Best Practices in Lean Six Sigma Process Improvement

306 Pages·2007·3.826 MB·English

by  Richard J. Schonberger

BEST PRACTICES IN
LEAN SIX SIGMA
PROCESS
IMPROVEMENT
A Deeper Look
RICHARD SCHONBERGER
JohnWiley&Sons,Inc.

‘‘Focusingonprocessinadditiontoresultsdifferentiatesleanthinkingfromconventional
thinkers’‘metrics’-drivensolefocusonresults.Schonbergerreinforcesthedistinction,
emphasizingprocessdata,seniorleaders’presenceatthepointofexecution,andaskingthose
performingtheprocesstohelpsetgoalsforimprovingit.’’
—DavidMann
ManagerLeanManagementandO.D.
Steelcase,Inc.
AuthorofCreatingaLeanCulture
‘‘Schonbergerhashitthenailonthehead—clear,concise,to-the-point—justwhatabookon
LeanBestPracticesshouldbe.ReadingBestPracticeswillresultinlotsof‘that’sexactlywhatI
seeatwork!’moments.’’
—BobMiller
DirectorofAdvancedFactoryManagement,AdvancedBionicsCorp
‘‘Oneoftheworld’sforemostauthoritiesonleading-edgemanagementpractices,Dick
Schonbergeroncemoreshedsnewlightonthepracticesofbest-performingcompanies. This
timefocusingonprocessimprovement,hisBestPracticesinLeanSixSigmaProcess
Improvementgivesreadersawhollynewunderstandingofthepromisesandpitfallsofleanand
sixsigma.’’
—H.ThomasJohnson
ProfessorofOperationsManagement
PortlandStateUniversity
2001&2007ShingoResearchPrizeLaureate
CoauthorofProfitBeyondMeasure
‘‘OverthedecadestherehasbeenaconstancyandadepthinSchonberger’swork.Thisbookhas
lessonsthattakeusrightbacktothefundamentalsofinvolvingeveryoneinimprovingour
processessothatweincreaseourabilitytomeetourUniversalCustomerWants.’’
—CarlaGeddes
Founder,HighPerformanceConsortium,Australia
‘‘Thisisaremarkablebook. Itshouldberequiredreadingforeveryexecutivestrugglingto
makehiscompanysuccessfulintheglobaleconomy—bothtodayandtomorrow. Richardtells
us(andshowsusbaseduponextensiveresearchnotsuppositions)thatLeanisajourneynota
destination. Thejourneyislongwithextensiverewardstothosewhosearenotdistractedand
persevere. Richardprovidesamplerecommendationstomakethatlongjourneyasuccessful
one.’’
—MichaelParis
President,Paris:Consultants,Inc.

BEST PRACTICES IN
LEAN SIX SIGMA
PROCESS
IMPROVEMENT
A Deeper Look
RICHARD SCHONBERGER
JohnWiley&Sons,Inc.
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LibraryofCongressCataloging-in-PublicationData:
Schonberger,Richard.
Bestpracticesinleansixsigmaprocessimprovement/RichardSchonberger.
p.cm.
Includesindex.
ISBN978-0-470-16886-8(cloth)
1. Sixsigma(Qualitycontrolstandard)2. Totalqualitymanagement.3. Production
management. I.Title.
HD62.15.S3652008
658.40013—dc22 2007022155
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
Contents
Preface vii
PART I
HYPER-COMPETITION 1
Chapter 1 MagnitudeAdvances in CompetitiveStandards and
Technologies 3
Chapter 2 Global Leanness: An Unstable Phenomenon 10
Chapter 3 BigQuestion: Does Lean BegetFinancial Success? 22
Chapter 4 Ultimate Trend: Improvingthe Rate ofImprovement 26
PART II
IMPROVEMENT GONE WRONG—AND MADERIGHT 45
Chapter 5 Waste Elimination, Kaizen, and Continuous Improvement:
Misdefined,Misunderstood 47
Chapter 6 The Metrics Trap 56
Chapter 7 The Case against (Much of) Management GoalSetting 71
PART III
BUILDINGACOMPETITIVE FORTRESS 83
Chapter 8 Fortressby Culture 85
Chapter 9 Vengeful Numbers 94
Chaper 10 ProcessImprovement: Stretching CompanyCapabilities 102
Chaper 11 Unique BusinessModels (Big Ideas) 111
PART IV
WHAT GOESWRONG: IMPRESSIVE COMPANIES AND
THEIR WEAKSPOTS 119
Chapter 12 Does Rapid Growth Putthe Brakes on Lean? 121
Chapter 13 Losing Their Way—or Not 132
PART V
LEANNESS: A CHANGINGLANDSCAPE 155
Chapter 14 Global Lean Champions:Passingthe Torch 157
v
vi Contents
Chapter 15 HowOverweightCompanies Get Lean 170
Chapter 16 Flow-Through Facilities 182
Chapter 17 External Linkages 195
PART VI
WHY INDUSTRIES RANKWHERE THEY DO 213
Chapter 18 LeannessRankingsfor Thirty-Three IndustrialSectors 215
Chapter 19 Electronics: AMetamorphosis 221
Chapter 20 Motor-Vehicle Industry:Earliest butLagging 231
Chapter 21 Aerospace-Defense: OEMsAre Soaring; SuppliersAre Not 245
Chapter 22 Other Industries 256
Epilogue 273
Index 275
Preface
Likemanywhoareveteransofsomesortofcrusade,mylatter-dayroleincludestrying
tomakesenseoutoftheconfusedstateofprocessimprovement.Theeasywaywould
bejusttorelyonmyexperience,and,onthat,toofferupopinionsonwhatisgoing
wellandwhatisnot.Nobodywouldbeinterested.Foranyonetowanttolookover
BestPractices,strongresearchandteased-outfactswouldhavetoformthebasis.I
am talking about direct research: carefully referenced data about best practices in
processimprovement.
Themainsourcesmustbetheoriginators.Theyincludeindividualswhohavede-
veloped and articulated the ideas, people such as W. Edwards Deming, Kaoru
Ishikawa, and Shigeo Shingo. But much of development of best practices comes
fromcompanies,notindividuals.Thus,thecompaniesthemselvesmustbeprimary
sources.Directresearchreliesmostlyonthesetwosources,andnotlofty,unsubstan-
tiatedclaims,theories,opinions,andassumptions.
Directresearchrunsintoobstacles,becausesomeofthemanufacturers,wholesa-
lers,distributors,andretailersthatthisbookstudieshavebecomecautiousaboutre-
vealingmuchofanything.Butforthe1,400publiclyheld,globalcompaniesinmy
mainresearchdatabase,publicrecordsareavailable,includingauditeddatarequired
byregulatoryagencies.I’vefoundalotinsuchrecords,andthebookispepperedwith
findingstherefrom.
Direct research includes going to present and former company executives and
managers,includingatleastafewinprivatelyheldcompanies.Comparingandcon-
trastingthesepeople’sspokenorprintedstatementsaboutwhatwentrightorwrong
overtimeprovidesfurtherenlightenment.
Asforthebook’scontent,itpresentsthingsaboutprocessimprovementthatyou
(yourcompany,yourbusinessunit)didn’tknow—orknowbutsimplydonotpractice,
oroncepracticedbutletgo.Ididn’tknowthesethingseither,untilallthatresearch
revealed unexpected tendencies and truths, and until probing unearthed reasons
why.Ididn’tknowuntilIdidandredidthemath,andaddedupthedata,theexpert
explanations,andthetrendlinestoexposethebiggerpicture.
Inthesummerof2006,thetitleofanewbookcaughtmyeye:HardFacts,Dan-
gerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Manage-
ment, by respected author Jeffrey Pfeffer and co-author Robert Sutton.1 Since I’ve
tried to underpin the message in Best Practices with hard data—lots of it—I
thoughtImightfindkinshipinthePfeffer/Suttonwork.
Big disappointment—right off the bat in a segment called ‘‘Casual Benchmark-
ing,’’ pages 6 through 8. The authors take United Airlines to task for trying to
compete in California by imitating Southwest Airlines, including ‘‘copying South-
west’slegendaryquickturnarounds.’’UnitedShuttlewasafailure,theysay,because
vii
viii Preface
‘‘Southwest’ssuccessisbasedonitscultureandmanagementphilosophy....’’Culture
maybe;butphilosophy?Ithoughtthebookwastobeaboutfactsandevidence.Citing
philosophyasthereasonforabusinessphenomenonisratherlikesayingitstemsfrom
alignmentoftheplanets.
Yes,Iknowitisnotuncommontofindthephilosophylabelattachedtomanage-
mentpractices.Intheearly1980s,theWestdiscoveredjust-in-timeandtotalquality
control,whichconsistedoflengthylistsofoperatingpractices.Consultantsandbook
authorsbecamesoenamoredofthepowerofthesepracticestoupliftsickmanufac-
turersthatbythemiddleofthatdecadesomestartedmakingthephilosophyassertion.
TheAPICSDictionarychiseledtheideanotinstonebutintoseveraleditionsofitself.
Noonehasbotheredtochangethedefinition,whichinthe2005editionbegins:‘‘Just-
in-Time(JIT)—Aphilosophyofmanufacturingbasedon....’’2
NoonecallsJITaphilosophyanymore.Thatwordhasre-attacheditselftoapre-
ferredterm,theToyotaproductionsystem(TPS).PfefferandSuttonfollowtheirdis-
cussion of United Airlines’ failurewith one about wrong-headed attempts by U.S.
automakerstocompete.Theautomakers’emulationofToyota’spracticeswasinade-
quate because ‘‘the secret to Toyota’s success is not a set of techniques but its
philosophy....’’3ThereisgoodstuffinthePfeffer/Suttonbook.Butmanagementphi-
losophyclaimsareapoorsubstituteforhardfacts.
BestPracticesdoesalotofranking.Itrank-orderstheregionsoftheworld,and
also the dominant industrial sectors, in long-term leanness, which you may think
cannotbedonereliably.Itcan.Verygooddataareavailableonthemostvisible,fun-
gible,andencompassingmeasureofleanness,namelyabsenceofinventory.Datago
backtensofyearsforhundredsofcompaniesinmanycountries,sothattherankings
detectnotjustwhohasbecomeleanlately,buttheelite—thosethathavesustained
improvementformanyyears.
Thebooknamesthecompanieswiththeworld’slongest,steepestratesofimprove-
mentinleanness,thenattemptstoexaminehowtheygotthatway.Theexpectation
wasthatalotofthemwouldhavediscoveredandexploitedsomewhatthesameset
ofbestpractices.Thatturnsouttohavebeenincorrect.Thedeepertheinvestigation,
thecleareritbecame:Therearemanywaystobecomelean.
Inthisbook,whenIsay‘‘lean’’ImeanLeanwithacapitalL.Ithastobeleanwith
totalquality.TheygotogetherlikeFredandGinger,orpencilandpaper,orrhythm
and blues. Lean won’t work without quality. Quality in turn runs into blind alleys
in an unlean, batch-and-queue environment. Poor quality produces scrap and
reworkandinjectsextraflow-timeloopstofixproblemsthatnevershouldhaveoc-
curredinthefirstplace.
As for terminology, lean is so well named that it has built-in endurance.4 Six
sigma, on the other hand, is likely before long to go up on the easel to be painted
over—with a new name and gussied up with new trappings. Even lean will get
renamedsoonerorlater.Whateverthenames,therewillalwaysbeflawsandfaults
needing to see the light of day and to be amended and corrected. A good deal of
thatisincludedinsomeofthechaptersherein.