Introduction to Six Sigma
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Introduction to Six Sigma Introduction to Six Sigma Presentation Transcript

  • www.ketch.ca Introduction to Six Sigma Applying Statistical Analysis to Business Issues
  • www.ketch.ca Objectives • Understand Six Sigma • Gain a high-level understanding of the tools methods and application of Six Sigma • Learn the basic vocabulary of Six Sigma • Understand the roles and responsibilities of Six Sigma practitioners • Identify the benefits of Six Sigma as a business improvement methodology
  • www.ketch.ca Agenda • Introduction • Methodology • Roles and Responsibilities • Why Six Sigma • How to Implement Six Sigma
  • www.ketch.ca Introduction • What Six Sigma means • What Six Sigma is • The concept of variation • Performance and defects
  • www.ketch.ca What Six Sigma Means “Past definitions of quality focused on conformance to standards, as companies strived to create products and services that fell within certain specification limits.” -Mikel Harry and Richard Schroeder
  • www.ketch.ca What Six Sigma Means “...this Six Sigma journey will change the paradigm from fixing products so they are perfect to fixing processes so that they produce nothing but perfection, or close to it.” - Jack Welch
  • www.ketch.ca What Six Sigma is Goal Metric Benchmark Philosophy Value Vision Method Symbol Tool
  • www.ketch.ca The Concept of Variation Variety may be the spice of life but, for customers, consistency is King!
  • www.ketch.ca The Concept of Variation Every repeatable process exhibits variation Every repeatable process exhibits variation
  • www.ketch.ca Measuring Variation X We measure variation using standard deviation σ) We measure variation using standard deviation ((σ)
  • www.ketch.ca Performance and defects LSL USL Defects Defects X Reducing Variability Is The Essence of Six Sigma Reducing Variability Is The Essence of Six Sigma
  • www.ketch.ca Performance and Yield Defects per σ Defects per σ Million Million opportunities opportunities Yield Yield 2 308,537 69.20% 3 66,807 93.32% 4 6,210 99.38% 5 233 99.98% 6 3.4 99.99% 3σ to 6σ − 20,000 X Improvement...A True Quantum Leap 3σ to 6σ − 20,000 X Improvement...A True Quantum Leap
  • www.ketch.ca Performance in Context 99% Good (3.8 Sigma) 99.99966% Good (6 Sigma) • 20,000 lost articles of mail per • Seven articles lost per hour hour • Unsafe drinking water for • One unsafe minute every almost 15 minutes each day seven months • 5,000 incorrect surgical • 1.7 incorrect operations per operations per week week • 340 Passengers with Misplaced • 6 Passengers with Misplaced Luggage every day luggage each month • 200,000 wrong drug • 68 wrong prescriptions per prescriptions each year year
  • www.ketch.ca Methodologies • Two distinctly different methodologies • DMAIC • DMADV –Define –Define –Measure –Measure –Analyze –Analyze –Improve –Design –Control –Verify When a process needs to When a process needs to be improved be invented (aka. DFSS-Designed For Six Sigma)
  • www.ketch.ca The Improvement Methodology
  • www.ketch.ca Define Define Define Measure Measure Analyze Analyze Improve Improve Control Control Deliverables 1. Identify customer wants 2. Project charter 3. High-level process map
  • www.ketch.ca Define Define Identify Customer Wants • Who are your customers? – Internal vs. external customers • Collect VOC-Voice Of Customer data – Interviews – Surveys – Complaints – Focus groups • Define CTQs-Critical To Quality measures – How does the customer judge your product or service?
  • www.ketch.ca Define Define Project Charter • Project scope • Business case • Cost benefit • Roles & responsibilities • Milestones • Deliverables
  • www.ketch.ca Define Define High-level Process Map PROCESS SIPOC / COPIS INPUTS OUTPUTS 1) Part Request 1) Part Usage 2) Physical Inventory 2) Inventory 3) Call Transfers 3) Credit/Debit to P&L 4) Parts 4) Part 5) Customer/Equipment 5) data Fulfill & Receive Use / Part Required for Create Part Action Part Ship Part to Part Removed Part into Consume a Service Call Request Request Vendor / from WIP WIP Part NPC SUPPLIERS CUSTOMERS 1) Technicians 2) Buyers 1) Finance 3) NPC 2) Technicians 3) Buyers 4) Refurb 4) NPC 5) Vendors 5) Vendors 6) NSC
  • www.ketch.ca Measure Define Define Measure Measure Analyze Analyze Improve Improve Control Control Deliverables 1. Identify CTQ characteristic 2. Collect data 3. Calculate sigma
  • www.ketch.ca Measure Measure Identify CTQ Characteristic • Getting down to the thing that the project will target using tools like: – Detailed process mapping – QFD-Quality Functional Deployment – Cause & effect analysis – FMEA-Failure Modes & Effects Analysis
  • www.ketch.ca Measure Measure Identify CTQ Characteristic Consumable Dispose of part, part out of WIP Some Technicains Some Technicians Some Technicians update part receipt update part usage update part receipt through Antennea Non- (A) NPC/branch Return to NPC/ Consumable logistics fulfill part branch logistics GE owned from WIP SomeTechnicains Page 1 Technician Yes call NSC to have Was part used? Performs service part receipt updated Technician holds X-ship? part - Part still in No WIP Some Technicians Part received by continue on call NPC/branch Return part? Yes W/O updating part logistics receipt (A) Return part direct to Ship part to NPC/ No vendor branch logistics Technician holds part - Intransit / Open P/O Physically ship part Technicain advises Part received by w/ no update, P/E or Logistics of NPC/branch part still in WIP part return logistics Detailed Process Mapping P/E or logistics fulfill part from WIP
  • www.ketch.ca Measure Measure Identify CTQ Characteristic Quality Functional Deployment (QFD) http://www.npd- solutions.com
  • www.ketch.ca Measure Measure Identify CTQ Characteristic Cause & Effect Analysis, or Fishbone, or Ishikawa diagram
  • www.ketch.ca Measure Measure Identify CTQ Characteristic S ys t e m Design Verification Process Potential F M EA N um be r Project III S u b s ys t e m Failure Mode and Effects Analysis P re p a re d B y Houston Mayer C o m po ne nt (Design FMEA) F M EA D a te 22/10/1999 D e s ig n Le a d Houston Mayer Ke y D a t e R e v is io n D a t e 21/08/2000 C o re T e a m See Project III R1 Report P age 1 of 6 A c t io n R e s u lt s P o t e n t ia l P R e s p o n s ib ilit y & P o t e n t ia l S D R P o t e n t ia l C a us e (s )/ r C u rre n t D e s ig n R e c o m m e nde d T a rg e t It e m / F u n c t io n Effe c t(s ) e e P A c t io n s T a k e n F a ilu re M o d e ( s ) M e c h a n is m ( s ) o C o n t ro ls A c t io n ( s ) C o m p le t io n o f F a ilu re v t N o f F a ilu re b D a te Customer System, Customer 7 Human error 1 Design 3 21 Use Closed sends in a Softw are, needs not fully configuration configuration 10/21/99 quote request Integration met by tool. tool w hen for product. and Shipping delivered available. requirements system. overlooked by Requirement Data entry System 3 Human error 1 Order verified 3 9 Continue order Closed entered and error compatability by a verification by 10/21/99 verified by requirements configuration configuration Inside Sales in not evaluated tool. tool. config. tool. by config. tool. Sales Specific On time 7 Requirements 3 Customer 3 63 P ublish Jun-00 Customer identifies need packing, delivery and Overlooked. Inspection comprehensive shipping for CII or SHC labeling and integraty of Instruction/ procedure for requirements shipping the product Special the 1st Article review ed by requirements may be Handling P rocess. quality may not be compramised Codes P rocess assurance in FMEA-Failure Modes & Effects Analysis
  • www.ketch.ca Measure Measure Collect Data • Create a data collection plan • Perform a MSA – Measurement Systems Analysis • Gage R & R • Attribute R & R • Test re-test study • Collect data
  • www.ketch.ca Measure Measure Calculating Sigma • Calculate process capability X – Short term (ZST=σST) – Long term (ZLT=σLT) – The 1.5 Shift LSL USL Defects Defects
  • www.ketch.ca Analyze Define Define Measure Measure Analyze Analyze Improve Improve Control Control Deliverables 1. Identify possible causes 2. Narrow down to root cause 3. Confirm the benefit
  • www.ketch.ca Analyze Analyze Identify Possible Causes • Identify sources of variation using: – Process map analysis – Graphical analysis – Brainstorming
  • www.ketch.ca Analyze Analyze Narrow To Root Causes Regression Plot • Confirm Y = 1026.02 + 98.0500X statistically R-Sq = 87.9 % significant factors through: – Hypothesis testing – DOE-Design Of Experiment P value = 0.000
  • www.ketch.ca Analyze Analyze Confirm The Benefit • Ensure that the effort needed to rectify the issues identified are financially feasible – Basic ROI-Return On Investment or cost benefit analysis
  • www.ketch.ca Improve Define Define Measure Measure Analyze Analyze Improve Improve Control Control Deliverables 1. Generate and select solution 2. Implement solution 3. Confirm results
  • www.ketch.ca Improve Improve Generate & Select Solution • Solution Pugh Matrix generation Concept Selection Legend Solution Alternatives Benchmark Option Importance Rating Better + through Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5 Same S Worse - structured Key Criteria brainstorming Criteria 1 Criteria 2 4 2 S + S - S + + + + - + - Criteria 3 3 - + - + S S • Solution Criteria 4 Criteria 5 2 5 + S + + - + S - S S + S Selection based Criteria 6 Criteria 7 10 6 + - + - + - + - + - + - upon viability Criteria 8 Sum of Positives 8 S 3 S 2 S 3 S 5 S 3 S 3 and trade-offs Sum of Negatives Sum of Sames 2 3 3 3 2 3 1 2 3 2 2 3 Weighted Sum of Positives 16 13 16 21 17 14 Weighted Sum of Negatives 9 13 9 6 12 10 Totals 7 0 7 15 5 4
  • www.ketch.ca Improve Improve Implement Solution • Comprehensive pilot planning – Detailed process maps – SOP-Standard Operating Procedures – Monitoring plans – Contingency planning – Risk management plan
  • www.ketch.ca Improve Improve Confirm Results • Ensure that an improvement has been made and is consistent with expectations – Learn and adapt – Re-assess measurement systems – Adjust improvements as required – Re-calculate sigma – Confirm improvement is statistically significant
  • www.ketch.ca Control Define Define Measure Measure Analyze Analyze Improve Improve Control Control Deliverables 1. Standardization and documentation 2. Process monitoring and control 3. Closing the project
  • www.ketch.ca Control Control Standardize and Document • Rollout confirmed solution across business with updated information from pilot – Detailed process maps – SOP-Standard Operating Procedures – Monitoring plans – Contingency planning – Risk management plan
  • www.ketch.ca Control Control Monitoring and Control • Ensure project I and MR Chart for Days x’s and y’s 60 UCL=53.62 remain in 50 Individual Value 66 40 statistical 30 222 22 Mean=34.19 control 20 LCL=14.77 10 – SPC- Subgroup 0 10 20 30 40 50 60 70 Statistical 40 1 Process Moving Range 30 1 1 1 1 Control 20 UCL=23.86 10 R=7.303 2 0 LCL=0 2 2
  • www.ketch.ca Control Control Close the Project • Complete project documentation • Complete project sign-off • Handoff documentation to process owner • Celebrate!
  • www.ketch.ca Roles and Responsibilities Champions Master Black Belts Quality Leader & BQC Green Belts Black Belts
  • www.ketch.ca Champions & Master Black Belts Champions Master Black Belts •Create the vision of Six Sigma •Understand the big business picture •Define the path to implement Six Sigma •Develop and deliver training to across the organization various levels of the organization •Carefully select high-impact projects •Assist in the identification of •Develop a comprehensive training plan projects for implementing the Six Sigma strategy •Coach and support Black Belts in •Ask Black Belts and Green Belts many project work questions to ensure that they are properly •Participate in project reviews to offer focused technical expertise •Make sure that project opportunities are •Take on leadership of major acted upon by organization’s leadership programs and the finance department •Facilitate sharing of best practices •Recognize people for their efforts across the corporation
  • www.ketch.ca Black Belts & Green Belts Black Belts Green Belts •Act as Six Sigma experts •Function as Green Belts on a •Lead and direct teams in project part-time basis execution •Participate on Black Belt •Coach and Mentor Green Belts projects as content experts •Ensure that the results are •Lead Green Belt projects sustained •Identify potential Six Sigma •Identify potential barriers to projects project completion •Report progress of both BB and GB projects to appropriate leadership
  • www.ketch.ca Return on Investment • In 2000 GE’s gross annual benefit was $6.6 billion. • CEO Larry Bossidy brought AlliedSignal back from the verge of bankruptcy. Cumulative benefits $2 billion in direct savings • Raytheon improved its cost of doing business by more than $1 billion annually in 2001. • Average financial benefit per project $120,000 • Motorola claims a Six Sigma ROI of between 10:1 & 50:1
  • www.ketch.ca Performance Improvements • Increased profits • Decreased operating costs • Improved customer satisfaction • Decreased cycle-time in processes • Increased employee morale
  • www.ketch.ca How To Implement Six Sigma • Factors for success – Leadership – Communication – Rewards & recognition – Training – Launching the initiative – Implementation – Sustaining the effort and return
  • www.ketch.ca Leadership Buy-in • Clear, unwavering direction on deploying Six Sigma • Development of a strategy for deployment • Personal involvement • Willingness to revise company policies and procedures to be supportive • Insistence on tangible results
  • www.ketch.ca Communication • Clear and precise communication when launching the initiative • Frequent updates on initiative status • Consistent communication plan
  • www.ketch.ca Rewards and Recognition • Rewarding Green Belts for project completion • Recognizing team members for working on projects • Recognizing major milestones in project progress
  • www.ketch.ca Training Black Belt Champion Green Belt Awareness
  • www.ketch.ca Launching the Initiative 1. Set vision and goals for Six Sigma initiative 2. Develop deployment plan 3. Develop clear implementation plan 4. Develop Six Sigma budget 5. Train Champions and BQC members 6. Select Green Belts for first round of training 7. Select Six Sigma Leader
  • www.ketch.ca Implementation 1. Select first round of projects 2. Develop reward and recognition strategy 3. Train Green Belts 4. Develop project review system 5. Identify potential Black Belts within the organization
  • www.ketch.ca Continue Momentum • Well defined training strategy • Monitoring system to ensure gains are sustained • Management review of Initiative • Continue to have projects ready to start • Recruit and train Black Belts
  • www.ketch.ca Sustaining the Return • Continue to budget for Six Sigma • Constant communication strategy • Continuous training and improvement
  • www.ketch.ca Information Sources Six Sigma Software
  • www.ketch.ca