RELIABILITY PAPER
Implementation of a Six Sigma
project in a 3M division of Brazil
Ricardo Pires de Souza, He´lio Roberto He´kis,
Lucas Ambro´sio Bezerra Oliveira, Jamerson Viegas Queiroz and
Fernanda Cristina Barbosa Pereira Queiroz
Department of Production Engineering,
Universidade Federal do Rio Grande do Norte – UFRN, Natal, Brazil, and
Ricardo Alexsandro de Medeiros Valentim
Department of Biomedical Engineering,
Universidade Federal do Rio Grande do Norte – UFRN, Natal, Brazil
Abstract
Purpose – The Six Sigma project aims at a continual reduction in process variation, eliminating defects or flaws in products and services, optimizing processes and reducing costs. The purpose of this study is to demonstrate improvements in customer service index (CSI), product cycle time and inventory turnover after implementation of a Six Sigma project.
Design/methodology/approach – This research focused on the value stream mapping of a company process, performed by a multidisciplinary team that implemented a pull production system, the standard operational procedure in machines that were process bottlenecks, and the kanban system.
Findings – After three months of implementation, the authors observed an 11.7 percent reduction in product cycle time, increase in customer service index (CSI) from 93.9 to 97 percent and increase in inventory turnovers from 4.9 to 9.
Originality/value – The project was in accordance with the competitive strategy of the company, which is focused on customer satisfaction and cost reduction.
Keywords Six Sigma, Customer service index (CSI), Value stream map, Kanban, Brazil Paper type Case study
1. Introduction
After commercial barriers were lowered, competition among companies became more intense, forcing them to seek new forms of competitiveness to survive. Consumers began to demand higher product and service quality at lower prices (Pinto et al., 2006) and the customer’s opinion became the reference of quality. Programs such as Six Sigma have provided competitive advantages to companies, since they have positive impacts on sales and cost reduction (Van Der Wiele et al., 2010).
Exploring, describing and explaining the problem are important for successful projects. Pepper and Spedding (2010) assert that:
[. . .] aligning the cultural aspects of Lean with the data driven investigations of Six Sigma holds huge potential in a bid for a genuine and sustainable approach to organizational change and process improvement.
The current issue and full text archive of this journal is available at www.emeraldinsight.com/0265-671X.htm
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Received 22 February 2011 Revised 31 January 2012 Accepted 3 February 2012International Journal of Quality & Reliability Management Vol. 30 No. 2, 2013 pp. 129-141 q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656711311293553
Thus, this study was developed by a multidisciplinary team in order to draw a value stream map of a company’s process and implement improvement action plans contained in Six Sigma methodology. The opinion and experience of several staff members, from the operational to the management level, are the basis for the project’s success, since changes are more acceptable at operational levels.
Intense competition has forced many companies to implement the pull production system to meet demand, eliminate waste and reduce inventory. The philosophy of the pull production system is to manufacture only what the client really needs, using kanban as the primary tool in the visual management process. All of these tools and processes seek to improve the productive process in order to make production more flexible, reduce inventory and costs and satisfy the customer.
The research problem to be evaluated consists of determining the reasons for the poor customer service index (CSI) in a company division, despite high finished product inventory levels. It is hypothesized here that this is a result of the lack of knowledge regarding the process as a whole and non-standardization.
The article is divided into six sections. This introductory section is followed by Section 2, a theoretical summary of the subjects discussed. Section 3 presents methodological aspects, while Sections 4 and 5 show a case study in a division of 3M Brazil and the results obtained, respectively. Finally, Section 6 gives conclusions, limitations and suggestions for future studies.
2. Research background
In the early 1980s, a number of factors contributed to the implementation of techniques and tools aimed at improving quality, reducing costs and increasing customer satisfaction in American organizations and throughout the world. The introduction of mass production and globalization allowed the Japanese to market their products, especially electronics, worldwide. Consumer acceptance was immediate, owing to lower costs and higher quality compared to their Western counterparts. During the entire 1980s and early 1990s, Motorola was one of the many organizations in the USA and Europe that was being overtaken by the competitiveness of Japanese organizations, demonstrating to top management that the quality of their products was severely compromised (Bairra˜o, 2010).
The North American electronics industry was therefore experiencing intense competition from Japanese products. For this reason, these companies sought to improve the quality of their products in order to remain competitive in the market (Harry and Schroeder, 2000). In 1987 Motorola, Inc. developed a new methodology called Six Sigma. Sigma is the Greek letter “d” and this methodology is widely used in statistics to measure standard deviation, variability and process inconsistency (Pande et al., 2000). Considered a reformulation of principles, practices and quality management tools (Clifford, 2001), Six Sigma assumes that the process is subject to small variations and the goal is 3.4 defective parts per million opportunities (Montgomery, 2001). To achieve this goal, significant efforts are needed, since the implementation of this methodology requires financial and human resources, in addition to the use of advanced statistical tools.
On a production line using Six Sigma 99.99966 percent of the manufactured parts should be good (Linderman et al., 2003), while in a three sigma process 66,810 defective parts per million are produced, meaning that 93.3 percent of the manufactured parts are good.
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Figure 1 shows the relationship between defect rate and the Sigma process, assuming normal distribution.
All processes can be operated at the Six Sigma level, but the suitable level will depend on the cost-benefit strategy adopted by the company. If the process is at Two or Three Sigma, it is relatively easy to reach level four, but achieving Five or Six Sigma requires considerable financial resources and sophisticated statistical tools. The recent resumption of investments aimed at improving processes is an important strategy that will determine the process level the company will be striving for achieve (Linderman et al., 2003). For several years, this methodology was limited in the literature to guide books (Harry and Schroeder, 2000) and a small number of academic articles (Schroeder et al., 2008). Recently, academic articles have been published in respected periodicals, such as the Journal of Operations Management and International Journal of Quality & Reliability Management, using a scientific approach to demonstrate a number of Six Sigma contributions to companies (Calia et al., 2009). Despite originating in the electronics industry, in the last two decades this methodology has been implemented in several industrial sectors as well as in services. The primary applications of Six Sigma in organizations in the 2000s and the main benefits and difficulties in its application can be seen in Tjahjono et al. (2010).
A widely accepted definition in the literature was put forth by Schroeder et al. (2008), who defined Six Sigma as a parallel-meso structure to reduce variation in organizational processes by using improvement specialists, a structured method, and performance metrics with the aim of achieving strategic objectives, as shown in Figure 2. Figure 2 shows that the team of specialists responsible for implementing Six Sigma projects (Champion, Black Belt, Green Belt) are autonomous within the organizational hierarchy and for this reason do not encounter many institutional barriers in the departments.
Six Sigma technology was innovative compared to the traditional total quality program, since it integrated statistical methods to achieve higher production gains (Schroeder et al., 2005). The application of Six Sigma uses various improvement
Figure 1. Relationship between defect rate and Sigma process
Source: Linderman et al. (2003)
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methods and problem solutions. The main methods used are define, measure, analyze, improve and control (DMAIC) and DFSS.
DMAIC is the most widely used method in companies aiming at process improvement (Pande et al., 2000; Ban˜uelas and Antony, 2003; Lynch et al., 2003; Antony et al., 2005), as well as the most cited in publications (Brady and Allen, 2006). This occurs because the method is very simple and similar to the PDCA cycle, which is amply used in a continuous improvement process (Satolo et al., 2009).
DMAIC stages were well defined by Satolo et al. (2009):
. Define. The clear definition and objective of the project, including technical
requisites, which must be identified in Six Sigma projects that will be developed to meet customer expectations of quality, price and delivery time. According to Behara et al. (1995), the ability of the organization to meet this expectation is closely linked to process variation (refers to any type of administrative or transactional process, such as services, sales and manufacturing).
. Measure. Identifying key measures of efficiency and efficacy in transporting such
measures to the Six Sigma concept. According to Edgeman et al. (1999), to ensure the expected results in this phase, practices such as Six Sigma metrics; measurement systems analysis (MSA); failure mode and effect analysis (FMEA); and quality function deployment (QFD), among others, are used.
. Analyze. Determining the causes of the problems that need to be rectified.
According to Eckes (2001), the following practices are used in this stage: data visualization; hypothesis tests; correlation and regression analysis and analysis of variance.
. Improve. Is the sum of activities related to generation, selection
and implementation of solutions. This stage involves developing design of experiments (DOE), in order to obtain thorough knowledge of each process, using structural changes in the operational levels of several factors, simultaneously to the process under study (Barney, 2002; Lynch et al., 2003). The information obtained with DOE helps to identify the adjustment required to modify and optimize processes.
Figure 2. Parallel structure of Six Sigma
Source: Schroeder et al. (2008)
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. Control. Is the action of ensuring that improvements are sustained over time.
Young (2001) reports that the following practices are adopted in this phase: control cards; process planning charts; reliability testing and process error proofing. The DFSS method – design for Six Sigma – is most used in the process of developing new products and innovation (Watson and Deyong, 2010).
The main organizations with a history of quality management that adopted the Six Sigma methodology reported significant transformations in productive performance (Mcclenahen, 2004) encouraging the management of corporate knowledge and enhanced competitiveness (Wu and Lin, 2009). After implementation of Six Sigma in the dental division of 3M in the USA, the company improved business performance (Fiedler, 2004). Other organizations, such as Ford, Honeywell and American Express, also adopted Six Sigma to enhance business performance (Hahn et al., 2000).
Six Sigma is currently grouped into three generations. The first generation (1987-1994) focused on reducing defects, as achieved by Motorola, the second (1994-2000) on reducing costs and was implemented in companies such as General Electric and Du Pont and the third (2000 to the present) concentrates on creating value for the customer and the company, as shown by Samsung (Aghili, 2009; Antony, 2007). For an overall view of the process, Six Sigma projects use value stream mapping (VSM). Rother and Shook (2003) define VSM as a collection of all the actions, with or without added value, necessary to produce a product or group of products that use the same resources through primary streams, starting with raw materials and ending with the customer.
VSM is different from conventional techniques, since it gathers information at each stage of the process, such as cycle time, tool changeover time, inventory, parts in process, information flow, materials flow and finished product inventory (Singh et al., 2010). With the representation of materials flow, this technique helps visualize the entire productive process.
While several authors have developed tools to perfect individual operations within a supply chain, most of these fail to visualize and link materials and information flows from the entire supply chain of the company (Abdulmalek and Rajgopal, 2007). VSM overcomes this deficiency and is aimed at mapping the processes and links between them, which are designed in a large image, facilitating decisions for perfecting product value stream.
Another very useful piece of information obtained with VSM is product cycle time, that is, the time needed to manufacture a product, including all the processes required to make it available for sale.
The activity mapping process involves a number of stages, such as preliminary process analysis, a detailed record of all the required items, number of persons involved, distance traveled and process time (Hines and Rich, 1997). VSM is one of the most important elements for evaluating a particular process, allowing teams to discuss and implement flow modifications in order to reduce costs.
Another important element for process evaluation process is the standard operating procedure (SOP). SOP is a process document that describes in detail how the operator should perform the designated task (De Treville et al., 2005). Almeida and Souza (2000) consider SOP to be one of the first elements for effective and organized production that is free of loss. They underscore that balancing the process and defining minimum inventory level are also goals of this procedure.
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Colenghi (1997) corroborates other authors by stating that SOP is a detailed description of all the operations needed to perform an activity. It has significant weight within any process aimed at ensuring, by standardization, the expected results for each task. The procedures manual for developing an operation is the most widely used in companies and normally leads to the creation of an organizational flowchart. The components of a standardized operation are takt time, standard operating routine and standard amount of in-process inventory.
Standard operating routine is a set of operations performed by operators in a determinate sequence, allowing them to repeat the cycle consistently over time. Standard operating routine prevents each operator from randomly performing the steps of a particular process, reducing cycle time fluctuations and allowing each routine to be executed within takt time, in order to meet demand.
To meet demand, eliminate waste and reduce inventories, companies started to adopt the pull production system, with the aim of producing only what the customer needs. In the pull production model, the way in which materials flow gains considerable importance. Process stages only produce if there is customer consumption, and the definition of each part as well as when and how much to manufacture is given by the amount of inventory in stock. Each process “pulls” the parts of the previous process, eliminating the need for programming each stage of the process with an material requirements planning (MRP) system. The need for production depends on inventory levels (Almeida and Souza, 2000). Kanban is widely used to help in the visual management of a pull production system. The term kanban means “billboard” in Japanese (Le´xico_Lean, 2003). Its function is to make pull production viable, using customer-supplier signaling with respect to what, when and how much will be produced. According to Chan (2001), kanban dimensioning is a critical factor for a better customer service and strategic for regulating stocks.
Figure 3 shows the direction of kanban and material flow. According to Almeida and Souza (2000), when demand effectively occurs, kanban cards are transmitted to each stage of production. Thus, production only initiates through these cards. 3. Methods and techniques of the present study
The present study used explicative, exploratory and descriptive research in a case study conducted in a division of 3M Brazil. Initially, an exploratory study was needed to provide more familiarity with the problem faced by the company. This is reflected in the low CSI and low inventory turnover. After understanding the problem, a value stream map of the process was made to record, describe and analyze the facts. Armed with the data described and analyzed, the multidisciplinary team identified
Figure 3.
Card and material flow in the pull production system
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determining factors for the occurrence of the problem and improvements were implemented in the process by means of a Six Sigma project.
4. Case study: 3M Brazil
3M was founded in Minnesota in 1902 and in 1910 the company moved to Saint Paul, the capital of the state. Several years were required for the company to achieve the quality desired for its products and its raw material supply line. In 1946, 3M Brazil was established in the city of Campinas in the state of Sa˜o Paulo under the company name Durex, Lixas e Fitas Adesivas Ltda. Durex adhesive tape became a common substance, which is still on the market. With the need to expand, the company opened a plant in 1975 in the city of Ribeira˜o Preto, also in the state of Sa˜o Paulo, where the present study was conducted.
In order to make their technologies and solutions available for national industry, 3M Brazil opened the first Customer Technical Center (CTC) in Latin America in 2005, consisting of 17 technical laboratories, reinforcing its commitment to continued innovation to satisfy its customers.
In 2009, 3M operated in 65 countries, with global sales of 23 billion dollars and 75,000 employees. In Brazil, 3M generated gross revenues of 2.03 billion dollars and employed 3,262 workers. Some of the values of the company stand out, such as customer relations, evidenced by the following policy: act with inflexible honesty and integrity in everything and meet customer needs with innovative technologies and superior quality, value and service.
3M invests in technology to offer more innovative solutions to meet market needs. Over the years, 3M Brazil has been working to improve people’s lives through its solutions, maintaining a strong relationship with the community in which it operates. Seeking a strategy of competitiveness and customer focus, the company adopted and standardized Six Sigma methodology as a way of providing its customers with greater quality and innovation.
The first step in implementing the process under study was to determine the problem, which was the low CSI and low inventory turnover of finished products in a division of the company. The following step was to form a multidisciplinary team, which was the basis for the success of the project. After the problem was defined and the team set up, a value stream map of the current state of the process was drawn. After elaborating VSM, the team analyzed improvements in the process, including the standard performance of the roll cutter (Dusenbery), in order to obtain productivity goals, elaborate the standard hour concept to define kanban boards and calculate the standard deviation for kanban implementation.
The major difficulty faced during implementation was employee training, since they had no prior knowledge of the kanban board or standard work. This training was done over a two-month period, with particular attention paid to materials management. After training, workers were able work without interference from materials management, thereby improving customer satisfaction levels.
5. Discussion
Initial results showed that the CSI of the sector was 93.9 percent in the first six months of 2008 and that finished product inventory turnover (inv turns) was 4.9, as shown in Figures 4 and 5. These data exemplify a very unfavorable scenario, given that some customers were dissatisfied with late product delivery, even with high stock levels.
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Measures started to be implemented in mid-June 2008 and concluded two months later. First, a multidisciplinary team was set up, with participants directly involved in the process, from production managers to machine operators. A current state value stream map was drawn for the structured team and it was found that, despite high stock levels, the desired product was often not available in time.
The current state value stream map (Figure 6) showed that materials management placed production orders at all stages of the process and that production cycle time (lead time) was 60 days.
However, the future value stream map (Figure 7) was improved so that materials management no longer placed orders at two production levels, justifying the implementation of intermediate supermarkets. These two levels (Calender and Maker) were supplied directly by standard cards from production. The absence of materials management at two production levels reduced production cycle time, since the process
Figure 4. CSI monitoring
Figure 5.
Monitoring of finished product inventory turnover (inv turns)
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Figure 6. Value stream map before project implementation Ma terials Mana g ement MRP 640 daily daily monthly MRP monthly w eekly MAKER CUTTER SHIPPING 62 CALEND AR w eekly w eekly 30 ton
C/T = ? C/O = 25 min Shifts = 3
C/T = 22 m
2/min
C/O = 15 min Shifts = 3
C/O = Chang eo ver Time C/T = Cy c le Time C/G = Commercial Gr a phics 23 da ys 22 da ys 7 da ys daily F amily CG
DEMAND = 2,496 rolls/month TAKT TIME = 3.06 sec/min
2 order s F orecast 2.7 sec 1.09 sec ? 5 C/T = 56 m 2/min C/O = Shifts = 3 25 min 8 da ys 60 da ys Lead Time 416,000 m 2 401,536 m 2 124479 m 2 153,751 m 2 FL C MR PV C R esin spreadsheet MRP CURRENT ST A TE VSM CG I II I
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Figure 7.
Value stream map after project implementation daily daily daily super mar ket super mar ket super mar ket monthly MRP monthly MRP MAKER CUTTER SHIPPING 62 CALEND AR w eekly 30 ton C/T = C/O = Shifts = 3 C/T = C/O = Shifts = 3 Ma terials Mana gement C/T = C/O = Shifts = 3 C/O = Chang eo ver Time C/T = Cy c le Time C/G = Commercial Gr a phics 23 da ys 10 da ys 10 da ys F amily CG
DEMAND = 2,496 rolls/month TAKT TIME = 3.06 sec/m
2 order s F orecast PPPC 5 10 da ys 53 da ys Lead Time 416,000 m 2 FL C PV C R esin supplier FUTURE ST A TE VSM . CG I
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became more autonomous. Thus, the execution of the current project decreased production cycle time from 60 to 53 days, that is, an 11.7 percent increase in production capacity.
In addition to reducing production time, the project was able to gradually increase the CSI, reaching 97 percent in November 2008 and to maintain finished product inventory turnover at 9. Thus, mean time in which products remained in stock dropped from 2.4 to 1.3 months.
The project also developed effective SOPs. Company employees were trained and all shifts adopted SOP, avoiding waste, production fluctuations and operational errors. 6. Final considerations
The Six Sigma program, which considers several projects, is producing excellent results for 3M Brazil, as evidenced by this study. Company values are aligned with the program, that is, provide customer satisfaction and reduce costs by improving processes and reducing production time.
The study hypothesis was shown to be true, since the team did not have sufficient knowledge of the process. The value stream map drawn provided the team with thorough knowledge of the process and the implementation of SOPs allowed standardization of operator activities, improving production index measuring accuracy and reducing production fluctuations.
Considering the specific aims of the present article, it was found that production cycle time decreased by 11.7 percent, CSI increased from 93.9 to 97 percent and inventory turnover from 4.9 to 9 turnovers, three months after project implementation. The general aim of the study was achieved, given that the increase in inventory turnover and decrease in product cycle time are effective gains resulting from the Six Sigma project, since they reduced production costs.
The low CSI of the division was due to the managers’ lack of knowledge regarding the process and the non-standardization of activities, since production did not reach constant levels, owing to losses and redos.
This investigation also showed that forming a multidisciplinary team is essential to a successful Six Sigma project. The team elaborated and implemented standard cutting machine (Dusenbery) performance, the cornerstone for implementing the kanban board. Improvements in service quality resulted in customer satisfaction, which in turn increased trust in the company.
The present study will also serve as a base for future research in other divisions of 3M Brazil in addition to other companies.
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