6 sigma


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Process Improvement shared by Ahsan Saleem. Email massfrompak@gmail.com

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  • Customer Centered : The focus is on meeting customer wants and needs Systematic: The integrated Six Sigma tools are applied routinely, repeatedly and in harmony They are more powerful than being used alone Data Driven: The decision making process is based on facts and data Doing Things Better: leads to satisfied customers, workers, and shareholders
  • GE Estimates that the Gap between 3 or 4 Sigma and 6 Sigma was costing them between $8 to $12 Billion/Yr
  • Overtime, Mgt skepticism was apparent.
  • 6 sigma

    1. 1. $ix $igma Remarkable Results and Rave Reviews Is it really more fun than a Root Canal?
    2. 2. Agenda <ul><li> and 6  </li></ul><ul><li>Some 6  History </li></ul><ul><li>Normal Distribution, Specification Limits, Control Limits, and the 6  Methodology </li></ul><ul><li>How good is 99% accuracy? - 6  vs. 3  </li></ul><ul><li>What are the 6  benefits? Why is it attractive? </li></ul><ul><li>The DMAIC model </li></ul><ul><li>Some 6  tools </li></ul><ul><li>TQM failures and 6  successes </li></ul>
    3. 3. <ul><li>Sigma (  ) is a Greek letter used to measure the variability or the spread in a process </li></ul><ul><li>In business,  is a metric that measures how well a processes is performing and how often a defect is likely to occur </li></ul><ul><li>The higher the Sigma value, the lower the variation and fewer the defects </li></ul><ul><li>Traditionally, companies accepted 3 or 4 sigma performance levels as the norm </li></ul><ul><li>Six Sigma effectively utilizes some proven quality tools, principles and techniques </li></ul><ul><li>The 6  tools are applied within a simple model known as DMAIC ( D efine- M easure- A nalyze- I mprove- C ontrol ) </li></ul> and 6  !
    4. 4. So, What is Six Sigma? <ul><li>Six Sigma is a business system for achieving and sustaining success through Customer Focus, Process Management, Process Improvement, and the wise use of Facts and Data </li></ul><ul><li>It can be used for any activity that is concerned with cost, quality, and timeliness. It can be used from production, to human resources, to order entry, to technical support </li></ul><ul><li>Unlike previous quality improvement efforts, Six Sigma is designed to provide tangible business results and cost savings that are directly tied to the bottom line </li></ul>
    5. 5. Customer Centered Focus is on customer wants and needs The 6  integrated tools are applied routinely, repeatedly and in harmony Decisions are based on data and facts Better for the customers, workers and shareholders Data Driven <ul><li>Systematic </li></ul><ul><li>Approach </li></ul>Six Sigma is a Method For Doing Things Better
    6. 6. Some Six Sigma History <ul><li>Roots of Six Sigma can be traced back to the 17th century when Gauss introduced the normal curve </li></ul><ul><li>In the 1920's, Shewhart showed that 3  from the mean is the point where a process requires correction </li></ul><ul><li>In the 1970s, a Japanese firm took over a Motorola factory in the US (Quasar TV) and achieved a 95% reduction in defects while using the same workforce, technology, and designs </li></ul>
    7. 7. Some Six Sigma History (continued) <ul><li>In the mid 1980s, Motorola decided to take quality seriously and developed the Six-Sigma standard / methodology </li></ul><ul><li>In 1988, Motorola won the Malcolm Baldrige Award, became a worldwide quality and profit leader, and reported Billions of savings as a result of using Six-Sigma </li></ul><ul><li>Soon, other major US and world companies adapted the new standard and reported huge successes. Among them Allied Signal, GE, and Honeywell. </li></ul>
    8. 8. Cost of Poor Quality (% of Revenues) versus  Level GE: $8 - $12 Billion/Yr 25% 15% 10% 5% 2%
    9. 15. Product Specifications vs. Process Outcome <ul><li>Control Limits </li></ul><ul><li>Specifications </li></ul>LSL USL Nominal Average LCL UCL
    10. 16. Motorola’s Assumption the Process Mean Can Shift by as Much as 1.5 Standard Deviations Chapter 4: Six Sigma for Process and Quality Improvement
    11. 17. Six Sigma Long Term Shift & Drift LSL USL 1.5  1.5  Nominal Average Average
    12. 18. <ul><li>“ Short Term Goal = Long Term Goal + Appropriate Compensation Factor for Environmental Changes” </li></ul><ul><li>What is the 1.5 Sigma Shift? How is it applied? </li></ul><ul><li>Keeping the above equation in mind, consider the following </li></ul><ul><li>In terms of project management statistics, 2 defects per billion opportunities in a project correspond to six sigma and 3.4 defects per million opportunities corresponds to 4.5 sigma. </li></ul><ul><li>The overall goal is a near-zero defect process, or a 4.5 Sigma Level for the process in the long term. </li></ul><ul><li>The environmental changes and the magnitude of this change is 1.5 Sigma  (Calculated empirically by Motorola as the Long Term Dynamic Mean Variation) </li></ul><ul><li>Thus the Short Term Sigma Level (6) = Long Term Sigma Level (4.5) + Compensation Factor (1.5 Sigma Shift) </li></ul><ul><li>i.e. a Short Term goal of a 6 Sigma Level translates to 3.4 defects per million opportunities (4.5 Sigma Level) over the Long Term . </li></ul><ul><li>This is illustrated in the figure below. </li></ul><ul><li>                  </li></ul><ul><li>The red area indicates the process without any shift in the mean. </li></ul><ul><li>The green area indicates the shift of 1.5 in the process mean. </li></ul><ul><li>Thus the short term sigma level aimed at is 6, in order to achieve a </li></ul><ul><li>3.4 PPM process corresponding to a 4.5 sigma level over a long term. </li></ul>
    13. 19. What Is Six Sigma and the 1.5 shift? The Original Concepts And Theories To quote a Motorola hand out from about 1987 ... 'The performance of a product is determined by how much margin exists between the design requirement of its characteristics (and those of its parts/steps), and the actual value of those characteristics. These characteristics are produced by processes in the factory, and at the suppliers. Each process attempts to reproduce its characteristics identically from unit to unit, but within each process some variation occurs. For more processes, such as those which use real time feedback to control outcome, the  variation  is quite small, and for others it may be quite large. A variation of the process is measured in  Std. Dev, (Sigma)  from the  Mean . The normal variation, defined as process width, is +/-3 Sigma about the mean. Approximately 2700 parts per million parts/steps will fall outside the normal variation of +/- 3 Sigma. ( see chart #2 ) This, by itself, does not appear disconcerting. However, when we build a product containing 1200 parts/steps, we can expect 3.24 defects per unit (1200 x .0027), on average. This would result in a rolled  yield  of less than 4%, which means fewer than 4 units out of every 100 would go through the entire manufacturing process without a defect.   ( see chart #3 )Thus, we can see that for a product to be built virtually defect-free, it must be designed to accept characteristics which are significantly more than +/- 3 sigma away from the mean. It can be shown that a design which can accept  TWICE THE NORMAL VARIATION  of the process, or +/- 6 sigma, can be expected to have no more than 3.4 parts per million defective for each characteristic, even if the process mean were to shift by as much as +/- 1.5 sigma ( see chart #2 ) In the same case of a product containing 1200 parts/steps, we would now expect only only 0.0041 defects per unit (1200 x 0.0000034). This would mean that 996 units out of 1000 would go through the entire manufacturing process without a defect. To quantify this, Capability Index (Cp) is used; where: A design specification width of +/- 6 Sigma and a process width of +/- 3 Sigma yields a Cp of 12/6 = 2. However, as shown in ( see chart #4 ), the process mean can shift. When the process mean is shifted with respect to design mean, the Capability Index is adjusted with a factor k, and becomes Cpk. Cpk = Cp(1-k), where: K factor= Process Shift Design Specification Width The k factor for a +/- 6 Sigma design with a 1.5 Sigma process shift ... 1.5/6 = 0.25 and the Cpk = 2(1- 0.25)=1.5 Cp= Design specification Width Process Width
    14. 20. Six Sigma is not a panacea: Motorola popularized the benefits of having six standard deviations between the process' nominal and each specification limit. If the process remains centered on the nominal, it has a Cpk (process capability index) of 2.0. This means a one part per billion nonconformance rate in each tail (above the upper specification and below the lower specification). Motorola allowed for a 1.5-sigma process shift-- which any decent statistical process control chart should detect very quickly, by the way-- which would make Cpk 1.5, and the nonconformance rate 3.4 ppm. Again, there is nothing wrong with this, but there is nothing new about it either. Walter Shewhart and his contemporaries identified the issue of process capability decades ago, and Henry Ford was seeking ever-more-precise manufacturing equipment during the 1910s and 1920s! Ford, in fact, had to hire Carl Johannson (of the famous Jo blocks, or gage blocks) to get the precision measurement systems necessary to support his operation. During the 1920s, Ford boasted of owning Jo blocks with 1-microinch (25.4 nanometer) steps; these dimensions now come to mind in microelectronics manufacturing. In summary, &quot;Variation is the enemy&quot; (we've known that for decades). Design for manufacture (DFM) includes consideration of the variation from the tools that will actually have to make the product. &quot;Design for Six Sigma&quot; is basically DFM, which also was a cornerstone of Henry Ford's manufacturing methods. A Six Sigma process with a 1.5 sigma shift in the process mean. Cpk=1.5 and the nonconformance rate is 3.4 parts per million.                                          Six Sigma process capability with the process centered on its nominal (100). Cpk=2.0 and the nonconformance rate is 2 parts per billion.
    15. 21. <ul><li>LSL </li></ul>6  vs. 3  Centered 3  Process, 66,372 defects of 1 million opportunities Shifted 6  Process, 3.4 defects of 1 million opportunities LSL USL Nominal Mean Mean Mean
    16. 22. Simplified  Conversion Table: <ul><li> DPMO * </li></ul><ul><li>6 3.4 </li></ul><ul><li>5 320 </li></ul><ul><li>4 6,210 </li></ul><ul><li>3 66,800 </li></ul><ul><li>2 308,000 </li></ul><ul><li>1 690,000 </li></ul><ul><li>* D efect P er M illion O pportunity </li></ul>
    17. 23. The DMAIC Model The Problem Project Scope The Customer Metrics Current Process map Deliverables Process KIV Process KOV Collect Data Feed to SPC Variation Key Metrics GR&R (Validation) Process Capability Yield Sigma Level Pareto Charts Multilevel Pareto Root Cause Control Charts Fishbone D. FMEA Process Maps Major Obstacles Needed Resources Multi-Vari Optimization DOE PM Train Operators Visual Aids Gauges & Fixtures Control Plans Monitoring Standardization Documentation Audits & Reports Prevention Mistake Proof Sustain the Gain Process Input: x Output: Y=f (x) Define Improve Measure Analyze Control
    18. 24. Benefits of Using $ix $igma Productivity Improvements Culture Change Customer Retention Product/Service Development Cycle Time Reduction Market-Share Growth Cost Reduction DMAIC
    19. 25. What makes it Attractive? Tool to Plan & Deliver Values To Customers Sets a Performance Goal for Everyone Accelerates the Rate Of Improvement Measurable Results Tied to the Bottom-line Promotes Learning & Cross-Pollination Executes Strategic Change Generates Sustained Results $ix $igma
    20. 26. Is It Easy to Implement? <ul><li>Done right, Six-Sigma is a lot of work </li></ul><ul><li>It has its own risks, and takes an investment in: </li></ul><ul><ul><ul><li>Time, </li></ul></ul></ul><ul><ul><ul><li>Energy, and </li></ul></ul></ul><ul><ul><ul><li>Money </li></ul></ul></ul><ul><li>Implementing 6  , company wide, could be a challenge </li></ul><ul><li>However, Six-Sigma improvements are usually thrilling and rewarding </li></ul>
    21. 27. Some Six Sigma Tools 6  Voice of the Customer Process Design/Re-design Process Management Creative Thinking SPC DOE
    22. 28. Six Sigma and other Continuous Improvement Initiatives <ul><li>Quick Strike </li></ul><ul><li>1-6 day </li></ul><ul><li>Process mapping </li></ul><ul><li>Cause & Effect </li></ul><ul><li>Other basic tools </li></ul>Kaizen <ul><li>One piece flow </li></ul><ul><li>Cells </li></ul><ul><li>Visual controls </li></ul><ul><li>Pull system </li></ul><ul><li>Kanban </li></ul><ul><li>TPM </li></ul>Lean <ul><li>DMAIC </li></ul><ul><li>Statistical tools </li></ul><ul><li>FMEA </li></ul><ul><li>Cp and Cpk </li></ul><ul><li>GR&R </li></ul><ul><li>ANOVA & DOE </li></ul>Six Sigma <ul><li>Quick fixes </li></ul><ul><li>Simple solutions </li></ul><ul><li>Containment </li></ul><ul><li>Cycle time </li></ul><ul><li>Waste </li></ul><ul><li>Inventory </li></ul><ul><li>Standardization </li></ul><ul><li>Variance </li></ul><ul><li>Complex problems </li></ul><ul><li>Defect prevention </li></ul><ul><li>Stability </li></ul><ul><li>Process capability </li></ul><ul><li>Customer focused </li></ul><ul><li>Variation reduction </li></ul>
    23. 29. TQM failures and 6  success 1- Leadership <ul><li>6  </li></ul><ul><li>Viewed as a “Mgt Tool” </li></ul><ul><li>More visible activity </li></ul><ul><li>Monitored closely </li></ul><ul><li>Continuous Mgt reviews </li></ul><ul><li>Constant reinvention of the business </li></ul><ul><li>TQM </li></ul><ul><li>Viewed as a “Quality Tool” </li></ul><ul><li>Top Mgt skepticism (OT) </li></ul><ul><li>Occasional. Firefighting. </li></ul><ul><li>Temporary, tied to the leader who started the initiative </li></ul>
    24. 30. TQM failures and 6  success 2- Goals <ul><li>6  </li></ul><ul><li>Ambitious and challenging </li></ul><ul><li>Goals & results are tied to $s </li></ul><ul><li>People can see their results grow </li></ul><ul><li>Closed-loop system helps to adjust </li></ul><ul><li>TQM </li></ul><ul><li>Unclear, fuzzy and hard to measure (meeting or exceeding ..) </li></ul><ul><li>Might meet today's customer needs, but not ready for tomorrow's </li></ul>
    25. 31. TQM failures and 6  success 3- Focus <ul><li>6  </li></ul><ul><li>Attention to all business processes </li></ul><ul><li>Works in transactional and services </li></ul><ul><li>More total than “Total Quality” </li></ul><ul><li>TQM </li></ul><ul><li>Focus on product quality </li></ul><ul><li>Efforts are concentrated on mfg & production </li></ul><ul><li>Not enough focus on customer wants and needs </li></ul>
    26. 32. TQM failures and 6  success 4- Barriers <ul><li>6  </li></ul><ul><li>Cross Functional. </li></ul><ul><li>Targets customer-critical issues </li></ul><ul><li>The built in “Process Management” monitors, measures and improves processes </li></ul><ul><li>TQM </li></ul><ul><li>“ Departmental” Activity </li></ul><ul><li>Improvement projects are done in isolated chunks (Engineering Project, HR project, Mfg project, etc..) </li></ul>
    27. 33. TQM failures and 6  success 5- Application <ul><li>6  </li></ul><ul><li>Involves process owners & Mgrs </li></ul><ul><li>Demands a great diversity of skills </li></ul><ul><li>Adopts tools to circumstances </li></ul><ul><li>Uses tools that get results </li></ul><ul><li>TQM </li></ul><ul><li>More of a “Quality Police” activity </li></ul><ul><li>Quality tools are applied by the quality experts only </li></ul><ul><li>Inappropriate / unnecessary tools could waste resources </li></ul>
    28. 34. TQM failures and 6  success 6- Training <ul><li>6  </li></ul><ul><li>Demanding and heavy </li></ul><ul><li>Well structured – hands on </li></ul><ul><li>Training is mandatory and sometimes tied to promotion </li></ul><ul><li>Training is not limited to Quality professionals </li></ul><ul><li>TQM </li></ul><ul><li>Light and weak </li></ul><ul><li>Not well structured </li></ul><ul><li>More theory, less applications </li></ul><ul><li>Less emphasis on advanced statistical analysis </li></ul>