Team-based Variability Reduction: An Application of Statistical

Engineering

Susan O. Schall, SOS Consulting, LLC

Objectives

1. Show how to put data and basic problem-solving tools in the hands of the workforce to generate improved and sustainable results

2. Provide a practical example of statistical engineering.

Agenda• Statistical Engineering• Background• VR Roadmap & Tools• Elements• Examples• Lessons Learned• Benefits• More Information/Questions

Statistical Engineering

• Hoerl & Snee* define statistical engineering as “the study of how best to use statistical concepts, methods and tools and integrate them with information technology and other relevant sciences to generate improved results.

* Hoerl, R. W., Snee, R. D. (2010). Closing the Gap: Statistical Engineering Links Statistical Thinking, Methods, Tools. Quality Progress, 43(5): 52-53.

5 Aspects Underlying Statistical Engineering*

1. A system or strategy to guide the use of statistical tools is needed to effectively use the tools.

2. The impact of statistical thinking and methods can be increased by integrating several statistical tools, enabling practitioners to deal with highly complex issues that cannot be addressed with any one method.

3. Linking and sequencing the use of statistical tools speeds the learning of the approach, thereby increasing the impact of the method.

* Hoerl, R. W., Snee, R. D. (2010). Tried and True: Organizations Put Statistical Engineering to the Test. Quality Progress, 43(6): 58-60.

5 Aspects Underlying Statistical Engineering*

4. Embedding statistical thinking and tools into daily work institutionalizes their application.

5. Viewing statistical thinking and methods from an engineering context provides a clear focus on problem solving to the benefit of humankind.

* Hoerl, R. W., Snee, R. D. (2010). Tried and True: Organizations Put Statistical Engineering to the Test. Quality Progress, 43(6): 58-60.

What is Working in Your SE/Improvement Efforts?

Which Process Would You Rather Have?

Process A Process B

Target

Which Process Would You Rather Have?

Process A• Wide swings in process

performance– Not predictable– High costs for labor &

materials– Constant fire-fighting– Difficulty maintaining

improvements

Process B• Swings in process

performance narrowed:– Predictable– Lower costs for labor and

materials– More consistent process

output– Effective corrective action– Increased flexibility

Background• Printing company with 20+ facilities in

North America.• Began continuous improvement journey in

late 1990’s, including ISO 9000, workplace organization (5S), problem-solving, employee engagement and Six Sigma.– Efforts were originally decentralized and

dependent on local leadership.– Lack of standardization and stabilization

limited impact.

VR Methodology• Design team chartered to develop a

common, team-based variability reduction (VR) methodology October, 1999.

• Methodology defined as: A structured set of tools, metrics, processes, and practices to drive results in one or more parts of a business.

VR Intent• Squeeze the variability out of the process by

instituting a standard process, identifying and eliminating sources of variability within the team’s control, and establishing the daily disciplines necessary to sustain the improvements over time.

Desired Benefits of VR• Operations teams engaged in improving

and sustaining process performance.• Standardize and stabilize the process to

yield fast and efficient results. • Minimize capital expense and risk.• Lower the “noise” in the processes so more

complex methods of understanding sources of variation (such as Six Sigma) can be used to create breakthrough improvements.

VR Roadmap• Twelve week structured roadmap using

data-based problem solving to reduce variability in a primary process metric.

• Aligned with Six Sigma DMAIC.

Key VR Tools• Process

Understanding / Documentation– Process Map / Flow

Chart– Work Instructions– Visual Display– Workplace Organization

• Team / Stakeholder– Action Register– Scorecard

• Process Analysis– Value-added Analysis– Check Sheet– Basic Statistics– Pareto Chart– Fishbone Diagram– Histogram– Run Chart – Scatter Plot

Basic Statistical

Tools

What Other Elements Are Needed for Success?

Elements of VR Methodology• Linkage to business strategy• Roles & responsibilities• Performance tracking• Documentation• Training• Coaching/Audits• Recognition

Linkage to Business Strategy• Opportunities for VR were prioritized based

on savings potential, customer demand versus current capability, availability of resources, and other initiatives impacting the process.

• Led by CI Director for each business unit.

Who Needs to be Involved?

Roles & Responsibilities• VR Sponsor: Manufacturing VP

for business unit• VR Champion: Department

Manager• VR Team Leader: Process Supervisor• VR Team: Cross functional process

members• VR Analyst: Local Six Sigma Green Belt

Performance Tracking• Key Metric: Downtime or Cycle Time• Visual displays in the process created and updated

daily.

• Automated scorecards developed with assistance of IT to inform senior leadership of status.

VARIABILITY REDUCTIONProcess Name

!

Defects

283

90

12 8

0

50

100

150

200

250

300

XXX YYY ZZZ QQQ

Defect Type

Cou

nt

Delays

80

52

16

6

0

10

20

30

40

50

60

70

80

90

AAA BBB CCC DDD

Delay Reason

Dura

tion

1 2 3 ..................................31DAYS

Prim

ary

Met

ric

Reason

Note

Mean

+3 SD

-3 SD

Variation is the Enemy!

Process:Date:

VR Began: IndicatorVR Champion: Green

VR Lead: Yellow

VR GB: Red

VR Team Members:

Date Who What When Type Status

VR Action PlanStatus

Task In-Process or Needs Follow-up

Alert! Task Behind Schedule

Task Complete

Documentation• VR Implementation Guide

– VR Roadmap – Tools– Roles & Responsibilities– Audit Process– Certification– Examples

• Intranet site for sharing best practices and success stories.

Training• Champion Training

– ½ day focused on basics of VR and Champion role• VR Team Training

– 2 consecutive days focused on VR roadmap and tools– ½ day focused on team chartering and project

management • Provided by plant Certified VR Trainer.

• Audits integrated into the VR Roadmap at 4-week intervals.

• Used to assess team progress and provide firm, honest feedback to the team and champion.

• Used to coach team and champion on next steps.

• Conducted by a second party appointed by the CI Director of the business unit.

Coaching

Recognition• Team recognition at two levels:

–Silver Certification – Granted to teams that demonstrated effective application of VR at the completion of 12 weeks.

–Gold Certification – Granted to teams that demonstrated sustained improvement of at least 15% in their primary process metric for a minimum of 90 days.

Example: Bindery Line• VR initiated on bindery line in mid-2000.• VR Team created flowcharts of line startup and

operation, analyzed for non-value-added activities and different practices between shifts and individuals.

• VR Team agreed to standard process for startup and operation of the line; documented in work instructions and used to train all operators.

• Defined categories of downtime that negatively impacted line performance; incorporated into recently developed downtime reports and used to create a “delay Pareto.”

Example: Initial Bindery Line Delay Pareto

High Book Jam: VR Team Initial Focus

Missing Signature: Six Sigma Black Belt Project

Example: High Book Jam Root Cause AnalysisC&E DIAGRAM

Infeed High Book Jams

People

Machine

Measurement

Materials

Methods

Environment

Not Jogging Signature

Not Trained

Binder Pick-up

Book Size

Timing

LineSpeed

SignaturePlacement

Transfer Setting

SelectronicBinding

Packer set-up

Static

Humidity

Temperature

Dust

Supplied Inserts

Book Size

Curled Paper

Paper Weight

General MaintenanceTransfer Belts

Electrical Transfer TimingBinder Infeed Trough

Gather RacewayRaceway Joggers

LugsInfeed Pin

Feeders

Example: High Book Jam Root Cause Analysis

Effect Multi-vote Count % of Total

Infeed Trough 90 19.48

Not Jogging Signature 72 15.58

Infeed Pin 68 14.72

Transfer Setting 60 12.99

Curled Paper 56 12.12

Packer Set-up 48 10.39

Feeders 36 7.79

Book Size 32 6.93

The trough found to be defective due to design and wear. Stainless steel trough eliminated future wear

concern.

C&E MATRIX

Example: Bindery Line Missing Sig• VR Team worked with

Black Belt to identify critical input: vacuum drop at the sucker cup.

• New gauging methodology perfected to measure and control.

• Control methods for vacuum drop and other critical inputs were transferred to other lines and plants.

Example: Bindery Line Delay Pareto Results

Missing Sig: Two Missing Signatures within Top 10

High Book Jam: Moved From #1 Delay to #3, With Significant Reduction in Hours & Occurrences

Implementation Across the Organization

• Applied to over 600 process teams – Manufacturing– Customer Service– Finance– Logistics

• Variability reduced 2-15%. • Average performance improved 4-15%.

One Function’s Experience • 40% reduction in cycle time. • Error rates reduced 70-89%.• Rework reduced 25%.• Over $300,000 annual savings in reduced

spoilages.• New revenue: Process controls put in place

by VR Team enabled $700,000 of work for a new customer.

Lessons Learned• The structured roadmap and tool set

allowed most teams to successfully implement VR in 12-20 weeks.

• Although not originally developed for nonmanufacturing processes, VR was found to work in customer service, finance, and logistics.– Language and examples in the training

materials and Implementation Guide were modified to be more “user-friendly” for both audiences.

Lessons Learned• Process supervisors have not often had

training in teambuilding, conflict resolution or team dynamics necessary to lead such a team effort and require additional training and coaching.

• VR Trainers need the equivalent of Green Belt training to train and coach teams on the data-based tools.

• Teams need the discipline to perform root cause analysis versus jumping to solution.

Lessons Learned• Consistent audit protocols are needed to

ensure consistency from audit to audit, auditor to auditor. Audit checklists were developed and used to train auditors. Also, coaching skills.

• A compliance management system that provides mechanisms for document management & control and training & audit records frees the VR team from these types of administrative tasks.

Benefits of VR• Operations teams owned daily process

improvement and were more inclined to sustain the improvements over time.

• Capital expenditures for the improvements were minimal.

• Conformance to schedule improved with the reduction in variability. Customer Service was able to commit to new work within a specified time period with more confidence.

Benefits of VR• ISO 9001 activities were integrated into

daily work in VR processes.• Efficiency of Six Sigma resources

increased. • The elements of the methodology apply to

other improvement approaches (Six Sigma, 5S, quick changeover, ISO 9001, etc.).

• Over 4 years of implementation, observed 4-10% increase in sustained throughput of manufacturing assets.

How is this Different from Your Improvement Efforts?

How Might This be Applied in Your Workplace?

What Would be the Challenges?

More Information• Article on VR appeared in recent special

issue of Quality Engineering titled: Variability Reduction: A Statistical Engineering Approach to Engage Operations Teams in Process Improvement.

• Contact Susan Schall at: susan@soschall.com or 540-636-1418.

Questions?