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“Lean Six Sigma and Quality Indicators of Productivity”
Table of Contents
The purpose of this assessment is to understand the background, history and emergence of lean six sigma in business field and the way it is used as a tool to promote productivity. This assessment also focuses on quality indicators of the business and discusses the way different businesses uses lean as an approach to add value to the customer satisfaction and its relation with quality indicators.
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The Toyota as an organisation has been taken as an example and the key points are categorized in different parts below and discussed further. The Toyota is the global car manufacturing company with its headquarters in japan. Toyota is known for its excellent manufacturing style by the means of using tools of lean six sigma.
This assessment is categorized in various parts which are show below in sequence:
Lean means reduction of the waste whereas six sigma means 3.4 defective parts per million. The union of lean and six sigma helps to get customer satisfaction by providing quality product (as shown in fig 1.1 below)
Figure 1.1 (Walters, 2013)
The first thing usually people think when the word lean comes is ‘Toyota’, however history of lean dates back to 1940 when it was first introduced in Venice. Henry Ford was the first person who introduced the lean concept in the manufacturing system. Eli Whitney, the American investor known for the invention of cotton gin invented the concept of interchangeable parts in the year 1799. (Mirsky, 2004)
Henry Ford (1913), in order to achieve work standardization, put forward in front of others the flow of production by interchanging different parts. However, the Ford concept was really good but the limitation was there was not much variety and there was one specification for its application.
In the year 1930, Toyota adopted the Ford’s flow of production concept and hence, invented Toyota Production System. The main focus of the Toyota production system is to meet the changing customer needs and these needs can be accommodated by cost reduction in production process and increasing the quality of products. (Hessing, 2015)
Some of the steps adopted by the Toyota System were to take into account the self-regulating function of the machine to enhance the quality of the manufactured product, sorting the machines in the order of the processes. Rapid steps were developed to enable the manufacturing of multiple components in a relatively small volume and maintain strong communication of component requirements between process steps.
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The name behind the success of Toyota Production System is Sakichi Toyoda and coined Jikoda concept. Jikoda focuses on the reasons of problems that is affecting the production work flow and helps in improving the quality of the production process by mitigating the causes of defects. Jikoda means, “Automation with Human Intelligence:” (Henshall, 2018)
In the year 1937 Kiichiro Toyota, son of the Sakichi Toyota in the year 1937 developed the concept of “Just in Time” in manufacturing process. He had a great research by continuously visiting Ford plant and had a good understanding of the processes involved over there and implemented those processes in Toyota Production System. This new system aimed at getting the products just right in time so as to stop the inventory overflow and improved the quality by introducing mistake proofing concept. (Hessing, 2015)
Taichi Ohno integrated the Just in Time with Jikoda System and practiced Deming method to incorporate quality at each step of production that benefitted the customers. The Kaizen principle and Just in Time concept together was brought into existence by Ohno as an architect of Toyota production Systems. Ohno also discovered the Kanban System which gives green flag to the customers that the armamentarium is available to be moved to the next sequential process and is followed in the company as a part of pull system. The pull system means the sequential flow of materials in between the production process according to the needs of the customers and related well to Just In Time concept. (Hessing, 2015)
There are 3M’s of Lean manufacturing process which is shown below in Figure1.2
The Muda, Mura, Muri are well related to each other. Many organizations are using these three tools to enhance productivity entitled through the lean way. (Do, 2017)
There are two methodologies for six sigma. One is for existing procedures which is DMAIC (Define, Measure, Analyse, Improve & Control) and other is used for new processes DMADV (Define, Measure, Analyse, Design and Verify) (Harris, 2013)
The usefulness of Six Sigma is :-
Customer loyalty is determined by retention of customers by the business which can happen only if the customer is satisfied.
Applying lean six sigma within the business reduces the risk of business having unhappy customers because it helps in reducing the defects and wastage which adds to the value of the product. The quality products leads to customer satisfaction and hence add customer’s retention to the business which shows their loyalty.
The lean approach which the minimises the wastage and reduces the cost involved in the production of finished product. The six sigma approach aims at production of goods with not more than 3.4 defect per million parts produced. The lean & six sigma principle together minimises the wastage and defects involved in the production cycle, hence staff is designated to the key areas of production to determine the factors that leads to the long cycle time. Once the problem is determined, solution oriented approach is used to mitigate the problem and shorten the product cycles. This approach helps the organisations to limit the long cycles and reduction in the time of the cycles by 35 percent.
The worker are allocated the tasks, are told to set the SMART goals and implement lean six sigma principles to these goals to achieve the results. This helps the employees to set up an action plan and see how many obstacle needs to be overcome. Then they find solutions to fulfil the requirements of the problems which are time specific and hence, managed accordingly.
The lean six sigma approach can help organisations to develop a strategy to find solution to reduce the waste and minimise defects that can add value to the product and hence customer satisfaction can be achieved. (Findlay, 2014)
The quality indicators are defined as tools to measure or indicate the quality of the product received according to the set standards. The quality indicators in Toyota manufacturing system helps top determine the quality of products made and value added by these products to the company.
The few of the quality indicators are:-
Process Cycle Time which means total time taken to complete the product from the first stage of the process to the last stage. (isixsigma, 2018)
Process lead time or PLT : In the figure 1.1 below the process lead time can be defined as the time taken from the start of the process till the completion of that process
Figure 1.3 (Asprova Corporation, 2018)
Changeover time is the time taken to interchange the machine parts during the manufacturing process.
Deliveries on Time– DOT is the another key quality indicator. Deliveries that happens in timely manner adds to the good customer satisfaction and add values to the business.
Another quality indicator is the Net Promoter Score. The consistent customer feedback helps to determine the success of the business. This is ideal for every business to have, if the companies won’t follow this concept of feedback many of customers might not come back if they are not happy with the service or if they don’t have platform to address the issue or simply they will change and find other company. The detractors in NPS help the businesses and provides them with an opportunity to improve to land up to customer expectations. In figure1.4 below shows positive NPS scores for Toyota systems which shows they have many happy customers.
Figure1.4 (Goodfellow, 2012)
The Toyota adopted SMED method to improve the production flow. The SMED concept which means single minute exchange of Dies. Quick die changes (Single Minute Exchange of Dies) aims at improving the flow (Mura) of production. The concept is based on the premise that the tools and changeovers should take less than one minute (single digit) at the maximum. During 1950s and 1960s, the company suffered from the presence of bottlenecks at the car body molding presses. The root cause was identified, to be the high changeover times that increased the lot size of the production process and drives up the production cost. Toyota implemented the SMED by placing the precision measurement devices for the transfer of heavy weight dies on large transfer stamping machines used to produce the body of the vehicles and reduced the changeover and process cycle time.
Toyota used Poke-yoke system used for zero quality control. Poke-yoke is a Japanese term which means mistake proofing. Toyota used mistake proofing devices at each steps of the processes involved which acted as a good tool to reduce errors and helped to achieve great quality products in less time. This devices affected one of the quality indicators which is the process lead time which showed decrease in the time of manufacturing product because it gave opportunity to workers to correct the defect the time they arise using poke-yoke devices.
In the year 2012 Toyota received high number of detractors in terms of their NPS score. The Toyota recalled 6.5m calls to fix the problems for their customers and set an example in achieving high NPS score as shown in figure 1.4 above using six sigma approach. The problem in steering wheels and seats was identified. Toyota recalled all the cars and involved the management to analyse the defects involved in the particular part of the process and rectified it using PDCA tool. (Rankin, 2014)
The quality indicator tools helped the company to minimise the defects and wastage which in turn reduced the cycle time and added to the increased productivity. Using the poke-yoke measurement devices increased the efficiency of the workers which helped them to find the defects whereas without these devices finding the defects manually would have considered time consuming process as workers have to evaluate each step involved in the production process. The less changeover time, less process cycle time, less lead time shows the increased productivity in the business.
Lean six sigma has an interesting history, background and emergence story as discussed above as part of this assessment with its relation to Toyota system. The benefits of lean six sigma discussed above shows the way tools of lean six sigma helps to improve business productivity. Also, quality indicators of Toyota manufacturing unit are well described above as a part of the script. Furthermore, also discussed well how Toyotas lean six sigma tools applies in relation to these quality indicators and how these tools helps in continuous improvement.
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