• Like
  • Save
An Introduction To Six Sigma
Upcoming SlideShare
Loading in...5
×
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
8,265
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
0
Comments
0
Likes
9

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. An Introduction to Six Sigma Presented to SISQA – Boise, Idaho September 19, 2006 Brian Bulow Six Sigma Greenbelt, CSTE bri_b@hotmail.com
  • 2. Agenda What is Six Sigma? - Definition - The Bell Curve - Example and Sigma calculation Six Sigma process - DMAIC - The 12 Step Process Six Sigma Tools - Some examples The people in Six Sigma - Roles - Cultural aspects Q&A 2
  • 3. What is Six Sigma? - Definition l Is it some Greek Fraternity thing? $ 3
  • 4. What is Six Sigma? - Definition Is it the revenge of your Calculus and Stats Professors? there’ I TOLD you there’d be a use for this stuff in real life!! 4
  • 5. What is Six Sigma? - Definition A statistical measure of variation. Six Sigma is no more than 3.4 Defects Per Million Opportunities (DPMO). This equates to an accuracy level of 99.9997%. A process with a variation measurement of Six Sigma has a high level of control and a low level of variation and defects. A “tool box” of processes and measurement tools for refining and improving business processes. A way to improve your customers relationship and therefore increase profits. “At the Customer, for the Customer” Done properly, Six Sigma is the culture within a company, supported from the very top, that drives behavior and decisions. It is “the way we work”. Six Sigma is data driven decision making. 5
  • 6. What is Six Sigma? - Definition Six Sigma speaks the language of business. It’s primary goal is to make the business as profitable as possible. Period. In Six Sigma, quality is not pursued independently from business goals. Time and resources are not spent improving something that is not a lever for improving customer satisfaction…and profit. Six Sigma focuses on achieving tangible results. Savings from Six Sigma projects often show directly in the bottom line…and the year end financial report. Six Sigma uses an infrastructure of highly trained employees from many (or all) areas of the company (not just the Quality Department). These employees are empowered to be internal Change Agents. Six Sigma raises the goal from 3 Sigma performance (99.73% accuracy) to 6 Sigma (99.9997% accuracy). 6
  • 7. What is Six Sigma? - Definition Sigma is a reference to the level of 99.7 % Good 99.99966% Good variation (and therefore quality) produced 3.8 Sigma 6 Sigma within a process. Most companies believe 20,000 lost articles of 7 lost articles per hour that 99.7% good quality would be a terrific mail per hour achievement, however consider what Unsafe drinking water for Unsafe water for 1 99.7% (3.8 sigma) quality would mean in 15 minutes each day minutes every seven everyday life. The left column lists months processes performing at about Three Sigma. 5,000 incorrect surgical 1.7 incorrect surgeries operations per week per week The column on the right lists processes 340 airline passengers 6 passengers with lost performing at a “World Class” level - with lost luggage per day luggage each month 99.99966% good quality. From a statistical point of view, these processes 200,000 incorrect drug 68 incorrect drug are at Six Sigma quality - no more than prescriptions per year prescriptions per year 3.4 defects per million opportunities (parts or process cycles). 7
  • 8. What is Six Sigma? - Definition “Past definitions of Quality focused on conformance to standards [or requirements and design in the case of software], as companies strived to create products and services which fell within certain specification limits” – Mikel Harry, Richard Schroeder “Six Sigma changes 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 8
  • 9. What is Six Sigma? – The Bell Curve The term Six Sigma , also written as 6σ, using the lower case letter for sigma, refers to the number of standard deviations away from the mean (or average) point of a bell curve (a.k.a “Normal Distribution”) The bell curve is a natural phenomenon experienced in large populations of almost anything. Consider a large field of corn. If 1 million randomly ears are picked, measured, and plotted, a normal distribution curve similar to that above will result. Most ears will be centered about the mean (average) of the population. A few ears will be moderately large while even fewer will be very large. The same occurs at the other end of the scale. There will be a moderate number of ears smaller than the mean and even a smaller number of very small ears of corn. Of 1 million randomly picked ears of corn, only 3 or 4 ears will qualify in the very large category (six sigma from the mean). The same is true for the opposite side of the bell curve where we will find only 3 or 4 ears of very small corn (again, six sigma from the mean). 9
  • 10. What is Six Sigma? – Example Problem Statement: Customers of our retail stores are unhappy with the time it takes to checkout. Total completed trips per minute ……..….… ……….… ……….… ………. …… ….. ….. … … ... .. .. .. . . 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Time to Complete Checkout (minutes) Data gathered by direct observation of 1000 checkout lane transactions (trips) at one specific store gave us an initial view of our Normal Distribution and Process Variation. You will note that once plotted, our data created a normal distribution, or bell curve. So we know what our current performance is…but what do our shoppers desire… and what can we afford to deliver? 10
  • 11. What is Six Sigma? – Example Voice of the Customer (VOC): - Shoppers desire completing a checkout trip in less than 12 minutes. Doing so in 7 minutes will delight them. - Store Mgt cannot profitably afford checkout resources to complete checkout trips in less than 5 minutes. Our Upper Specification Limit (USL) is 12 minutes. Our Lower Specification Limit (LSL) is 5 minutes Mean LSL USL Total completed trips per minute ……..….… 50 Defects: ……….… ……….… Non-Value add 90 Defects: additional Shopper operating cost Dissatisfaction ………. …… ….. ….. … … ... .. .. .. . . 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Time to Complete Checkout (minutes) Our Mean (or average) trip time is 9 minutes which sounds good on it’s own, but the mean alone does not reflect the entire Customer experience. The variation and extremes of our process are what our customers feel and remember! Defects are any data points outside our LSL and USL. We see 90 defects beyond USL and 50 defects beyond LSL for a total of 140 defects (shaded is red). These defects are the result of process variance. 11 . NOTE: Each “ ” equals 10 data points
  • 12. What is Six Sigma? – Example Calculating our Sigma level We open up our handy-dandy Sigma Level Calculator and Sigma Table to compute our Sigma level! (Admit it, you were scared we’d get into Stats and Calculus!) Mean LSL USL Total completed trips per minute ……..….… ……….… ……….… ………. …… ….. ….. … … ... .. .. .. . . 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Time to Complete Checkout (minutes) Our current Sigma level = 2.6 Sigma which is lower than the 3.8 Sigma level average of all business processes. We have work to do! What is the simplest approach to improving this situation? 12
  • 13. What is Six Sigma? – Example Process Entitlement We visit several other stores and gather data checkout process. Most stores reflect the data we’ve seen already, but the data from one store shows that we are meeting VOC already! This is Process Entitlement and is one of the most important concepts in process improvement. It is defined as the best performance that you can reasonably expect to get from a current process. We launch a Six Sigma project using Six Sigma tools to discover what this store is doing right, then leverage those improvements company wide and continuously monitor the results. We need to include store personnel in our Six Sigma project! Target LSL Mean USL Current Total completed trips per minute Mean ……..….… ……….… ……….… ………. Perf Shift …… ….. ….. … … ... .. .. .. . . 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Time to Complete Checkout (minutes) Graph scale not precise (close enough for example!). Data inside the green colored distribution would be properly dispersed with USL and LSL and tail points of curve 13
  • 14. What is Six Sigma? Y = f(x) X1 How Y=f(x) Relates To A Process X2 Customer’s Process Y Needs and X3 Expectations Xn X, Process Input Y, Process Output Variables Variables (PIV) (POV) Control the process INPUTS to achieve the desired OUTPUTS that satisfy our customers’ expectations. 14
  • 15. Six Sigma Processes DMAIC and DMADV The primary objective of any Six Sigma Program is the implementation of a data-driven measurement system focused on driving out variation and defects while maximizing profit and customer satisfaction. Typically this happens via two Six sigma processes; DMAIC and DMADV. The DMAIC process consists of 5 steps, “Define, Measure, Analyze, Improve, Control”, which focus on improving existing processes or products. DMAIC attempts to find cost savings, defect reduction, and improvements in what we are already doing today. DMAIC is much more prevalent process in Six Sigma, being used approximately 80% of the time. The DMADV process also consists of 5 steps, “Design, Measure, Analyze, Design, Verify”, (also known as Design For Six Sigma or DFSS) and focuses on building defect prevention into new processes. DMADV attempts to ensure that as we create new processes or products we implement at Six Sigma level quality, or as close to that goal as possible. 15
  • 16. Six Sigma Processes - DMAIC The DMAIC Process is cyclical with each step required to ensure the best possible results; Define the Customer, their Critical to Quality (CTQ) issues, and the Core Business Process involved. • Define who your customers are, what their requirements are for products and services, and what their expectations are • Define project boundaries - the stop and start of the process • Define the process to be improved by mapping the process flow Measure the performance of the Core Business Process involved. • Develop a data collection plan for the process • Collect data from many sources to determine types of defects and metrics • Compare to customer survey results to determine shortfall Analyze the data collected and process map to determine root causes of defects and opportunities for improvement. • Identify gaps between current performance and goal performance • Prioritize opportunities to improve • Identify sources of variation Improve the target process by designing creative solutions to fix and prevent problems. • Create innovate solutions using technology and discipline • Develop and deploy implementation plan Control the improvements to keep the process on the new course. • Prevent reverting back to the "old way" • Require the development, documentation and implementation of an ongoing monitoring plan • Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives) From GE's DMAIC Approach, http://www.ge.com/capital/vendor/dmaic.htm 16
  • 17. Six Sigma Processes - DMADV The first three steps of DMADV are very similar to DMAIC. The last two steps differentiate DMADV; Define the Customer, their Critical to Quality (CTQ) issues, and the Core Business Process involved. • Define who your customers are, what their requirements are for products and services, and what their expectations are • Define project boundaries - the stop and start of the process • Define the process to be improved by mapping the process flow Measure the performance of the Core Business Process involved. • Develop a data collection plan for the process • Collect data from many sources to determine types of defects and metrics • Compare to customer survey results to determine shortfall Analyze the data collected and process map to determine root causes of defects and opportunities for improvement. • Identify gaps between current performance and goal performance • Prioritize opportunities to improve • Identify sources of variation Design the new process or product. • Design a new process/product that meets specification and reaches Six Sigma level quality, thus preventing defects at Design. • This phase may require simulation. Validate the proposed process/product will meet expected quality. • Verify, by simulation or otherwise, the performance of thus developed design and its ability to meet the target needs • Setup prototype Production runs, validate new process/product quality level. • Properly hand off process/product to permanent owners. • Ensure Control (see DMAIC) is in place. • Require the development, documentation and implementation of an ongoing monitoring plan • Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives) 17
  • 18. Six Sigma Tools Six Sigma Project Charter When embarking upon a Six Sigma project you should be aware of the importance of establishing a communication plan and developing and validating a team charter. An otherwise excellent project can go awry if scope, communication and goals are not clearly understood from the beginning. Typically, team charters include such deliverables as a business case, problem and goal statements, scope, milestones, and roles. 18
  • 19. Six Sigma Tools Six Sigma Control Chart A Control Chart is used to detect and verify process variation. Unusual variation will show as a “spike” in the chart and is typically attributed to “special cause” factors. Control Charts also show “common cause” variation factors which occur often and for no apparent reason. Common cause variations are low hanging fruit for Six Sigma projects. Control Charts show 3 lines; A center line (typically the process mean) and the USL and LSL of the process. 19
  • 20. Six Sigma Tools Six Sigma Control Chart Here is an example of a Control Chart showing a data spike, representing a part of the process that is beyond control limits. Investigation as to the cause would be in order. Caution: Data spikes can occur for multiple reasons. Be sure to thoroughly investigate before deciding upon any course of action. You don’t want to “fix” something that isn’t broken!! 20
  • 21. Six Sigma Tools Six Sigma Cause and Effect Diagram (Fishbone or Ishikawa Diagram) 21
  • 22. Six Sigma Tools Six Sigma Cost of Quality Diagram 22
  • 23. Six Sigma Tools Six Sigma Quality Function Deployment (QFD) Quality Function Deployment (QFD) is a systematic process for motivating a business to focus on its customers. It is used by cross-functional teams to identify and resolve issues involved in providing products, processes, services and strategies which will more than satisfy their customers. A prerequisite to QFD is Market Research. This is the process of understanding what the customer wants, how important these benefits are, and how well different providers of products that address these benefits are perceived to perform. This is a prerequisite to QFD because it is impossible to consistently provide products which will attract customers unless you have a very good understanding of what they want. When completed it resembles a house structure and is often referred to as the “House of Quality”. The House is divided into several rooms. Typically you have customer requirements, design considerations and design alternatives in a 3 dimensional matrix to which you can assign weighted scores based on market research information collected. Quality Function Deployment (QFD) is a methodology for taking the Voice of the Customer and using that information to drive aspects of product development. (Example on following page) 23
  • 24. Six Sigma Tools Six Sigma Quality Function Deployment (QFD) 24
  • 25. Tools, Terms Six Sigma Pareto Chart 25
  • 26. The People in Six Sigma Six Sigma identifies five key role for success . Executive Leadership includes CEO and other key top management team members. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. Champions are responsible for the Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from the upper management. Champions also act as mentor to Black Belts. Typically called "Quality Leader". Master Black Belts, identified by champions, act as in-house expert coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from the usual rigor of statistics, their time is spent on ensuring integrated deployment of Six Sigma across various functions and departments. Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts and support them in achieving the overall results. According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. 26
  • 27. People in Six Sigma My personal experience… At GE, all employees required to be Greenbelt certified within 12 mos of hire Rigorous training and mentoring program Average 3 to 6 GB projects per year Speak, eat, sleep Six Sigma – the culture Data driven decisions the norm Six Sigma knowledge and prior projects considered during promotion decision Enlightening and empowering when done in the right culture 27
  • 28. People in Six Sigma Long- Long-Term Leadership commitment is crucial to success and avoids “quality month” flavor of the month” syndrome. www.6- www.6-sigma.com - Snapshot dated Sept 18, 2006 28
  • 29. People in Six Sigma www.6- www.6-sigma.com - Snapshot dated Sept 18, 2006 29
  • 30. People In Six Sigma It’s not easy and it’s not for the timid! Adoption requires culture change in order to be affective. Top Mgt MUST live, speak, and breath Six Sigma. Six sigma is about using data to get the right answer, not necessarily the most politically correct one. Short term success is typical. Long term success is more difficult and requires major commitment of the entire company. …but it is worth the effort!! 30
  • 31. Thanks! THANKS for listening! It was a pleasure speaking to SISQA. I hope you learned a few things and are ready to earn your Greenbelt! Questions? Discussion? 31