Ask anybody who has been through a "lean transformation" or strategic implementation of some type and they certainly will share with you that one of the greatest challenges associated with real change comes in the form of behavioral change. We as humans have a tendency to revert back to our natural "ways" as we go through or experience change of any type. Change itself can be a scary term. The Merriam-Webster dictionary defines the term in two different forms:
of implementation and change it will drive mid-level managers, frontline supervisors and ground level employees to accept and be a part of the change too.
3. Set clearly laid out targets that can be measured. knowing where you are headed is one thing and establishing tollgates or checkpoints that are measurable is another. Change is best done little by little and all parties should understand how successful implementation is defined. At each successful stage of implementation communication can be shared with the organization and rewards and recognition given for outstanding effort. Rewards and recognition can help reinforce positive change and acknowledgement of success.
4. Train and prepare everyone. All employees should be a part of at least a basic educational training in Lean and Six Sigma.
5. Lean and Six Sigma implementation is not a blitz. Both strategies take time to develop as the behaviors and culture of the organization align. You will need to ensure that implementation has enough time for the new tools, methodologies, principles, behavior and culture to firmly take root. This can range from a year to five years. You will be much better off with a sustainable strategy in place than a few clean areas. Sufficient time can be helpful for employees who do not yet understand that lean is a long-term strategy and their support is needed for the "long-haul."
While these five tips will help in managing the changes that naturally come with Lean and Six Sigma initiatives it is also important to be aware and prepare for resistance. Like a book pages sometimes need to be turned and paragraphs edited, it is best to have a plan in place prior to implementation that will help you manage forms of resistance. Taking these steps will help you ensure that when it comes time to publish your story, it's a success.
Almost every organization in the world knows by now that the 5S system is an efficient, low maintenance and high impact means of driving continuous improvement. The system itself can be used in offices, shop floors and software systems. So why is it that many who have tried this powerful tool only yield small returns or feel as though something is hiding?
1. Missed sorting or tagging of items - "We'll use it someday." If you have heard that phrase before chances are you didn't capture all the benefits of your 5S initiative. Be sure that if an item has been collecting dust for over 30 days and an agreement can't be reached the item is tagged and addressed in a 5S auction.
2. Unsure what to look for - Another very common reason why the 5S feels like a cleaning event that yields minimal returns, is that people are not exactly sure what to look for or where to look. Here is a fun little list of some things to look for in your 5S event:
3. 5S removes waste and cleans - There are no two ways about it; some people will say spring cleaning and other people will say waste removal. Can't we all just get along? It does both. Move a tool that is used everyday from one side of the shop to the point of use and your transportation is minimized. Shine a machine up and discover not leaks, breaks or malfunctions; well, you've got a sanitary area that invites the spirit. Whether you're removing waste or shining for inspection, hygiene or sustainment both are beneficial so why not do both?
There are many ways to squeeze hidden waste out of an area with the 5S system. The more events you conduct and are a part of the more hidden waste and "top secret" items will become visible. What are some unique things that you have found during a 5S event?
The last slide clicked, with jitters in his arms the young man set his clicker down. He knew something had gone desperately wrong. A loud voice soon called out " Okay, So what's the return?" For a moment the freshly trained black belt sank back into his suit. After a deep breath he replied "we have a faster process and everyone on the floor is much happier."
Whether you celebrate Thanksgiving or you're just getting ready for a hearty dinner, planning for the big meal can be quite the task especially if you have lot's of guests to provide for. Hours of cooking, ordering and booking travel plans. It's no wonder turkey makes you tired. Allow us if you will to share 5 principles that will keep you lean this thanksgiving.
1. Define Value from the customer's perspective.
The truth is not everyone likes turkey. So going out and grabbing a turkey just because it's tradition may not be of value to guests or family. A frequent voice of the customer survey to friends and family can be helpful throughout the year. Of course your family may wonder why you're pinging them 6 months prior to the holidays to find out what they want to eat. So if you're not comfortable with sending a voice of the customer survey set-up a simple phone call and gather suggestions for the big meal. Preparation ahead of time can help you avoid excessive amounts of Overproduction on products that nobody wants to eat.
2. Map the Value Stream
Once you have the actual demand from friends and family it's time to start preparing for execution. No, not of the Turkey... we mean the big day. You want to make sure that everyone is able to enjoy the day together. One way of doing this is map out your cooking process. You can use the years of past as the standard and identify opportunities where you may be able to improve. Here are a few tips for mapping dinner out.
Making your process visible will allow you to see Muda or Nonvalue added activities in the process that you may not have known were there.
3. Make Value Flow through the Elimination of Waste.
With the major bottlenecks now identified we can start to figure out how we get that turkey in the oven. Or ham, or lasagna, or food. The bottom line is if your looking to make value flow the quickest way is to remove waste from the process. Keep in mind that waste is viewed from three different perspectives which are: Muda, Muri and Mura, all three of these origins of waste should be evaluated and removed in order to make value flow in the most effective way. Since we've already identified the major bottlenecks in our thanksgiving feast we can now move on to discovering why those bottlenecks exist. You guessed it we're going to search for the root cause of each of the pain points in the process. Once you have discovered the root cause of the major bottlenecks then you can begin to plan solutions that will get food cooked fast and easy with a smile on everyone's face.
4. Respond Only to the Pull of the Customer.
You have your bottlenecks removed and a plan in place for the big day. Now that's something to be grateful for. But what happens when you get the wild idea to bake mom's famous sasquatch and turkey bacon pie? Don't do it! Not just because nobody will like it, but in part because nobody ordered it. If the "customers" don't want it, don't introduce waste into your improved holidays. Only respond to the pull of the customer.
5. Pursuit Perfection
No matter how many Turkeys, pigs, cows or lambs we cook there will always be room for improvement. The most important thing to remember about any improvement is to take some time after to celebrate, laugh, smile and reflect on the improvements that have been made. Once you have all shared in the joy of a wonderful dinner then it's time to begin looking for the next improvement to make.
From us to each and everyone of you we would like to say thank you. For whatever capacity, course, mailing list, experience, memory or consulting project you have been a part of each and everyone of you are special in your own way and for that we are grateful.
- Until next time friends, keep on improving and we will keep on giving "you," solutions that ignite your power!
When it comes to understanding a process, few tools are as powerful as the SIPOC map. The SIPOC can be used in both process mapping and value stream mapping. When used as part of a value stream initiative the map shows material and information flow in forward and backwards loops, this allows teams to identify potential gaps from a systemic view which helps us understand the effects of activities both upstream and downstream. Today we will look at the SIPOC map from a process mapping perspective.
What does SIPOC mean?
The tools name SIPOC is rather catchy. Each of the letters provide us with insight as to portions of a process we should review when mapping from a high level. SIPOC map keep in mind that the suppliers provide the inputs to the process. The process which is what you are trying to improve should in some way provide value or transformation to the inputs which results in an output that needs to at minimum meet your customer's expectations.
When do we use a SIPOC Map?
The SIPOC diagram is most often used to identify opportunities for improvements before a project begins. Because the tool shows us all relevant aspects of a process it can also be useful when a team needs to:
What does a SIPOC Map look like?
How do I use a SIPOC Map?
One of the added benefits of a SIPOC diagram is how easy they are to create. Follow these simple steps and you will be able to create a SIPOC map:
1. Find an area as close to the process you are mapping as possible so that you can see the process happening and engage with people at the gemba.
2. Start by mapping the process out. You should map no less than 4 steps and no more than 7 high level steps.
3. Next identify the process outputs.
4. Now identify customers (internal/external) that will receive the outputs.
5. After you have identified customers, document the inputs of the process. These are the X's that are transformed into outputs or Y's by the process.
6. Lastly Identify any suppliers of the inputs.
7. If at all possible identify requirements that might be known already. If you are following the DMAIC method these CTQ's will be verified in the measure phase.
After using a SIPOC map we can now see all the elements of the process clearly.
1. There was an inquiry for a bike repair which resulted in a scheduled appointment date and time.
2. Next the owner came with his bicycle ready for a diagnosis which resulted in a recommendation and an estimate to the bike owner.
3. The bike rep. then received permission for the order and prepared his purchase order for the bike mechanic.
4. The parts were then ordered by the manager which was the internal approval for the bike rep.
5. The vendor then delivered the parts which was the approval for the bike mechanic to perform the repairs and ultimately resulted in the customer being called.
6. Then through observation the bike was repaired.
If you would like to download a free SIPOC template simply click on the link below.
One of the most effective tools any process orientated employee can use is the process map. The process map has been around since the dawn of time and has evolved into many different iterations in order to meet users needs. Along with the flexibility of a process map it's quite effective at showing a user where pain points in a process might be.
What is a process map?
Process mapping refers to a tool used to make business processes visual. The process map documents an entire process step by step which allows us to see relationships between inputs and outputs of a process along with clear identification of decision points and many other steps in the process series. The process map is generally used towards the beginning of initiatives in order to understand the flow of a process but it can also be used in support of almost every phase of improvement projects.
Different Types of process maps:
Traditionally there are many different types of process maps that have been developed and used. For example a SIPOC and a value stream map are forms of process maps but generally provide a much deeper level of understanding as they identify information flows too. In general there are three different categories of process maps:
Why do we process map?
In general process maps provide us with a visual display of the sequence of steps within a process. They can also be used as a method of communication. We have all been a part of a project that goes around and around in circles trying to remember and figure out what actually happens in a process. When we make those steps visible the process is communicated to everyone in a more understandable language. There may be times where you need to add in steps here and there but with the map visual and near the area where the process actually occurs, the communication of the process is much more accurately defined. Another very common reason for process mapping is that a visual map can aid us in the analysis of a business process. Some of the ways we can use process maps to analyze are:
How do we build a process map?
Process mapping is a fairly simple process to learn. But there are a few general rules to follow when you build a process map.
Different Tools for Building your Map:
Process maps can be built with stickie notes and butcher paper, excel, powerpoint, word or in vizio. Over the years I have grown to love stickies and butcher paper because it is much less restrictive and can be built anywhere. For our purposes today though we will use excel to build our process map. Today we will cover three types of process maps: The top down flow chart, the linear flow chart and the swimlane or cross functional flow chart. If you haven't downloaded a template yet, you can do so by clicking here.
The first thing you will want to look over is the first tab of the template. Excel makes it very simple to choose your symbols by simply clicking on the insert tab and selecting shapes. At the bottom of the shapes you will notice symbols for building a flowchart. You can try to memorize them right away but there is also a reminder of the symbols meaning in the first tab.
The great thing about a top down chart is that we can still drill into each of the process steps below it. 2. We then can ask the subject matter expert, "what do you have to do to get the ingredients out?" The person baking the cake might say:
The next type of map you will find in your template is known as a linear flowchart. The linear flowchart is a diagram that displays the sequence of work steps that make up a process. It will show decision points, rework loops and a few other elements. Let's make a linear flow chart for our cake.
The final flow chart we will look at is the swimlane flowchart. These types of flowcharts are often referred to as deployment flowcharts too. The swimlane flowchart is used to distinguish what job function of the organization is performing what steps. They can be used to show back and forth activities between steps and unlevel workflows.
As you can tell in the swimlane diagram above we can see very clearly who is responsible for what process step. If there were overlapping steps we would see those stacked which may be a trigger that there is an opportunity for improvement.
What should process maps have?
Like any other map a process map has a few unspoken rules we should do our best to adhere to. First and foremost be sure to label the process name and the team somewhere on the map just in case there are any questions. You may also want to place a date on the map of when it was created. Next the process map should be very simple to read, it needs to go in one direction not up and down and side to side. Try to keep a flow that is either left to right or top to bottom. You will also need to identify start points and end point and keep all of your loops closed. Did I include all these unspoken rules?
Helpful things to look for in a map.
We mentioned a few items to look for in our process maps but let's summarize them here now that you are an expert.
Selecting a project in Lean Six Sigma can sometimes be a daunting task. But like any other project it is a necessary step that you will have to take at some point. One very important piece of this early decision comes in the form of a document called a project charter. The project charter is a very important piece of the puzzle that we have written about before in a post titled The Project Charter. The project charter is one of the first essential steps in many different types of projects. It acts as an informal contract between the organization and the team. The charter will set a clear outlook on what the team's objective is and how their success factors will be measured. Additionally it contains historical evidence for the project, a clearly defined problem statement, a goal statement, the boundaries associated with the project, team members, measurements and an estimation of the time needed to complete the project's implementation all on one sheet of paper.
Where does the charter come from?
In general a project charter will normally take one of two roads of development. The first is that a charter is developed by leadership or the top level management of the organization and then is presented to the team. The other very common way a charter can develop is through the team's discovery of opportunities or issues that might need to be solved or improved. The team then pieces together a project charter and presents their findings to upper management. No matter how the project charter is developed, consensus and buy in from upper management and the team is absolutely critical to the project's success. This agreement of the project's direction will show the rest of the organization that both the team and upper management approve and endorse the project moving forward and will provide the team with the support and empowerment they will eventually need.
What is included in a project charter?
Basic identifiers - The charter should always begin by defining basic elements such as the company name and the project title. Like a contract this identifies who the contract is between and a general title to keep projects organized.
Business Case (historical reasoning) - Next the charter should include a clearly written one or two sentence business case. This simple two sentence business case will define "why" the team has been formed and how the project aligns with the organization's strategic direction. In other words the charter will show how the project aligns with the vision and the mission of the company.
Problem Statement - After the business case is clearly defined the charter will very clearly tell us what the issue or opportunity is that the team is going to focus on. This is called the problem statement.
Goal Statement - The next important element is the goal statement. The goal statement lays out the objectives that the team is expected to achieve. These expectations or the goal statement should always be agreed upon by both the team and the team champion. A very important piece of the goal statement is to be sure that when it is written out, it is done in such a way that makes the statement measurable.
Scope - The project charter will also include the boundaries or the scope of the project. These boundaries make it clear what is acceptable and what is out of the project scope. It is very important that the boundaries are clearly defined in the scope. This part of the charter is what will empower and hold the team accountable for their actions. The scope will give team members the freedom and support they need to focus their energy on the important tasks at hand.
Measurements - As noted earlier the goal statement should be worded in such a way that makes the objective measurable. Those measurements or Key performance Indicators are placed on the charter so that the team can identify baselines of where they are starting from, where they are headed and eventually actuals that can be used for reflection or as a means to see how near or far the team landed in relation to their target.
Team Roles - Another important designation that is contained within the project charter are the roles of each of the team members. This simply lays out who's on the team, who the champion is and who the sponsors are along with any other members that might apply to the project.
Milestones (schedule) - Last but not least the charter will include a high level project schedule or a gantt chart.
All of the information outlined above is normally documented on one piece of paper, with each category being very clearly defined, concise, accurate and to the point as possible. It's quite a bit of information I know, so let's list some of the advantages related to documenting all this project information.
Example and walkthrough
If you haven't downloaded the charter template yet you will need to do so now. You can click right here to get your template. Now that you have your template let's get started.
STEP 1 - As we noted earlier on the first thing we will need to document is the basic identifiers. Let's say our company name is Bob's machine house, I know original right? Next we will input our project title. Our title will be Accounting Cycle Time Reduction.
STEP 2 - Now we are ready to identify our business case or the historical reasoning for the project. This is a short summary of our strategic direction and reasons for the project. In general your short summary should include either quality, cost or scheduling issues or opportunities. Most of the time the business case will be directly related to either:
Step 3 - After our business case is documented we are ready to define our problem statement. This statement should be as detailed as possible. The problem statement should provide insight in the following ways:
One thing to keep in mind as you define your problem statement is that it should not be leading in any way. Make sure the statement is neutral and does not pass preconceived judgements or diagnosis.
Example - Problem Statement
Our cash to cash cycle at the accounting process has not been meeting the standard of 30 days. As a result of this our funds are invested in inventory 50% longer than we expect. It is crucial that we improve this because we are not getting a return on our investments quick enough.
With a neutral statement like this, the team has no preconceived notions, allowing them to work towards the project objectives with an open mind.
STEP 4 - Our next step is to gain consensus on a goal statement. As a general rule of thumb goal statements are generally in the realm of 50% improvement or reduction depending on the goal. We will again use the standard goal statement format in the template. The statement might sound like this: The Goal is to reduce the cash to cash cycle time by 50% resulting in a reduced, cash to cash cycle of 15 days.
STEP 5 - Once everyone including the project champion have agreed on the goal statement we then need to define our project boundaries or the scope of the project. There are two boundaries you will need to clarify here. The first is the longitudinal scope which tells us where the process starts and where the process ends. One example of our cash to cash cycle time might be:
Start - When materials are acquired and End - When we receive payment.
The other boundary we need to define in our scope is the lateral scope. This refers to the "width" of the process. One example of the lateral scope for our cash to cash cycle time might be:
The cash to cash cycle time for our accounting project only applies to the accounting and purchasing department but no other department is applicable in the entire organization.
After combining the two boundaries our scope tells us that we need to be empowered from the point materials are acquired to the point where we receive payment only within accounting and purchasing. One thing to note with scope is that you may want to include more specific level of authority than just lateral and longitudinal.
Step 6 - Next we need to define our measurements. There are at minimum three measurements you should establish and track. A baseline, A future state and the actual results after the project is complete. Since our goal statement and problem statement already defined the metrics we need, we just need to input them into our template in the measurement section. The one that I will use is the number of days for the cash to cash cycle time, you may want to use others too though. Since we know our standard of 30 days is being exceeded by 50% as defined in the problem statement, we can input a baseline of 45 days (30 days + 50% of 30) in the current state. Our future state measure was defined in our goal statement. So we can input 30 days (45 days baseline - 15 days improvement) in the future state which tells us we need to improve by 15 days. The actuals will be measured when the project is complete. Remember since you more than likely will have more than 1 measurement to input those too.
Step 7 - Your team roles should be somewhat self explanatory, just be sure to input your sponsor, coach or champion and each of the team members in the template.
Step 8 - Last but not least we need to establish a schedule for our project. This schedule defines the amount of time you think you will need from the start of the project to the complete and full implementation. The template includes a scheduling tab that you can enter in the stages you want to measure. The dates will automatically populate back to your charter, but let's look at one example just to be clear. If I were using the DMAIC method I would want to make my start and complete dates visible for the Define, Measure, Analyze, Improve and Control Phase. If you are using another methodology simply plan the high level steps of that methodology the same as we did with the DMAIC example.
Now you have all the necessary information on your project charter to move forward with your improvement. Be sure to remember though that the charter should be revisited every day of the event to adjust and monitor the charter. Even if you don't feel like doing it, just do it. There will be times where new people join the project and it will save you a lot of time and energy if you can hand them an up to date Project Charter to catch them up to speed.
Nobody can say it better than the master himself Mr. Taiichi Ohno. Learning to see waste is the first critical step along your personal journey, but sooner or later seeing waste will not be enough. Once you have learned to see waste the next step is moving towards "elimination."
We were excited to see that many of you took advantage of our November Sale for the Lean Six Sigma White Belt and 5S Course. While continued training is one way of developing your skills another important element that goes hand and hand with continued education is "experience." While it's not always easy to go and do a Kaizen Blitz in our home we can identify forms of waste in our everyday life.
Let's take for example " The missing kiss." Every morning before I head out into the world my children, wife and I gather around a board near our front door. We take a few moments to catch up on things we've been doing and find ways to support each other in accomplishing our goals. Along with our brief huddle every morning I stumble off right when the huddle breaks and grab my shoes for the day. About 50% of the time this results in me not getting a big hug from my daughters and a kiss from my beautiful wife. Why? I've built waste into my morning routine. Transportation, moving from the door to my bedroom on the other side of the house, Over Processing, going from one side back to the other and back again and of course unused skills and talents by not taking advantage of my families brilliant mind for solutions. So how does lean apply to this "everyday" situation? Well, if you are anything like me you love spending time with your family.
One day while working on a project at my desk a thought came to my mind. I pulled out an old design layout I had in my drawer of the home and upon further review realized that jackets, shoes and backpacks could be placed in a closet near the door. We began by conducting a 5S of the closet together. Upon completion there was more than enough room for our shoes. While the story might sound silly it gets sillier, don't worry. Not a moment later my little seven year old STEM cell winner decided to chart the flow of the morning routine.
Folks I want you to know that it has been well over a month now and every morning I get a hug and a kiss before we all head out, how? By eliminating waste. So what's the point?
While it might not be a hug and a kiss in the morning for all of us, it could be walking across the hall to pick up a sheet of paper you printed, maybe it's sifting through the closet to find supplies you need or excessive waiting when you really don't have the time. The point is, waste is everywhere and all around, by first learning to see and then learning to act you will find that not only will your job or career advance as you eliminate waste but you may just find that there was much more time, resources and energy to do the things you love.
Remember there are always FREE wonderful resources available on The Lean Six Sigma Glossary and in our blog Listen to the Gemba so please take advantage.
Let's keep transforming the world through the "complete and total elimination of waste" and continue sharing with one another. If you happened to come across some waste in your day today, don't forget to share your story in the comments section. Have a fantastic day everyone and until next time, keep on improving and we will keep on giving you solutions that ignite your power!
A few months back I received a phone call from an old friend. After we had finished catching up for a bit he began describing to me how he had his employees calculate the yield of his pizza's. each day the employees would mark how much came out and how much was put in. The employee would then divide the out number by the in number giving him the yield percentage. Sound familiar? The method that was being used to calculate yield is known as traditional yield calculation. Out of curiosity I asked him, "what is your yield percentage?" He then shared with me that his yield for each day was always right about 96%. So what was the issue? 96% production rate is not the best, but it's not the worst either. That's when he mentioned that things didn't seem to add up.
So where do we start? Let's look at the process right! First I asked him to give me a run through of the process that was being used to make the pizza's. As it turns out he had two separate processes, one for popular orders and one for unique orders. We will look at the "popular order" process here.
What is First Time Yield?
The first time yield, first pass yield or throughput yield is a metric used to determine how a process is performing in relation to the number of good units or services it produces. In other words it tells us the number of good units to the total number of units excluding wasteful activities like rework and scrap on units that can not be fixed. In the case of our pizza we actually have a 90% first time yield not 96% as the traditional calculation showed us.
How is it Calculated?
6% change in a measurement is quite significant. Can you imagine if that change was in car parts, airplane parts or computers and not pizza's? The way we calculate first time yield, throughput yield or first pass yield is simple by dividing the number of GOOD UNITS (excluding any rework or scrap) by the THE TOTAL NUMBER OF UNITS GOING THROUGH THE PROCESS. If you are interested in a template the bottom of the page will give you a free download.
Why use First Time Yield?
So why do we use first time yield instead of traditional or final yield? The most obvious reason is that using final or traditional yield methods keeps the "hidden factory" hidden. The final yield only divides the number of acceptable pieces by the number original number, or what comes out in comparison to what went in. Looking back on our pizza's we can understand now that the yield was not really 96%, in other words using the traditional yield calculation hides wasteful activities like rework, lost time and many other forms of waste. However when a metric like first time yield is used we take into consideration only process steps that yield good parts or services and exclude rework (first pass). This gives us greater insight as to what is actually going on in the process. Using metrics such as first time yield also helps combat the famous, it's just the way we always do it behaviors by exposing rework and other wasteful activities so that they do not get built into future processes.
In the case of my friend he was losing 6% on every 100 pizza's which could turn out to be a significant opportunity to improve his process and gain additional resource time in the near future. Ultimately first time through yield is a significant step in the right direction, however most processes are linked together in order to create a systematic way of accomplishing tasks along the way. When there is a string of processes involved FTY is not the ideal way to measure. These cases like we will see in our "unique order" pizza's are better suited using a rolled throughput yield. So stay tuned as we calculate the complex unique orders of our pizza process using rolled throughput. Don't forget to download your free template by clicking on the link below.
When looking to calculate metrics for a process one of the best performance metrics that you can use in relation to yield is Rolled throughput yield. Rolled throughput yield is the probability that a process with multiple steps will produce a defect free unit or service. RTY is often referred to as "True throughput yield" because it quantifies the cumulative effects of inefficiencies that often plague processes and drive hidden costs. Like we mentioned in our previous post entitled: First time Yield (FTY) most processes are linked together in a series so that tasks can be accomplished easily. As you can see in the flowchart shown for my friends unique pizza orders there is a series of interlinked processes.
In the first string of processes we pull ingredients, then assemble the pizza, next cook the pizza then ship to the customer. For processes that are more systematic like the one shown here, we use a measurement called rolled throughput yield.
What is Rolled Throughput Yield?
Rolled throughput yield is a percent that measures the probability that a unit can "roll through" a process without defects. This measure takes into account rework and scrap providing an organization with a more accurate assessment of internal waste and the cumulative effects of poor quality.
Why use RTY?
Traditionally yield calculations take place at the final step of a process. The thought is that rolled throughput yield measures the effectiveness of the overall process. Here is an example, Let's say we were evaluating my friends unique order pizza's. In our batch of pizza's we had 50 to start with, and out of those first 50 our first process step provided a yield of 78%. Our second process steps yield was 98% and our third was 93%. Finally we are ready to ship to the customer which gave us a throughput yield of 90% in our 4'th process step. When we calculate our RTY we see that the probability of a unit passing through the entire process defect free is 64%.
Now had we used a more traditional method of calculating our yield we would have a final yield percentage of 90%. While the numbers certainly look great, they are not accurate. The reality is that using the wrong yield measurement will hide inefficiencies by placing a mask over the waste in the process. These "hidden wastes" are often referred to as the "hidden factory." Rework and scrap both eat up time, resources and capital. The worst part about it is that you're left wondering why do I have 90% yield but my efficiency is terrible? The first way to begin dealing with these hidden factory measurements is to make them visible. Using Rolled throughput yield makes these hidden factory metrics much more visible and takes into account rework that might be performed at each process step. It will also expose the cumulative effects that poor quality has on a unit's probability of being produced defect free.
How to use RTY
Assuming our same pizza baker had measured his yield with the rolled throughput yield, we then would be able to quantify the cumulative effects of inefficiencies found in our pizza making process. This is done by figuring the FTY for each process step and multiplying the numbers. Let's give it a try. You can download the excel sheet here and follow along. Today our worker is required to bake 100 pizza's.
1. So in process step 1 we input or pull ingredients for 100 pizza's. The output again yields only 90 pizza's good giving us 10 "scrapped" or in our case that can not be made and 5 needing rework.
2. Now we have 90 pizza's going into process number two. However, when we look at the output we see there is again 10 scrapped and 7 needing rework.
3. By the third process step we input all 80 remaining pizza's. Our output shows us that 5 more pizza's will need to be scrapped and only 3 can be reworked.
At this point our rolled throughput yield is 62%, which is much different than the 90% yield we would have seen had we used the traditional yield method.
4. In our final process step of delivery we send off or "input" of 75 pizza's but 5 need to be scrapped and 10 can be reworked.
So why did we end up with 95% yield on our traditional calculation and 50% on our rolled throughput yield? Looking back on my friends pizza shop we can see that much of the factory was hidden. Probably not because anyone intentionally hid the amount of scrap and rework going on but simply because calculating yield alone only takes into consideration what goes in and what comes out. That would mean that if 100 pizza's went into the process and 100 came out you would have 100% yield. But what if 40 pizza's needed rework, is it still 100% yield? Hopefully not. Using RTY exposes those wasteful activities. The other benefit to using a rolled throughput measure vs. a first time yield measure is that first time yield measures what goes into a process step against the number of good parts produced, but it does not provide a cumulative view of the effects on an entire process series.
When it was all said and done at the pizza shop many opportunities were discovered simply by changing the way yield was measured. At the end of the day our improvement opportunities are only as good as the measures we use, but no measure will ever be as good as a "true measure."