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Overview of the benefits of implementing 6 Sigma. Intended for Executives and Decision Makers.

Overview of the benefits of implementing 6 Sigma. Intended for Executives and Decision Makers.

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  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 $350K+ Responsibilities (20%+ of time) Use the DMAIC methodology to create breakthroughs in performance Report progress to the Champion Hold team meetings and provide excellent project management Work with the Black Belt or Master Black Belt Training 10 day Green Belt Training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 36
  • 37. All Employees Functions Work to achieve excellence in daily work Participate in Six Sigma projects Support team activities Identify opportunities for improvement Responsibilities (5-10%+ of time) Participate in Six Sigma activities as requested Complete action items as assigned by the team Attend team meetings Training 1 day Six Sigma Employee training © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 37
  • 38. Typical Six Sigma Training Six Sigma Overview & the DMAIC Roadmap Week Process Mapping, Quality Function Deployment, Effect Failure Re lationship V ery stron g relatio nship (9) S trong rel ationsh ip (3) W eak rel ations hip (1) No mark indicates no import anc e or relat ionship HOUSE OF QUALITY for Univ ersity of Detroit Mercy MBA Program Q UA LITY FUNCTIO N DE PLO YM ENT (QFD) CHA RT + - - - Corre lation + - Hi gh posi tive Po sitive Hi gh Negative Ne gative Mode + + + + - + + + + Failure Mode & Effect Analysis + + + + + + + + One Program Quality /Reputation Fees ($) 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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
  • 54. Understand The Process Understand & Manage The Process, Using Appropriate Tools. Separate the Wheat from the Chaff What you think it is... Process Control Process Improvement VALUE What it actually is... Process Analysis Process documentation Process Identification What it could be... Process Mapping & Management Tools © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 54
  • 55. Map Process With SIPOC DMAIC Methodology Define Who are the suppliers for our Who are the product or What is the most customers for our service? How appropriate end point for the product or capable are they What must my suppliers process? (What product or service? What in meeting our provide to my process to service does the process are their process meet my needs? START deliver to the customer?) requirements for requirements? Boundary performance Suppliers Input Process Output Customers Add Detailed Process Flowchart STOP Boundary © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 55
  • 56. Putting It Together Develop Project Charter Plan Elements Identify and document the customer(s) Identify and document Project Goals and Objectives Develop and Document Problem Statement Identify and Document Defects Identify and Develop Voice of the Customer (VOC) Identify and Document High-Level sub-Process & Owners (SIPOC) Translate and Document VOC into Critical To Quality Characteristics (CTQ’s) Create appropriate Diagrams (Affinity, QFD, CTQ Tree, etc) Finalize Financial Measurements Approve, revise, and distribute Project Charter Review & Identify Planning Tools Develop Project Documentation Negotiate and finalize Project Charter © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 56
  • 57. Six Sigma DMAIC Measure Measure Measure Activities Determine Project Critical Xs and Ys Determine Operational Definitions Establish Performance Standards Develop Data Collection and Sampling Plan Validate the Measurements Measurement Systems Analysis Determine Process Capability and Baseline Measure Quality Tools Quality Function Deployment (QFD) C&E Matrix Measurement Systems Analysis (MSA) Check sheet Process Capability © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 57
  • 58. Six Sigma Measure Flow Determine Critical Measures (Xs and Ys) Data Collection and Sampling Plan Measurement Systems Analysis, Gage R&R, Inspection Effectiveness Process Baseline and Capability Goal Determination Baseline Add Specifications and Compute Sigma and Capability Restate Improvement Goals © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 58
  • 59. What Can You Measure? Almost anything. Common business measurements Cycle time for a repeatable activity IT Metrics Costs Application Availability Defects Abends Customer Satisfaction Network Response Times Availability CPU and Memory Usage Critical Outages Customer Satisfaction – SLA’s Change Management Process © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 59
  • 60. Process Inputs & Outputs HOUSE OF QUALITY Tools that can help assess the relationship for University of Detroit Mercy MBA Program QUALITY FUNCTION DEPLOYMENT (QFD) CHART between key process input & key process output variables Relationship Very strong relationship (9) Strong relationship (3) Correlation High positive Positive + - W eak relationship (1) High Negative + - No mark indicates no importance or relationship - - Negative Cause & Effect (C&E) Matrix + + + + - + + + Tool that can aid with the prioritization of Key Process + + + + + + + + + Input Variables (KPIV) Program Quality/Reputation Fees ($) Matrix lists KPOV’s horizontally, and KPIV’s vertically School Requirements (HOWs) Maintain competitive admissions requirements *AACSB - The Association to Advance Maintain competitive course/registration fees Stay current on changing educational needs Maintain strong ties to business community For each of the output variables, assign a prioritization Offer courses during weekdays, evenings, Collegiate Schools of Business (international) Provide/accept govt. loans, scholarships, Offer broad base of business courses Establish global business perspective Produce/create successful graduates Maintain excellence with AACSB* number. grants, other financial assistance Evaluate staff competency Customer Within the matrix, a number is entered for the effect that Importance weekends, online each input variable has on the output variable. Customer Requirements (W HATs) Custom er Ra tings 1 2 3 4 5 The results for each input variable, the process output Ex cellent school accreditation 4 priority is multiplied times the effect value, and these are 3 School Acedemics Tailored program (curriculum) summed to determine the results for that input variable. Flexible admissions qualifications 1 2 Broad availability of courses Program application to real-world Process Output Variables scenarios 4 A B C D E Costs Program affordability 5 Prioritization umber 3 1 6 10 4 Re sults % Technical Difficulty Objectiv e Target Values 4 AAA 5 AA 2 3 4 AAA 5 1 4 A 2 AAA 3 AAA 1 U DM 1 2 3 6 84 36 Objectiv e Measures M SU U DM AAA AA AA AAA B A AAA AA AAA A AA A AAA AAA AAA A AA B AA AA AA AA M SU Acme Ed. Process 2 7 4 2 3 63 27 Technical Acme Ed. Absolute 48 A 48 B 36 B 57 A 13 B 42 B 12 A 22 B AAA 24 45 B AAA 8 Importance Input 3 5 1 25 11 Relativ e 2 Quality/grading Scale 2 5 1 8 4 9 7 6 3 10 A A A - Outstanding Variables 4 6 4 22 9 A A - Excellent A - Good 5 2 3 42 18 B - Fair Totals 236 100 © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 60
  • 61. Fishbone Material Machine Manpower No Automated Lack of Technical Skills Variation In ERP Estimation Tools Lack of Communication 1. Oracle 1. Wrong & Costly No Clear Customer Requirements 2. PeopleSoft Estimates 3. Seibel Lack of Project Management Skills 2. Lengthy Cycle 4. Other ERP Products Time Improve Accuracy of New Customer Activation By 80% System Design Criteria Customer While reducing cost by 50% Location Wrong Cost/Margin Estimate Development Data Center Testing/Staging Capacity Non-Standard Requirements Gathering (Inadequate Functional Specs) UAT / Last Minute Data Center Enhancements Humidity/ Wrong Architecture Solution(s) Production Cleanliness Different Project Management Approaches Measurement Environment Method © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 61
  • 62. QFD – The “House of Quality” Very powerful tool to translate customer “Roof” requirements Correlation Matrix Requires a lot of time and resources to conduct “How” Design Can be used in many Requirements different areas of the business: “What” Importance Ratings Planning Testing Primary Engineering Secondary Relationship Customer Tertiary Matrix Ratings Manufacturing Distribution Customer Services Requirements Helps assess the relationship between “How Much” KPIV’s and KPOV’s © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 62
  • 63. Methods For Collecting Data Formulate a clear statement of the problem Data is meaningless without an Operational Definition Define precisely what is to be measured Manual vs. automatic data collection methods – Advantages List all important characteristics to be measured and disadvantages Carefully select the right measurement technique Comparing more than a few numbers is limited by the Construct an uncomplicated data form average human brain Decide who will collect the data Large amounts of data are difficult to analyze unless it is Arrange for an appropriate sampling method presented in easily digested format Decide who will analyze and interpret the results Graphs / Charts Decide who will report the results Histograms / Tallies Pareto diagrams Data Collection Plan Define What to Measure Define How to Measure Who will Sample Plan Do it? Type of Operational Measurement Data Tags Needed Data Collection Person(s) What? Where? When? How Many? Measure Measure Definition or Test Method to Stratify the Data Method Assigned Name of X or Y Clear definition of Visual Data tags are Manual? State What Location How The number parameter attribute or the measurement inspection defined for the Spreadsheet? who has measure is for often of data or condition discrete defined in such a or automated measure. Such Computer based? the being data the points to be data, way as to achieve test? as: time, date, etc. responsibility? collected collection data collected measured product or repeatable results Test instruments location, tester, is per sample process from multiple are defined. line, customer, collected data observers buyer, operator, Procedures for etc. data collection are defined. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 63
  • 64. Data Types & Sampling Designs You can use one or more of the following sampling designs Variables Attribute Sampling designs help ensure a representative Characteris Measurable Countable sample of the process without having to collect massive amounts of data tics Continuous Discrete units or Sampling Designs May derive occurrences Simple Random Sampling – every data point from counting Good/bad has equal chance of selection Sequential Sampling – In Sequence Types of Length Number of defects Stratified Sampling – Refer to Check Sheets Data Volume Number of Cluster Sampling – Time, Geography, etc Time defectives Systematic Sampling – Every 10th items, for Number of scrap example items Subgroup Sampling – Exactly what it means Examples Width of door Audit points lost gap Paint chips per unit Sampling Plan Worksheet Lug nut torque Defective lamps Purpose of the Experiment: Fan belt Output: How will you measure it? tension Inputs Data 1.7 inches 12 scratches Controlled 1) How will you measure it When will you measure it? Examples 32.07 psi 8 rejected parts 2) 3) 11.764 32 paint runs 4) seconds Uncontrolled How will you measure it When will you measure it? 1) 2) 3) 4) © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 64
  • 65. How is Capability Analysis Made? Capability analysis is used with continuous data whenever you need to compare actual process performance to the performance standards. You can use this tool in the Measure phase to describe process performance in statistical terms. These steps assume that a control chart has been previously constructed and the system has been determined to be stable. The specifications are also assumed to be known. These steps address capability for variables data. 1. Construct a Histogram 2. Calculate the estimated Standard Deviation 3. Sketch the Distribution 4. Calculate the % outside the specifications 5. Calculate Cp and Cpk 6. Analyze the Results © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 65
  • 66. Putting It All Together Identify Key Measures / Metrics Develop your Data Collection Plan Document and Communicate the Variances for all key processes Analyze the Measurements Identify and describe the Critical To Quality Processes. Isolate and verify critical processes Assess Process Capability Calculate the Sigma Quality Level © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 66
  • 67. Six Sigma DMAIC Analyze Analyze Analyze Activities Map Process And Stratify Data Establish Causal Relationships Using Data Analysis Of The Process Map Determine Root Cause(s) Using Data Analyze Quality Tools Statistical Analysis Of Data Multi-vari Analysis Failure Mode Effect Analyis Histogram Pareto Diagram Run Chart Scatter Graph © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 67
  • 68. Six Sigma Analyze Flow Map the processes & stratify the data to identify area of potential problems Apply Multi Vari Studies Apply FMEA To identify & eliminate Causes Of Variability To eliminate potential failure modes Determine the “root cause” of the problem after you Conduct SOV Studies If hypothesis is not correct, go back Generate & evaluate “hypothesis” To the beginning of the cycle As to the cause of the problem Perform Statistical Testing Perform Correlation & A OVA, t test, F test, etc Regression Analysis Validate or refute suspected causes Get Ready to Through analysis IMPROVE! © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 68
  • 69. “Analyze” Deliverables & Checkpoints Data and Process Analysis Identify gaps between Root Cause Analysis current performance and Generate list of possible the goal performance causes (sources of variation). Segment and stratify possible causes (sources of variation). Prioritize list of 'vital few' causes (key sources of variation). Verify and quantify the root causes of variation. Quantifying the Gap/Opportunity Determine the performance gap. Display and communicate the gap/opportunity in financial terms. © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 69
  • 70. Analyze the Process Map for Waste When Mapping the Process Consider the Following: What you think it is... What it actually is... What it could be... © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 70
  • 71. FMEA Model Causes (Process Input) Failure Mode (Process Step) Effect Controls (External Customer or Downstream Process) © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 71
  • 72. Multi-Vari Studies Unlike Statistical Process Identifies inherent process capabilities Control (SPC) where the and limitations variables will have ONE Multi-vari tools and charts are useful representative value when for analyzing 3 types of variation measured, variation is inevitable; hence, Multi-vari analysis Positional – Within Piece / Process Studies, tools, charts, and Cyclical – Piece to Piece analysis used to investigate the Temporal – Time to Time (Over stability or consistency of a Time) process while in production Multi-vari charts consist of a series of The process is monitored in its vertical lines along a time scale. natural state, therefore Data Collection is passive. Data is collected for a short period of time and analyzed to determine capability, stability, and relationships between Multi-Vari Chart for Days by Week - Engineer Main Effects Plot - Data Means for Days KPIV’s and KPOV’s 15 Week Week 1 Week 2 11 Week ERP Type Engineer 9 10 as Dy 7 D a ys 5 5 3 E ft l ur el t 1 2 JD cle So be er ra h k k Ar th ha ob ee ee O ra le S ie ic Sa W W op M R Pe Michael Sarah Engineer © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 72
  • 73. oise Factors oise Factors Signal Factor Response Process // Procedure Process Procedure Control Factors © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 73
  • 74. Identify Inputs & Outputs Examples Different Engineers Tools Tools Tools Tools Different Servers Box plots Box plots C&E Matrix C&E Matrix Different Days Main Effects Plots Main Effects Plots FMEA FMEA Interaction Plots Interaction Plots Fishbone Fishbone oise Inputs oise Inputs A OVA A OVA Short-term Capability Short-term Capability Discrete Discrete T-Test T-Test Controlled Controlled Key Process Key Process Inputs Inputs Outputs Outputs Examples Process Process Temperature Cost Time oise Inputs oise Inputs Tools Tools Continuous Continuous Scatter plots Scatter plots Correlation Correlation Examples Regression Regression Data Center Temperature Data Center Location Relative Humidity © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 74
  • 75. Data Analysis – Become The Detective! Determine stability and Like pulling weeds… unless we address capability the root that causes the problem, poor results will keep coming back. Explore relationships among the variables Addressing the results or symptoms of a problem will never provide lasting Dissect the data solutions - given a little time… the Look for clues problem will come back Partition the total variability (by We need to understand the Root Cause of statement / variance component the problem from our problem statement analysis) Six Sigma Methodology provides Handle noisy data appropriately adequate tools to help understand, identify, analyze, and fix the root cause Answer important questions of the problem Is the process Stable? Investigative Techniques Is the Process capable of FMEA meeting specifications? Multi-Vari C&E, QFD, etc What are the major sources of variation due to noise? Analytical Tools A OVA F-test, t-test, Chi-Square, etc Correlation & Regression Analysis Improvement Tools Improvement Sustaining Tools © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 75
  • 76. Problem Solving - Forward Versus Backwards Define Problem Collect Problem Related Data Forward Analyze Data Problem Solving Determine Root Cause(s) Validate o Idea of Root Cause Determine what is unexplained Define Problem List Probable Root Causes Backwards Collect Supporting Data Problem Solving Validate Determine what is unexplained Strong Idea of Root Cause © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 76
  • 77. List Of “Vital Few” Xs and Critical Ys Collected X and Y data MSA C&E FMEA Multi-Vari Hypothesis testing t-test F-test ANOVA Chi-square Regression analysis and fitting List Of Probable Root Causes and key process sensitivities © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 77
  • 78. Evaluate Data to Determine Root Cause Descriptive Statistics I and MR Chart for Cust 2 Variable: Cust 1 29 UCL=28.29 Goal is to determine cause & effect relationships Individual Value 28 Anderson-Darling Normality Test 27 A-Squared: 0.285 26 P-Value: 0.598 25 Mean=25.30 Mean 25.2950 24 StDev 0.7999 Variance 0.639816 23 Skewness 0.148260 22 LCL=22.30 Kurtosis -6.8E-01 24.0 24.6 25.2 25.8 26.4 27.0 N 24 Subgroup 0 10 20 30 Minimum 24.0578 1st Quartile 24.6819 4 Median 25.2460 UCL=3.682 Moving Range 3rd Quartile 25.9781 Maximum 26.9851 3 95% Confidence Interval for Mu 95% Confidence Interval for Mu 2 24.9573 25.6328 25.0 25.5 26.0 95% Confidence Interval for Sigma 1 R=1.127 0.6217 1.1220 0 LCL=0 95% Confidence Interval for Median 95% Confidence Interval for Median 24.7960 25.9572 Normal Probability Plot Residual Model Diagnostics Normal Plot of Residuals I Chart of Residuals 200000 300000 UCL=270223 .999 200000 100000 Residual 100000 Residual .99 0 0 Mean=-1.9E-10 .95 -100000 -100000 Probability .80 -200000 -200000 LCL=-270223 -300000 .50 -2 -1 0 1 2 0 5 10 15 .20 Normal Score Observation Number .05 Histogram of Residuals Residuals vs. Fits 3 200000 .01 .001 100000 Frequency Residual 2 0 24 25 26 27 1 -100000 Cust 3 Average: 25.4407 Anderson-Darling Normality Test 0 -200000 StDev: 0.873640 A-Squared: 0.312 -200000 -150000-50000 50000 150000 -100000 -0 100000 200000 200000 400000 600000 8000001000000 N: 30 P-Value: 0.532 Residual Fit © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 78
  • 79. Summarize All Root Cause Analysis For each possible root cause, determine those you will verify. Summarize each possible root cause with the following codes: Non Contributor (NC) Does not contribute to the problem Possible Contributor (PC) A factor which may have an effect on the response Insufficient Data (ID) Not enough data to determine the effect of the factor (may require additional effort) Data not available (IDX) Data not available concerning the factor Root Cause (RC) Determined to be a root cause of the problem Non Controllable Root Cause (RCX) A root cause; however, outside the control of the company, individual or team © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 79
  • 80. Root Cause Hypothesis/Analysis Cycle Analyze Develop Data/ Casual Process Hypothesis Confirm & Select “Vital Few” Causes Analyze Refine or Data/ Reject Process Hypothesis © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 80
  • 81. Hypothesis Testing Concepts Allow for… 1. 1. Handle uncertainty properly Handle uncertainty properly 2. 2. Minimize subjectivity Minimize subjectivity 3. 3. Question assumptions Question assumptions 4. 4. Prevent the omission of Prevent the omission of important data important data 5. Manage the risk of decision 5. Manage the risk of decision errors errors X Data – Single X Discrete/Attribute Data Continuous Data Y Data – Single Y Attribute Data Chi-Square Logistic Regression Continuous Data ANOVA Means Regression / Medians Tests © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 81
  • 82. Analyze Roadmap - A OVA A OVA Means / Medians Tests Comparisons Comparisons Comparisons involving involving involving O E level to the X TWO levels to the X Three+ levels to the X Study Stability Study Stability Study Stability (if applicable) (if applicable) (if applicable) Study Shape Study Shape Study Shape Study Study Study Study Spread Spread OR Spread Centering Study Study Centering Centering © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 82
  • 83. A OVA Table Sum of Squares Mean Square There is a .823 chances In 1000 of getting an F Test this big This is Pooled Sigma Square, which is the sum of the square of each SD divided by 3 Source of Variation Degrees of Freedom Ho: Mean(Cust1) = Mean(Cust2) = Mean(Cust3) Square these and take Ha: Mean(Cust1) ≠ Mean(Cust2) ≠ Mean(Cust3) the average, then take the Square Root © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 83
  • 84. Correlation & Regression A measure of strength of association between two Regression quantitative, random variables that have been standardized Plan Your Study Standardization requires dividing the covariance by the products of Collect Your Data the sample standard deviations The covariance is a measure of Create Fitted Line the relationship between two Plot variables but it has not been Evaluate Significance standardized The Correlation Coefficient (r) Evaluate Residuals is calculated from the covariance of the two samples Make Decisions © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 84
  • 85. Regression Plot R² Regression Plot GPA = 1.10750 + 0.0025560 Verbal Equation for the S = 0.550719 R-Sq = 10.4 % R-Sq(adj) = 9.9 % line What 4 It gives us an decisions estimation of the would you process behavior make? 3 Fitted Line GPA 2 1 Distance between Actual Actual Point Point 0 and Line 400 500 600 700 800 Verbal © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 85
  • 86. Analytical Tools Progress Reporting I and MR Chart for Cust 1 Questions What tools were used? 28 UCL=28.06 Individual Value ANOVA 27 26 Chi-Square 25 Mean=25.30 24 Regression 23 LCL=22.53 22 Other Subgroup 0 5 10 15 20 25 How did you pick those tools? 4 What sample size did you use? UCL=3.396 Moving Range 3 Where did the data come from? 2 1 R=1.039 Which variables were important? 0 LCL=0 Statistically Practically Test for Equal Variances for Stack Normal Probability Plot Descriptive Statistics 95% Confidence Intervals for Sigmas Factor Levels Variable: Shot Distanc Cust 1 .999 .99 Anderson-Darling Normality Test Cust 2 .95 A-Squared: 0.363 P ro b ab ility P-Value: 0.419 0.65 0.75 0.85 0.95 1.05 1.15 1.25 1.35 .80 Mean 60.1760 .50 StDev 0.5940 F-Test Levene's Test Variance 0.352859 .20 Skewness -3.3E-01 Test Statistic: 0.865 Test Statistic: 0.320 Kurtosis -8.0E-01 P-Value : 0.699 P-Value : 0.574 .05 N 30 59.0 59.4 59.8 60.2 60.6 61.0 .01 Minimum 58.9900 .001 1st Quartile 59.6625 Boxplots of Raw Data Median 60.2050 3rd Quartile 60.6850 Cust 1 Maximum 61.0100 24 25 26 27 95% Confidence Interval for Mu 95% Confidence Interval for Mu Cust 1 Cust 2 Average: 25.2950 Anderson-Darling Normality Test 59.9542 60.3978 StDev: 0.799885 A-Squared: 0.285 59.9 60.0 60.1 60.2 60.3 60.4 60.5 95% Confidence Interval for Sigma N: 24 P-Value: 0.598 0.4731 0.7985 95% Confidence Interval for Median 95% Confidence Interval for Median 24 25 26 27 59.9800 60.5340 Stack © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 86
  • 87. What to Expect from the Analyze Phase A project team is in place and functioning with the BB effectively facilitating The team understands the business impact of the project The project is still scoped properly and can provide the benefits The relationship between process inputs and customer requirements has been investigated and confirmed. First pass of FMEA completed (Inputs – X’s – analyzed in more detail) Sources of variation (significant X’s) have possibly been identified or proven statistically to be linked with the Y’s under study Special causes of variation (low-hanging fruit) have been reduced/removed providing an accurate picture of the process Some Control Plans exist and have actions associated with them for improvement to cover obvious gaps. A clear plan to move to the IMPROVE phase exists, is realistic and reflects a more accurate financial impact statement © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 87
  • 88. Six Sigma DMAIC Improve Improve Improve Activities Develop Solution Alternatives Assess Risks and Benefits of Solution Alternatives Validate Solution using a Pilot Implement Solution Determine Solution Effectiveness using Data Improve Quality Tools Design of Experiments Brainstorming FMEA Risk assessment © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 88
  • 89. Six Sigma Improve Flow Brainstorm Potential Solutions, Costs, Risks and Benefits Design Experiments where appropriate Review and approve solutions with Management Test and Validate solutions Implement changes and determine improved process capability. Examine opportunities for standardization and translation © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 89
  • 90. Brainstorm Potential Solutions Brainstorm Identify the problem statement and brainstorm the categories in any tool Use general brainstorming techniques to Prioritize generate process and design change ideas Use polling to prioritize Separate ideas into short term and long term. problem causes Use voting and management involvement to generate consensus on direction of approach A single solution is not required at this Develop An Action Plan point in the improvement process. 2 - 3 short term solutions should be selected Circle the 3 most probable and ranked. 1 to 2 long term solutions should also be causes to develop an selected for evaluation and experimentation. action plan © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 90
  • 91. What Is an Experimental Design? A systematic series of tests in Trial and Error – Panic, which various in variables (X’s) Firefighting are directly manipulated and the effects on the Output Variables are One-Factor-at-a-Time observed (1FAT) To determine which X’s most Fractional Factorials affect the Y’s Full Factorials Influential X’s to center the Y on Response Surface Methods the target Influential X’s to minimize the Others variability of Y Influential X’s to minimize the presence of Noise Variables A well designed experiment eliminates all possible causes except the one that you are testing If an effect occurs on the KPOV, then it can be directly tied to the KPIV’s you have directly manipulated © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 91
  • 92. High Level Map Of Experiments Characterizing a Process Determine which X’s most affect the Y’s Screening Designs Fractional Factorials Screening Designs Includes controllable and uncontrollable X’s Identifies critical process and noise variables Identifies those variables that need to be carefully controlled in the process Provides direction for Characterization Studies Full Factorials Characterization Studies controlling inputs rather than control charting the Outputs Optimizing Process Determining where the critical inputs should be set Determining “real” specification limits Response Surface Optimization Studies Optimization Studies Product Design Methods Aids in understanding the X’s early in the design process Provides direction for “robust” design © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 92
  • 93. DOE Worksheet DOE W orksheet Date: _______________ Product: _______________ Ex pected Start: _____________ Expected Completion: ____________ Team Leader: ________________ Process(es): ______________ Team Members: Name: Org./Location _______________ _______________ _______________ _______________ _______________ _______________ Problem Statement (Business Problem): Business Opportunity/Implications : Ex perimental Objective: Ex perimental Hypothes is : Ho: Ha: List of Experiment Parameters Respons e 1: ________________ Type: Quantitative Qualitative Unit of Meausre:_____________ Bas eline Mean:________________ Target:__________________ Bas eline Std.Dev.:________________ Measurement System:___________ Min. Required Effect Siz e: _________ (δ/σ) %R&R:________ P/t:_________ Respons e 2: ________________ Type: Quantitative Qualitative Unit of Meausre:_____________ Bas eline Mean:________________ Target:__________________ Bas eline Std.Dev.:________________ Measurement System:___________ Min. Required Effect Siz e: _________ (δ/σ) %R&R:________ P/t:_________ Respons e 3: ________________ Type: Quantitative Qualitative Unit of Meausre:_____________ Bas eline Mean:________________ Target:__________________ Bas eline Std.Dev.:________________ Measurement System:___________ Min. Required Effect Siz e: _________ (δ/σ) %R&R:________ P/t:_________ © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 93
  • 94. Factorial Design Reduce Generate Model Proposal Stat>Power & Sample Determine Sample Size>2-Level Look at key Main Effects, Interactions, Cube and Residual Plots Size Factorial Design Graphs Setup / Run Stat>DOE>Create Look at Key ANOVA Tables Fractional Design P Values Experiment Data Run Stat>DOE>Analyze Determine Epsilon Square Factorial Design Practical Stat>ANOVA>Balanced Analysis ANOVA Significance Look at Key Effects Plots Validate and Paretos Graphs Develop Look at Key ANOVA Tables P Values Practical Your logic and creativity Data Solutions © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 94
  • 95. Evaluate And Discuss With Management Once the team has Identify potential impact (change to the baseline) of each solution. Explain how completed their work each solution will address the root cause it is now time to and impact real change in performance. Ensure solution costs and timelines are review solutions with acceptable to management Management. Determine the complexity of each solution in terms of time and ease of Allow the team to completion benefit from a fresh Financial benefit = benefit of solution – cost to implement perspective and add Assess the risks associated with each Management’s insight solution and the likelihood of occurrence and experience to the Determine need to involve/notify customer concerning any product or priorities. process changes. Follow all internal or external Change Management This step improves procedures. the alignment of Make sure that proper validation occurs Management to the associated with the solution prior to across the board implementation Teams efforts © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 95
  • 96. Leverage Lean Methods 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 - 96
  • 97. Reach the Improvement Goal?… If successful… congratulations… DMAIC process works!!! If not… examine why the solution failed. Often a minor modification of the solution stands between success and failure. Keep at it, examine other solution alternatives… Assure we truly understand root-cause and our solution was designed to address the right problem Reach the Improvement Assure our sample size was enough to measure the Goal? Yes! improvement correctly Allow sufficient time for a learning curve for any new process change prior to measuring improvement effectiveness Have we met the breakthrough target? Are there other solutions that need to be considered? Reach the Improvement Goal? o! © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 97
  • 98. Six Sigma DMAIC Control Control Control Activities Determine Needed Controls (measurement, design, etc.) Implement and Validate Controls Develop Transfer Plan Realize Benefits of Implementing Solution Close Project and Communicate Results Control Quality Tools Statistical Process Control (SPC) Out of Control Action Plan (OCAP) Design Changes to eliminate the defect © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 98
  • 99. Six Sigma Control Flow Based on Solution, Brainstorm appropriate controls to sustain the gains Select SPC controls where appropriate Review and approve control plan with Management Implement and validate controls Realize savings and determine final financial benefits and ROI Determine long term owner and close the project © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 99
  • 100. Select Appropriate Controls TYPES of CO TROLS Measurement Based Control Test & Inspection Management Dashboards & Review Test (error prone) Statistical Process Control Inspection (poor effectiveness and costly) Documentation Periodic Checks Process Flow Diagrams Scheduled Maintenance Product Drawings, Schematics Scheduled Calibration Process Management Plans Training and Operator Certification Written Procedures Audits, 5s Training Periodic Management Reviews Design Incentives Design out Product Problems Measures which are associated with a bonus Mistake Proofing Measures which are associated with a penalty Robust Design Concepts © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 100
  • 101. 10 Requirements For Effective Process Control 1. Clear product specifications 2. Effective metrology 3. Process characterization 4. Sampling plan 5. Control chart 6. Out of Control Action Plan (OCAP) 7. Process documentation 8. Operator and engineering training 9. Database 10.Routine line audits © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 101
  • 102. Define Sustaining Requirements What Vacuum will be created when you leave? Now that the solution is known and you are ready to finish the project…. Determine the activities that need to continue after the team is dissolved Define who is doing them now… who should be the long term owner? Determine who needs to do them in a sustaining long term mode Define the set of tasks or systems that must be installed prior to completing the project and backing out of the work What else will be needed to make the solution effective and sustainable? From the above issues, develop a transfer plan © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 102
  • 103. Close the Project Time To End? • Goals have been met • Problem has been eliminated and documentation complete • Data indicates improvement was achieved • Thank all those that participated, complement good support and copy all relevant management • Communicate ROI • Formally close the activity • Assure a long term owner is in place for all key process components • Maintain monitors of performance © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 103
  • 104. Thank You Section V Dr. Kamal Kakish Cobam, Inc. (248) 703-6882 Q & A Session profkakish@gmail.com For a Black Belt, Green Belt, or Champion Course Outline, please contact us © 2002 – 2008 by Cobam, Inc. All rights reserved Six Sigma Executive Overview - 104