2 Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques
The objective is to reduce the failure rate at the installation site of the product into
A cross-functional team consisting of the supplier engineering, manufacturing
personnel and engineering at the customer was put together. The faults reported at the
installation site (vehicle manufacturer) were recorded on a weekly basis. We could see
the symptom of the failures and where these failures were in the process these failures
From this weekly report we came to see some of the problems were due the vehicle
manufacturer’s material handling. We scheduled a review of the vehicle manufacturer’s
material handling processes with the supplier. We found a number of handling issues
that were easily corrected, one of which resulted in a packaging improvement, which
was also a cost reduction.
The fault frequency was reduced from 20,000 ppm down to approximately 2,500
ppm. Note that we went from approximately 3.6 sigma to 4.4 sigma—not Six Sigma
yet, but a decided improvement!
At the end of the exercise, the remaining signicant failure was around a Bourdon
tube air gauge. The air gauge was a pneumatic/mechanical device. Each instrument
cluster had at least two of these gauges, and 30% of the vehicle builds had three of
these gauges. The supplier of the gauges indicated the failure rate for one gauge was
500 ppm (approximately 4.8 sigma). This meant that the target for the entire cluster
of 500 ppm was not feasible since there were at least two of these air gauges in each
Eventually, the customer came to realize this deciency and moved from these
mechanical gauges to a more reliable transducer and analog signal to the instrument
cluster with stepper motor gauges.
IV. A Brief Overview of Value Engineering
V. Product Life Cycle
Any product or service will start with some kind of development process, which
may be a matter of days or a matter of years, depending on the complexity of the
product or service (see Figure 1.1). Once the product is launched, the product has
a metaphorical lifetime, terminated by retirement and a kind of product or service
“death.” If we are especially creative, we may be able to produce another product or
service that will have another discrete life cycle to continue our previous product or
service. Thus starting the process all over again.