Six Sigma Executive Overview
                                           March, 2008


    Define             Measure


Con...
Objectives
The purpose of today’s session is to:

                     Describe the Six Sigma Breakthrough strategy



   ...
Agenda Of Topics


Section I               Six Sigma Overview
Section II              Management And Organizational Infras...
Section I
Section I : Overview Of Six Sigma
        The “Goodness” Level
        The Cost Of Poor Quality (COPQ)
        W...
The Goodness Level of 99%
               20,000 lost articles of mail per hour
               Unsafe drinking water almost...
If we applied Six Sigma…
                    1 mis-delivery instead of 3,000 mis-deliveries
                 for every 300...
What is Cost Of Poor Quality?
       COPQ is categorized into:
            Internal failure costs
            External fai...
Examples of COPQ
   Very often, COPQ issues can be                  To ensure success with Six
   hidden from view. Exampl...
What is Six Sigma?
  Highly disciplined strategy with laser focus on developing
  and delivering near-perfect products and...
What is Sigma?
   A statistical technique                         Sigma measures the
   to normalize reporting
           ...
Definition of Six Sigma
Technical Definition
                                            Normal Distribution Shifted
     ...
Where It All Came From
   Motorola noted that many operations, such as           Process Capability
   complex assemblies,...
Sigma Quality Level & Failure Rates
    Cp                 ppm                                                        Erro...
ormal Distribution
Using the standard deviation, we can determine the proportion of the product/process which will
be betw...
Reduce The Process Variation
             Off-Target                                            Too Much Variation




   ...
Six Sigma Overall Approach
             Practical                             Statistical
             Problem            ...
Six Sigma Is A Closed Loop System
                              The Closed Loop System
                                   ...
Sigma Examples
                           Application Availability (24 X 7, except for six hour maintenance
              ...
Improved Profitability
           Customer Satisfaction + Efficient Systems = Improved Profitability




         Three wa...
Six Sigma Vs. Continuous Improvement


                                                                  EVOP:
           ...
Six Sigma is Lean


 Production                  Material               Machine           Workplace            Process
  C...
Streams Of Six Sigma
           Transactional Six Sigma




                                                              ...
Six Sigma Across The Entire Enterprise

 Business Level                                     Executive Strategy and
       ...
Basic Building Blocks
         Defining and using business objectives and metrics that focus our
         attention on per...
Strategic Business and Quality Metrics

                                    CSI, Sales, delivery times, cost
             ...
Six Sigma Infrastructure
                                                Six Sigma Infrastructure
           Business & Qu...
Functions In A Six Sigma Organization
    Champion                        Black Belt         Function        Structure Opt...
DMAIC Methodology

                     Define                                                                            ...
DMAIC Process

Measure                                                                                 Define
            ...
Six Sigma Results & Benefits
  Improved Customer Satisfaction
      Assure Products And Services Meet
      Customer Requi...
Section II
                     Section II                Management & Organizational
                                    ...
Six Sigma Steering Committee

                                       Functions
                                           ...
Champion
                                       Functions
                                             Communicate the vis...
Master Black Belt
                                    Functions
                                           Provide technic...
Black Belts
                                    Functions
                                           100% dedicated for 2 ...
Green Belts
                                     Functions
                                            20% dedicated for 2...
All Employees
                                      Functions
                                            Work to achieve ...
Typical Six Sigma Training
                      Six Sigma Overview & the DMAIC Roadmap
Week                  Process Mapp...
Section III
Section III : DMAIC Breakthrough Methodology
          The DMAIC Roadmap
         The Funneling Effect
       ...
The DMAIC Process Roadmap
 Step 1: Define Process                     Step 2: Measure Existing Process
                   ...
The Funneling Effect
Define
               Process Maps                                 30+ Inputs All X’s
               ...
Six Sigma Tools & Techniques

         Y = f ( X 1 , X 2 , X 3 ,..., X k )
     Define               Measure              ...
Tools…Techniques…Tools…Techniques
   Process Mapping                                 Failure Mode & Effect Analysis
   Cau...
Six Sigma DMAIC Tools
                            Key Analytical Tools      Software and software training
      Define   ...
Six Sigma DMAIC Define

              Define

       Define Activities
             Identify Project, Champion and Project...
Six Sigma Define Activity Flow
VOC, Examine
Candidate Projects


               Effort/Impact
                 Analysis

 ...
Voice Of The Customer (VOC)                                           DMAIC
                                              ...
Critical To Quality Characteristics
     Use QFD, C&E Matrix, Tree
       Diagrams, etc. to define                       C...
Effort/Impact Analysis
Determine a                                                                             Candidate S...
Develop Project Charter
                                                                                                  ...
Problem Statement, Objective & Scope
 A clear description of the problem to
 communicate to other people in the
process an...
Determine Resources
                                             Determine the Stakeholders
                              ...
Project Plan
                                            SIX SIGMA Project Plan                  Project Name & Number:
  ...
Six Sigma Executive Overview
Six Sigma Executive Overview
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Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
Six Sigma Executive Overview
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Overview of the benefits of implementing 6 Sigma. Intended for Executives and Decision Makers.

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Transcript of "Six Sigma Executive Overview"

  1. 1. Six Sigma Executive Overview March, 2008 Define Measure Control Analyze Improve © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 1
  2. 2. Objectives The purpose of today’s session is to: Describe the Six Sigma Breakthrough strategy Understand the roles of Six Sigma key players Understand the DMAIC methodology Review Metrics, Balanced Scorecards and Dashboard Review An Approach for Implementing Six Sigma Discuss the advantages of implementing Six Sigma © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 2
  3. 3. Agenda Of Topics Section I Six Sigma Overview Section II Management And Organizational Infrastructure For Six Sigma Section III DMAIC Breakthrough Methodology Section IV Business Metrics, Balanced Scorecards, And Dashboards For Six Sigma Section V Q&A © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 3
  4. 4. Section I Section I : Overview Of Six Sigma The “Goodness” Level The Cost Of Poor Quality (COPQ) What Is Six Sigma Technical & Business Definitions Reduce The Variation Six Sigma Examples Improved Profitability Six Sigma Vs. Continuous Improvement Streams Of Six Sigma Six Sigma Across The Entire Enterprise Basic Building Blocks Results & Benefits © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 4
  5. 5. The Goodness Level of 99% 20,000 lost articles of mail per hour Unsafe drinking water almost 15 minutes per day 5000 incorrect surgical operations per week 2 short or long landing at most major airports each day 200,000 wrong drug prescriptions each year No electricity for almost 7 hours per month 4,100 crashes for every 500,000 computer restarts 60 months would not balance for 500 years of month- end closing 1.68 hours of dead air (per channel) for every week of TV broadcasting © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 5
  6. 6. If we applied Six Sigma… 1 mis-delivery instead of 3,000 mis-deliveries for every 300,000 letters delivered Less than 2 crashes instead of 4,100 crashes for every 500,000 computer restarts .018 months would not balance instead of 60 months for 500 years of month-end closing 1.8 seconds of dead air instead of 1.68 hours of dead air (per channel) for every week of TV broadcasting 340 defective tax returns in the 100 million Tax returns filed each year. 3.4 car accidents for every 1,000,000 miles driven © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 6
  7. 7. What is Cost Of Poor Quality? COPQ is categorized into: Internal failure costs External failure costs Appraisal costs Prevention costs COPQ means not doing what is RIGHT the first time COPQ includes reworks, scraps, meetings with no purpose, etc. Hidden issues are usually more important than visible issues It is very important for organizations to direct their efforts to these hidden issues. While 6 sigma techniques can flatten the overall costs, management needs to ask the right questions so that these issues are effectively addressed. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 7
  8. 8. Examples of COPQ Very often, COPQ issues can be To ensure success with Six hidden from view. Examples sigma, management must include: have: Maintenance Litigation Need Rerun costs Vision Lost time Plan Lost Management Lost business Lost opportunities Lost Assets Lost credibility Project Rework And much more © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 8
  9. 9. What is Six Sigma? Highly disciplined strategy with laser focus on developing and delivering near-perfect products and services. Management mandated and directed improvement program to achieve breakthrough profitability and quantum gains in quality and customer satisfaction A business improvement approach focused on core business and Customer needs. Seeks to find and eliminate causes of mistakes in areas of critical importance to customers. A systematic method that uses Champions, Black Belts and Green Belts to facilitate change A Greek symbol for measuring performance variation A metric for evaluating performance of the bottom line. A standard of excellence (3.4 defects per million opportunities) © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 9
  10. 10. What is Sigma? A statistical technique Sigma measures the to normalize reporting results in terms of events to the same scale, allowing processes to per million. be compared Events can be failures, throughout the defects, costs, or other organization. measurable data. It levels the field, Differences between allowing apples to be sigma values are not compared to car equal. production, by putting Six Sigma is the nominal the results of both in goal. the same language. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 10
  11. 11. Definition of Six Sigma Technical Definition Normal Distribution Shifted LSL USL ±1.5 s 12.5% 12.5% 3.4 DPMO 3.4 DPMO Cp=Cpk = 2 - 6s -5s -4s -3s -2s -1s 0 +1s +2s +3s +4s +5s +6s 6s to LSL 6s to USL Sigma Level Parts Per Million Business Definition: 6 Sigma 3.4 ppm A Management driven, scientific 5 Sigma 233 ppm methodology for product and process 4 Sigma 6210 ppm improvement which creates 3 Sigma 66,810 ppm breakthroughs in financial performance 2 Sigma 308,770 ppm and Customer satisfaction 1 Sigma 697,672 ppm © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 11
  12. 12. Where It All Came From Motorola noted that many operations, such as Process Capability complex assemblies, tended to shift 1.5 Sigma (Cp) is a metric that over time. So, describes how well a a process, with a normal distribution and normal variation of the mean, would need process to have specification limits of plus or minus meets requirements. 6 sigma in order to produce less than 3.4 This works only with defects per million opportunities. a CENTERED mean. This failure rate can be referred to as DPO or DPMO. A Six Sigma Quality Level is said to translate Process Performance (Cpk) to process capability index values for Cp and Cpk requirements of 2.0 and 1.5, respectively. Similar to Cp, but accounts for To achieve this basic goal, a Six Sigma program Process shifts and drifts might then be able to produce at least 99.99966% “quality” at the “process step” (i.e., no more than 3.4 defects per million parts / opportunities or process steps if the process mean were to shift by as much as 1.5 sigma). © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 12
  13. 13. Sigma Quality Level & Failure Rates Cp ppm Error/Defect Success % Sigma Level PMO Rate 0.33 317,311 1 609,000 31.00% 0.67 45,500 2 308,000 69.20% 1.00 2,700 3 66,800 93.32% 1.10 967 4 6,210 99.38% 1.20 318 5 230 99.977% 1.30 96 6 3.4 99.99967% 1.33 63 The Sigma Quality Level 1.40 27 Sigma vs Percent 1.50 6.8 100 90 1.60 1.6 Percent 80 70 1.67 0.6 60 50 40 30 1.0 1.5 2.0 2.5 3.0 Failure Rates for Cp Values 3.5 4.0 4.5 5.0 5.5 Percent Sigma 6.0 6.5 7.0 © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 13
  14. 14. ormal Distribution Using the standard deviation, we can determine the proportion of the product/process which will be between the upper and lower specification limits, and thus considered acceptable. LSL USL 3.4 DPMO 3.4 DPMO - 6s -5s -4s -3 s -2s -1s 0 +1s +2s +3s +4s +5s +6s 66.26% 95.46% 99.73% 99.9937% 99.999943% 99.9999998% © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 14
  15. 15. Reduce The Process Variation Off-Target Too Much Variation Centered On-Target Center Reduce Process Spread The objective is to understand customer requirements and reduce process variation and defects © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 15
  16. 16. Six Sigma Overall Approach Practical Statistical Problem Problem State Hypothesis Y = f (x1, x2, …, xn) Practical Statistical Solution Solution © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 16
  17. 17. Six Sigma Is A Closed Loop System The Closed Loop System Customers Y = f (X) Y's Organization/Process X Y's Inputs Y's X X X's Products Profits Business Process Model © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 17
  18. 18. Sigma Examples Application Availability (24 X 7, except for six hour maintenance window each Sunday Morning). 1 defect = 1 minute lost. 30 day month, with four Sundays: 41,760 minutes or opportunities for failure/error. Defects/Opportunities * 1 million (30 minute outage/41,760) * 1,000,000 = 718.39. Sigma Quality Level = 4.69 (99.93% availability) An Olympic sport person who shoots 398/400 (99.5%) is at 4.08 Sigma. 399/400 (99.75%) is 4.31. If an airplane has 1 million parts, it will have 230 defective ones at 5 Sigma. (99.977% are good). If you win 60% of your bets at Las Vegas, and bring home a lot of $, your Sigma is only 1.75! © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 18
  19. 19. Improved Profitability Customer Satisfaction + Efficient Systems = Improved Profitability Three ways to improve financial performance: Increase Sales Improve Customer satisfaction and market position Decrease the Cost of Goods Sold Reduce variation and defects Understand root cause of issues and eliminate the source of problems Improve process performance and reduce waste using lean principles Increase Price If possible by adding more value added services or product features © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 19
  20. 20. Six Sigma Vs. Continuous Improvement EVOP: Large Samples, Minimum Results Breakthrough Strategy Six Sigma Breakthrough 70% Improvement 1 2 3 4 5 © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 20
  21. 21. Six Sigma is Lean Production Material Machine Workplace Process Control Flow/Control Management Management Management Pull Pull Total Productive Standard SPC Systems Systems Maintenance Work One Piece Kanban Quick Visual Root Cause Flow Systems Changeover Factory Analysis Load Ohno’s Visual Defect SMED Leveling Supermarket Controls Reduction Pacemaker Value Stream Poka 5S Loop Mapping Yoke Continuous Flow Eliminate waste (Muda), reduce inventories and production costs while improving quality © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 21
  22. 22. Streams Of Six Sigma Transactional Six Sigma Six Sigma touches on all aspects of the Focused on operational excellence, Customer satisfaction and cost reduction within all components of the operation. Areas of focus include Sales, HR, Finance, Materials, etc. Business Enterprise Manufacturing Six Sigma Focused on product production excellence, variation and defect reduction, lean manufacturing, Customer satisfaction and cost reduction within all components of the production and delivery process. Design For Six Sigma (DFSS) Focused on product design excellence, Customer satisfaction and cost reduction within all components of the development and new product introduction process. Requires the rigorous application of three key tools: QFD, FMEA, and DOE. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 22
  23. 23. Six Sigma Across The Entire Enterprise Business Level Executive Strategy and Decisions Operational Level Black Belts Process Level Process Owners © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 23
  24. 24. Basic Building Blocks Defining and using business objectives and metrics that focus our attention on performance and defects that are most important to the customer and have the greatest potential for impacting the bottom line Business & Quality Metrics Dedicated Systematic resources and Approach to focused improving infrastructure, performance and trained in the use reducing defects of the 6 Sigma which are problem solving Six Sigma DMAIC important to the and process Infrastructure Methodology customer improvement (qualitative & methodology Profitability statistical) Customer Satisfaction Growth Transformation © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 24
  25. 25. Strategic Business and Quality Metrics CSI, Sales, delivery times, cost per unit, Yield, DPU, DPMO, customer response times, Web hit rates, Rework/scrap rates, etc. (Critical Business Business & Quality Metrics Elements) Management objectives and dashboard forms the core of the strategic Business & Quality Metrics and is flowed down to other departments and process areas to provide leading and lagging indicators of Six Sigma DMAIC performance Infrastructure Methodology Measure for Predictors and for Results. Efficiency Vs. Effectiveness The Vital Few Vs. The Trivial Many. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 25
  26. 26. Six Sigma Infrastructure Six Sigma Infrastructure Business & Quality Metrics Six Sigma DMAIC Infrastructure Methodology Champion Executive Committee MBB © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 26
  27. 27. Functions In A Six Sigma Organization Champion Black Belt Function Structure Options Top Management Project Team Leader Executive Six Sigma Steering Committee 3 day training 4 week training Direction Executive Steering Council Identify key Lead the project business issue Master in Six Sigma Six Sigma Manager tools/techniques Six Sigma Director Allocate resources Management Apply DMAIC Master Black Belt Support overall 1 / 100 employee Process Champion program Owner Sponsor 1 / business unit Sponsor Process Owner Master Black Belt Green Belt Champion Internal consultant Process specialist Coach Master Black Belt 4-6 week training + 1-3 week training Black Belt experience Monitor overall Execute the project Team Leader Trained Supervisor/ Facilitator program Know most Black Belt Master in tools/techniques Green Belt tools/techniques Apply DMAIC Team Associate with Team Training Teach, train & coach 1 / 20 employee Member Associate with Process Six Sigma Knowledge 1 / business unit Green Belt © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 27
  28. 28. DMAIC Methodology Define Measure Business & Quality Metrics Control Six Sigma Infrastructure DMAIC Methodology Analyze SPC & Improved A OVA & Controls Regression Improve Design of Experiments © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 28
  29. 29. DMAIC Process Measure Define Define the Measure and Problem Analyze data and Project Objective process X1 Y1 Project Goal performance to X2 Y2 determine the X3 PROCESS Y3 Identify ways to improve critical variables X4 and root cause of the process and validate the problem the solution Improve Analyze Control Establish Controls on the critical Xs so the improvements will be maintained © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 29
  30. 30. Six Sigma Results & Benefits Improved Customer Satisfaction Assure Products And Services Meet Customer Requirements Improved Quality, Efficiency & Cost Of Goods Sold Waste, Defect And Variation Benefits may include any of the following: Reduction Bottom Line Results Financial Savings (Hard And Soft) Hard dollar savings (cost reduction) Self-sustaining Infrastructure Soft dollar savings (cost avoidance) Defined Roles And Responsibilities Improved Customer satisfaction Empower Champions, Black Belts And All Employees To Make Improvement in the performance metrics Meaningful Improvements In (cycle time, yield, defects, etc.) Performance Improved job satisfaction (reduction in Effective Communication frustration) Commonality Language, Training Materials, Tools Short Project Completion (3-6 months) & Software When considering benefits… what must Methodology change for the savings to occur? Expectations Solutions Financial Tracking (Establish, Maintain Metrics) © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 30
  31. 31. Section II Section II Management & Organizational Infrastructure for Six Sigma Executive Staff Champion Master Black Belt Black Belts Green Belts All Employees Typical Six Sigma Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 31
  32. 32. Six Sigma Steering Committee Functions Set the vision Create the mandate for improvement Initiate and fund the activity Establish and maintain the reporting structure Responsibilities (5%+ of time) Identify Champions in each functional area Monthly review of projects by Champion Measure Champion results Training ½ day Executive Overview 3 day Champion Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 32
  33. 33. Champion Functions Communicate the vision Create the mandate for improvement Provide direction and remove barriers Achieve financial results and communicate success Responsibilities (10%+ of time) Identify Black Belts and Green Belts Identify and approve all Six Sigma projects Biweekly review of all projects Measure Black Belt performance Training 3 day Champion Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 33
  34. 34. Master Black Belt Functions Provide technical expertise on Six Sigma and Lean methodology to Black Belts and teams Work in support of the Black Belt and Champion Assist in education and training activities Responsibilities (100% of time) Work daily with team members, Black Belts and Champions Participate in the review of projects Monitor all Six Sigma projects Training 20 day Black Belt Training, 2 years minimum as a Black Belt and a Masters Degree in a related field © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 34
  35. 35. Black Belts Functions 100% dedicated for 2 years to process improvement Work on improvement projects with other Green Belts and Team Members Achieve financial results for each project Goal of $350K+ Responsibilities (100 % of time) Use the DMAIC methodology to create breakthroughs in Mentor, performance Teacher, Report progress to the Champion Coach, Identifier, Hold team meetings and provide excellent project management Influencer Work with the Master Black Belt Training 20 day Black Belt Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 35
  36. 36. Green Belts Functions 20% dedicated for 2 years to process improvement Green Belts Work on improvement projects with other Green Belts and Team Members Achieve financial results for each project Goal of $350K+ Responsibilities (20%+ of time) Use the DMAIC methodology to create breakthroughs in performance Report progress to the Champion Hold team meetings and provide excellent project management Work with the Black Belt or Master Black Belt Training 10 day Green Belt Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 36
  37. 37. All Employees Functions Work to achieve excellence in daily work Participate in Six Sigma projects Support team activities Identify opportunities for improvement Responsibilities (5-10%+ of time) Participate in Six Sigma activities as requested Complete action items as assigned by the team Attend team meetings Training 1 day Six Sigma Employee training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 37
  38. 38. Typical Six Sigma Training Six Sigma Overview & the DMAIC Roadmap Week Process Mapping, Quality Function Deployment, Effect Failure Re lationship V ery stron g relatio nship (9) S trong rel ationsh ip (3) W eak rel ations hip (1) No mark indicates no import anc e or relat ionship HOUSE OF QUALITY for Univ ersity of Detroit Mercy MBA Program Q UA LITY FUNCTIO N DE PLO YM ENT (QFD) CHA RT + - - - Corre lation + - Hi gh posi tive Po sitive Hi gh Negative Ne gative Mode + + + + - + + + + Failure Mode & Effect Analysis + + + + + + + + One Program Quality /Reputation Fees ($) Schoo l R equiremen ts (HOWs) Maintain c ompetitiv e admiss ions requirements * AACS B - The Asso ci atio n to A dvance Maintain c ompetitiv e c ours e/regis tration fees S tay current on changing educ ational needs Maintain s trong ties to bus ines s community O ffer c ours es during weekdays , ev enings , C olleg iate S ch oo ls of Busi ness (int ern ati ona l) P rovide/ac cept govt . loans , sc holar ships , E st ablis h global bus ines s per spectiv e O ffer broad base of busines s cours es P roduc e/ cr eate s uc c es s ful graduates Maintain ex cellenc e with AA CSB * grant s, ot her f inanc ial as s is tanc e E valuate s taff c ompetency C ustom er I mportance Organizational Effectiveness weekends , online Custome r Re quirements (W HATs) Custom e r Ra tings 1 2 3 4 5 Current Excellent school accreditation 4 3 Scho ol Acede mics Cause Tailored program (curriculum) 1 Flex ible admissions qualifications Controls 2 Broad availability of courses Process Capability Program application to real-w orld 4 scenarios Costs Program affordability 5 Technical Difficulty 4 5 2 3 4 5 1 4 2 3 1 Objective Target Values AA A AA AA A A A AA AA A U DM UD M A AA AA B A AA AA A AA A AA AA A B AA AA MSU Objective M easures MSU AA AA A A AA A A A AA A AA AA AA Acme Ed. Acme Ed. A B B A B B A B AA A B AA A Technical Absolute 48 48 36 57 13 42 12 22 24 45 8 Importance Relative 2 2 5 1 8 4 9 7 6 3 10 Measurement Systems Analysis Quality/ grading Sc ale A A A - Out standing A A - Excellent A - Good B - Fair Statistical Thinking Observed Process Variation Week Hypothesis Testing and Confidence Intervals Actual Process Variation Measurement Variation Correlation Two Multi-vari Analysis Long-term Process Variation Short-term Process Variation Variation within Sample Variation due to Variation due to Gage Operations Repeatability Bias Stability Linearity Reproducibility Regression Analysis ANOVA Week Design of Experiments Response Surface Designs Three Multiple Regression Facilitation Tools Control Plans Week Mistake Proofing Team Development Four Parallel Specialized Tracks © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 38
  39. 39. Section III Section III : DMAIC Breakthrough Methodology The DMAIC Roadmap The Funneling Effect Six Sigma Tools & Techniques Define Measure Analyze Improve Control © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 39
  40. 40. The DMAIC Process Roadmap Step 1: Define Process Step 2: Measure Existing Process Map process and Identify Key Inputs and Outputs Improvement Build Cause and Effects Matrix to prioritize key activities Goals & Objectives at Establish Key Metrics Executive, operations, and Establish Measurement System Capability Project levels Establish Process Capability Baseline VOC Requirements Project Charter Team Charter Step 3: Analyze Process Estimated $ Impact Complete FMEA and evaluate Control Plan Leadership approval Perform Multi vari Analysis to identity Potential Critical Inputs Analyze Data and Prioritize Key Input Variables Identify Root Cause or Causes Develop Plan for Next Phase Step 5: Process Control Step 4: Improve Process Establish Controls on Improved Process Verify Critical Inputs to sustain improvement Use Appropriate Tools To Improve the Process Implement Control Plan Optimize Critical Inputs Validate the Improvement Verify Long Term Capability Continuously Improve Process © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 40
  41. 41. The Funneling Effect Define Process Maps 30+ Inputs All X’s Cause & Effect Measure Matrix 10-15 1st “Hit List” Failure Mode & Analyze Effects Analysis 8-10 Screened List Multi Vari Studies Design of Found Critical X’s Improve Experiments (DOE) 4-8 Control Plans 3-6 Controlling Critical X’s Control Critical Input Variables © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 41
  42. 42. Six Sigma Tools & Techniques Y = f ( X 1 , X 2 , X 3 ,..., X k ) Define Measure Analyze Improve Control Metric Assessment Process Maps Cause & Effect Matrix Potential Failure Mode & Effect Analysis Measurement Systems Analysis Capability Analysis Multiple Variable Analysis Design of Experiments Statistical Process Control Control Plans © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 42
  43. 43. Tools…Techniques…Tools…Techniques Process Mapping Failure Mode & Effect Analysis Cause & Effect Matrix Multi Vari Studies Measurement Systems Analysis Fractional Factorial Experiments Capability Analysis Full Factorial Experiments Descriptive Statistics Response Surface Methods Graphical Techniques Transformations Box Plots Normal Distribution Histograms Sample Size Determination Scatter Plots Screening Studies Run Charts Fishbone Diagrams Pareto Charts Hypothesis Testing Check Sheets Statistical Process Control Charts F Test Correlation t-Test Simple & Multiple Regression Chi Square Test Inferential Statistics Tests For Normality Central Limit Theorem Half Normal Plots Confidence Intervals Analysis Of Variance © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 43
  44. 44. Six Sigma DMAIC Tools Key Analytical Tools Software and software training Define is an investment. It will likely Process Mapping take several waves of Six Sigma to start reaching the full potential of any software. Ask Measurement Systems Measure Analysis & Process yourself the following: Capability What analysis do we need the software for? Analyze Statistical Tests, Modeling & Root Cause Analysis How well will it integrate with existing software? Improve Brainstorming, Design of Experiments, FMEA, & Do we already own the software? Validation What do our consultants Statistical Process Control recommend? Control © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 44
  45. 45. Six Sigma DMAIC Define Define Define Activities Identify Project, Champion and Project Owner Determine Customer Requirements and CTQs Define Problem, Objective, Goals and Benefits Define Stakeholder/Resource Analysis Map the Process Develop Project Plan Define Quality Tools Project Charter and Plan Effort/Impact Analysis Process Mapping Tree Diagram © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 45
  46. 46. Six Sigma Define Activity Flow VOC, Examine Candidate Projects Effort/Impact Analysis Develop and Approve Project Charter Define Customer CTQs Complete SIPOC and Process Map © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 46
  47. 47. Voice Of The Customer (VOC) DMAIC Methodology Define VOC is often full of emotions. We need to restate customer statements into fact-based, performance requirements that Why don’t you guys learn how to meet a we need to focus on schedule? Your service quality is too poor Identify Customer Collect Customer Data When will you learn how to provide service and a Customer first attitude? Analyze Customer Data Why don’t you tell us when there is a problem? Determine customer I sent out e-mail after e-mail with no response! (CTQ’s): Why do you try and make your customers CTQ – Critical To Quality CTD – Critical To Delivery responsible for your quality problems? CTC – Critical To Cost Your Cycle Time is unacceptable Cost, Quality, Features, Availability © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 47
  48. 48. Critical To Quality Characteristics Use QFD, C&E Matrix, Tree Diagrams, etc. to define CTQ’s are the FOCUS of the Customer CTQs based on the Problem Statement & the Customer’s Point of View Project Charter Detailed Customer eeds And Product Specifications Customer Related Priorities eeds Customer Customer Convenience Communications eeds Expectation Customer Service Basic Stated eeds Safety Expected Real eeds Desired Perceived eeds Unanticipated Cultural eeds © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 48
  49. 49. Effort/Impact Analysis Determine a Candidate Six Conduct candidate Sigma Project(s) effort to project list and impact Project Champion potential analysis and benefits: and Owner prioritize the Manufacturing project list Materials Project Effort Impact 1 6 1 Management 2 3 3 Effort / Impact Analysis 3 4 3 Other 4 7 3 GB Projects BB Projects 10 5 10 3 operations 6 2 6 9 7 5 6 8 8 8 6 7 9 1 9 6 10 9 9 Impact 5 Impact 4 3 2 1 0 Projects with high impact are 0 2 4 6 8 10 12 preferred Effort © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 49
  50. 50. Develop Project Charter SIX SIGMA Project Charter Establish direction for the Resource Requirements Project No: Location: General Information Review Schedule Activity Date Project Name: Business Start project by documenting Project Leader: GB/BB: Segment: Business D M Master BB: Objective: A H/O Champion: Customer I Team Members: Name Function % Time Initials CTQ(s): C Current Close Process Capability: Sigma, Cpk, DPMO, Cycle-time, etc. Date: Project Definition Project Problem Statement: Problem Project Objective Statement: Objective & Scope Goal/target Project Scope/Limitations: Resource requirements Financial benefits Project Goals and Targets: Strategic benefits Project Plan: See page 2 of the project charter. Project Plan and Gantt Chart Team resources Expected Benefits: Hard Dollar Savings: Soft Dollar Savings: Time frame: Strategic: Project approval Other Benefits: Stakeholder Approval Hands On Champion: Master Black Belt: Name: Name: Signature: Signature: Functional Manager: Black / Green Belt: Name: Name: Signature: Signature: Other: Other: Name: Name: Signature: Signature: Date: © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 50
  51. 51. Problem Statement, Objective & Scope A clear description of the problem to communicate to other people in the process and rally support to improve it A description of the issue or problem What process will the team focus on? What, when, where and how the problem occurs What are the boundaries of the process we are to improve? What is critical to quality (CTQ) from the Where does the process begin? Where does customer perspective? What is it end? nonconforming to specifications? Which customers will be affected / included Define the boundaries of the problem, What is outside of scope for the team? how big is the problem? What constraints or timelines must the team What are the consequences of the work under? problem to the Company and or Customer? Do not state a solution when describing a problem © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 51
  52. 52. Determine Resources Determine the Stakeholders Who will need to be involved and at what level for this project to be successful? Determine Team Members Who will need to be on the team and at what % of their time? Determine any Capital, Test or HR Requirements What materials, testing, software programming, outside services or equipment will be needed? Are those costs acceptable to management? Other Support to be Successful © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 52
  53. 53. Project Plan SIX SIGMA Project Plan Project Name & Number: Site: Location: Revision Date: Problem Statement: Project plan remains Improvement Objective and Scope: through the Goal and Targets life of the Metric(s) project Benefits Baseline Goal Improvement Goals Date Date Date Date Tasks and Timelines Project Phases Activity Assigned to: Start Date: End Date: Status: Review Date Define Project's Customer CTQ Project Charter SIPOC Financial analysis of project's benefits Detailed process map Measure Analyze Improve Control Team Members Team Leader: On Plan/On Schedule Team BB: Behind Plan, with effort can return to schedule Team Members: Behind Plan Task Completed Champion: © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 53

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