner will recognize them!