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Lean Six Sigma and Supermarkets

In Lean Six Sigma the word Supermarket is used to describe a central location for a group of products often held in Kanbans that are collected by a customer.

The obvious analogy is a retail Supermarket that has a range of food, electrical or clothing products held in one large store so customers do not need to visit many different locations. A constant product flow is something you might get in the chemical industry where they use pipes.

Although we aim to make things flow, in most industries constant flow is not possible; we need supermarkets. Basically a supermarket is a store; parts in the supermarket are there because supply cannot be linked directly to demand.

Supermarkets are a group of centrally located Kanbans;

the central location is to allow ‘customers’ the time saving benefit of one stop shopping and supplier consolidation In Lean thinking, supermarkets are a necessary evil;

they should be located as close as possible to the customer(s) and not confused with a buffer stock that may be held within the production chain.

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Lean Six Sigma toolkit with KanBan?

Kanban Definition, very usefull Lean Tool

  • A communication system used to signal starting work on the work items in processes – Kanban is Japanese for card or signal

Concept

  • The Kanban signal contains the specific information required to authorise the commencement of work and comes from the next step in the process; without the signal, no work is started

This means that the customer pulls the item through the entire value chain

Nothing is supplied until it is needed by the next process step (JIT)

This means all the links in the value chain have to be very, very close

Examples of Kanban mechanisms

  • Cards, faxes
  • Bins
  • Defined Floor Location
  • Call Light
  • Electronic Signal (email, EDI, RF, Bar Code Reader)
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lean six sigma and Parallel Processing

To save Lead time (calendar time) we can, through Lean Six Sigma or Lean engineering the process steps that are currently being completed in series.

Another possibility is to take out some process steps from the series and do them in parallel to other process steps.

This is often called concurrent engineering; the idea being that you can design the different parts of a product at the same time. Unless concurrent or parallel processing is carefully planned and coordinated, it results in chaos.

Two things are required for Parallel processing:

  • The customer (or the business) would value the reduction in lead time
  • Only process steps which are independent of each other can be done in parallel
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Looking for new types of waste in Lean

As Lean concepts have been developed over the years some other wastes have been added to the original 7 (TIM WOOD).

  • The waste of Untapped Human Potential

This relates to intellectual capacity not just physical labour

 

  • The waste of Inappropriate Control Systems

This relates to minimising complexity (Push ERP/MRP/SAP vs Pull JIT and Kanban)

 

  • Wasted Energy and Water
  • Waste of Customer Time and Defecting Customers
  • Service and Office Wastes

 

  • The waste of Human Capacity

This relates to physical capacity during meetings, decision making

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Europe has a great economy. Why do we need to worry about productivity?

Europe’s economy has experienced seemingly high productivity over the past decades, due largely to the massive capital investments in various sectors. However, the real issue is Europe’s productivity growth rate (how quickly we’re improving our productivity).

Over the recent years, Europe’s productivity has been lower then China’s and India’s productivity growth rate. Europe doesn’t fare any better when compared to countries around the world. As an economy, we start to lag behind, but on the macroeconomic level, Europe’s prospects remain very rosy, but from a microeconomic perspective our performance is of serious concern.

Compared to other developed economies, Europe has weakening labour productivity growth and sliding real income growth. Concerns about weak productivity growth will only intensify as structural changes in the global economy shift the engines of economic growth to China, India, and Brazil.

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Why is Europe performing so poorly in productivity growth?

Various factors have contributed to our poor productivity growth:

  • slow or no adoption of new processes and technologies to enhance efficiency
  • underinvestment in machinery, equipment, and technology
  • lack of innovation to enable the creation of new products and technologies
  • lagging workplace re-organization and worker training

The EU, in close partnership with industry and other levels of governments, is working on a strategic three-pronged approach to address the productivity growth challenges faced by Europe:

  • education and awareness of productivity
  • productivity enhancement tools
  • policies to promote and enhance productivity and innovation
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So, what is the EU doing to address the productivity gaps?

The EU, in close partnership with industry and other levels of governments, is working on a strategic three-pronged approach to address the productivity growth challenges faced by the EU:

  • education and awareness of productivity
  • productivity enhancement tools
  • policies to promote and enhance productivity and innovation
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Lean Six Sigma , labour and productivity

What is the difference between labour and multifactor productivity?

Labour productivity is measured as real output per hour worked. Multifactor productivity, a broader measure of efficiency, is measured as real output per unit of combined inputs (capital, labour, etc). In essence, this is the efficiency of all or your factors of production.

Progress in productivity constitutes a significant source of increased standard of living. In the long run, increases in real hourly earnings are tied to productivity gains. The European economy has been able to produce more goods and services over time, not by requiring a proportional increase of resources such as labour, but by making production more efficient. The overall performance of any company, operating in any industry, is comprised of at least seven key criteria:

  • effectiveness
  • efficiency
  • innovation
  • productivity
  • profitability
  • quality
  • quality of work life
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