Six Sigma Overview

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In today's competitive environment, organizations must delight their customers and relentlessly look for new ways to exceed their expectations. To accomplish this, Six Sigma Quality has to become a part of an organization's culture. Six Sigma provides a rigorous and structured approach to help organizations improve their performance in meeting their customers' requirements.

This training presentation introduces you to the Six Sigma philosophy, methodology and tools and the infrastructure for successful Six Sigma deployment without too much of statistical jargon. It includes applications of Six Sigma in manufacturing, process and service industries, step-by-step DMAIC improvement approach, phase description and deliverables, and roles of the Leadership team, Champion, Process Owner, Black Belt and Green Belt.

CONTENTS:
Overview of Six Sigma
Key Concepts of Six Sigma
Applications of Six Sigma in Industries
Six Sigma DMAIC Methodology
Six Sigma Toolkit
Organizing for Six Sigma
Project Selection and Management
Critical Success Factors

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Six Sigma Overview

  1. 1. 1© Operational Excellence Consulting. All rights reserved.
  2. 2. 4© Operational Excellence Consulting. All rights reserved. Program Outline • Overview of Six Sigma • Key Concepts of Six Sigma • Applications of Six Sigma in Industries • Six Sigma DMAIC Methodology • Six Sigma Toolkit • Organizing for Six Sigma • Project Selection and Management • Critical Success Factors This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  3. 3. 7© Operational Excellence Consulting. All rights reserved. What is Six Sigma? • It is a methodology for continuous improvement • It is a methodology for creating products/ processes that perform at high standards • It is a set of statistical and other quality tools arranged in unique way • It is a way of knowing where you are and where you could be! • It is a Quality philosophy and a management technique This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  4. 4. 10© Operational Excellence Consulting. All rights reserved. Origin of Six Sigma • Six Sigma was developed by Motorola in 1987 Raised quality standards • GE adopted Six Sigma in 1995 • Other companies have adopted Six Sigma since its inception AlliedSignal, Siebel, Bombardier, Lockheed Martin, Kodak, Sony, Nokia, Siemens, BBA, Seagate, Compaq, Toshiba, AmEx...This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  5. 5. 13© Operational Excellence Consulting. All rights reserved. Quality engineering and administration Inspection/test (materials, equipment, labor) Expediting Scrap Rework Rejects Warranty claims Maintenance and service Cost to customer Excess inventory Additional labor hours Longer cycle times Quality audits Vendor control Lost customer loyalty Improvement program costs Process control Opportunity cost if sales greater than plant capacity We See Only the Tip of the Iceberg Poor quality costs a typical company 15-20% of sales annually Less Visible Visible This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  6. 6. 16© Operational Excellence Consulting. All rights reserved. What does Six Sigma in manufacturing and process industries look like? Automotive •Production •Inventory management Aerospace •Engine overhaul •Spare parts Application Common Issues Typical Solutions •Equipment downtime •Rework and re- inspection •Inventory costs •Turnaround time •Obsolescence costs •Repairs and maintenance •Elimination of defects •Inventory optimization •Process streamlining •Standardized operating procedures •Spare parts management Process • Materials management • Asset management •Material wastages •Equipment availability •Elimination of defects •Reduction of unplanned downtime Source: Operational Excellence Consulting Research This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  7. 7. 19© Operational Excellence Consulting. All rights reserved. Lean & Six Sigma • Lean improves the “flow” by eliminating waste • Six Sigma improves the process by reducing variation Combining Lean with Six Sigma results in smooth and steady flow This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  8. 8. 22© Operational Excellence Consulting. All rights reserved. Breakthrough Thinking Needed “The problems that exist in the world cannot be solved by the level of thinking that created them.” - Albert Einstein This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  9. 9. 25© Operational Excellence Consulting. All rights reserved. Key Concepts of Six Sigma • Critical to Quality: Attributes most important to the customer • Defect: Failing to deliver what the customer wants • Process Capability: What your process can deliver • Variation: What the customer sees and feels • Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels • Design for Six Sigma: Designing to meet customer needs and process capability This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  10. 10. 28© Operational Excellence Consulting. All rights reserved. Variability affects your costs and your customers’ experience Understanding the nature of process variation is critical since customers feel the effects of process variation as well as the process average Unhappy Customer Excess Cost USLLSL This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  11. 11. 31© Operational Excellence Consulting. All rights reserved. Focus of Six Sigma Focus on the x-y relationship • y • Dependent • Output • Effect • Symptom • Monitor • x1 . . . xN • Independent • Input - Process • Cause • Problem • Control Process/Product Output (y) is a Function of Process Input Variables (x’s) Capability = y = f (Variation) f(x) This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  12. 12. 34© Operational Excellence Consulting. All rights reserved. Is 99% (3.8σ) good enough? 99.99967% Good – At 6σ 20,000 lost mails per hour 7 lost mails per hour Unsafe drinking water almost 15 minutes each day One minute of unsafe drinking water every seven months 5,000 incorrect surgical operations per week 1.7 incorrect surgical operations per week 2 short or long landings at most major airports daily One short or long landing at major airports every five years 200,000 wrong drug prescriptions each year 68 wrong drug prescriptions each year Source: Example quoted from GE Book of Knowledge - copyright GE Real World: What is Sigma Performance? This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  13. 13. 37© Operational Excellence Consulting. All rights reserved. CTQ is any product or service characteristic that satisfies a key customer requirement or process requirement Critical To Quality (CTQ) This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  14. 14. 40© Operational Excellence Consulting. All rights reserved. CTQ Tree – Example Delivery of Pizza 1st Level (Need) 3rd Level (CTQs)2nd Level (Drivers) Types of Pizza/ Toppings Quality Speed How Warm Looks Taste Delivery Speed Variety This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  15. 15. 43© Operational Excellence Consulting. All rights reserved. Six Sigma Improvement Frameworks • DMAIC Define - Measure - Analyze - Improve - Control Use it to improve an existing process • DMADV (or DFSS*) Define - Measure - Analyze - Design - Verify Use it to design new products/services or redesign existing products/services Use it to design a new process *DFSS = Design for Six Sigma This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  16. 16. 46© Operational Excellence Consulting. All rights reserved. DMAIC Improvement Methodology Determine customer need to be satisfied Map the process, measure current performance Ensure that customer need is met and improvement is sustained DEFINE MEASURE ANALYZE IMPROVE CONTROL Customer Scope Team Measurement system Process Map Baseline Potential Causes Proposed Solutions Pilot Validation Transfer & Closure Reduce defects and variability in the process output by objectively determining the root causes of process issues 1 4 5 3 2 START with the customer END with the customer Identify variation drivers, propose solutions Validate solutions, optimize the process This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  17. 17. 49© Operational Excellence Consulting. All rights reserved. Measure Phase • Explore the process and learn about the Y (project output or metric). We will focus on the X’s in Analyze. • How does the process currently behave and what is the current performance of the process with respect to the customer? • When and where does the data come from? • Make sure that you have verified your measurement system. Don’t assume that your measurements are accurate. If you measure your data, make improvements and then verify the savings, how do you know you made a difference if the measurement system doesn’t accurately tell what is happening? This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  18. 18. 52© Operational Excellence Consulting. All rights reserved. Analyze Phase Deliverables At the end of the Analyze Phase you should have completed the following deliverables: • Cause & effect analysis Fishbone diagram, C&E matrix • FMEA (Failure Modes and Effects Analysis) • Graphical analysis • Statistical analysis Hypothesis testing Correlation & regression analysis This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  19. 19. 55© Operational Excellence Consulting. All rights reserved. Control Phase • The Control phase ensures that the gain achieved in the Improve phase are sustained. • Has the project goal been achieved? • Demonstrate how your solution achieved the desired results and explain any further action to be taken, including the responsible team members and timeline. • Discuss financial validation and provide evidence of project approval by the Champion or equivalent. • Summarize project conclusions, lessons learned and potential future areas of improvement; don’t forget to give credit to team members and key project contributors. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  20. 20. 58© Operational Excellence Consulting. All rights reserved. Tollgate Review • When is a Tollgate Review Carried Out? It is carried out after each stage of the DMAIC sequence (Define, Measure, Analyze, Improve and Control). The project cannot continue on to the next stage until it has passed the tollgate review. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  21. 21. 61© Operational Excellence Consulting. All rights reserved. DMAIC Improvement Methodology Measure Performance Define Opportunity Analyze Opportunity Improve Performance Control Performance Identify the critical business issues and concerns Understand the current process and it’s customers Characterize the Y and potential Xs Collect data for process elements Verify/quantify important Xs Identify factors (Xs) that have an influence on the business issue. Implement solutions to improve Y Adjusted the factors that influence the business concerns Manage important Xs and monitor the Y over time Mange routine or day-to-day operations for these critical factors DMAIC allows for the utilization of multiple tools and techniques when improving processes; including statistics and Lean techniques. The Control Phase allows teams to develop a process to ensure improvement results will be sustained over the long-term Each step in the DMAIC process is required and results in deliverables that ensures the team is focused on key process performance measures This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  22. 22. © Operational Excellence Consulting. All rights reserved. Organizing for Six Sigma This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  23. 23. 67© Operational Excellence Consulting. All rights reserved. Role of Leadership Team • Create a vision for the Six Sigma initiative • Define the strategic goals and measures of the organization • Establish the business targets • Create an environment within the organization that will promote the use of the Six Sigma methodology and tools • Establish the rewards and recognition system • Make resources available – team members and budgetThis document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  24. 24. 70© Operational Excellence Consulting. All rights reserved. Role of Process Owner • Takes ownership of the project when it is complete • Is responsible for maintaining the project gains • Removes barrier for Black Belts • Support the project team, e.g. make resources available • Maintain the Control Plans and ensure that they are active and compliant • Participate in tollgate reviews This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  25. 25. 73© Operational Excellence Consulting. All rights reserved. Role of Green Belts • Is trained in the subset of the Six Sigma methodology and tools • Works small scope projects, typically in his/her respective work area • Can be an effective team member on a Black Belt team This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  26. 26. 76© Operational Excellence Consulting. All rights reserved. Aligning the Right People to the Project TimeRequired/SkillLevel GreenBelt BlackBelt This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  27. 27. © Operational Excellence Consulting. All rights reserved. Project Selection & Management This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  28. 28. 82© Operational Excellence Consulting. All rights reserved. Sources of Projects • Internal Sources: Voice of Process Where are the defects, repairs, reworks? What are the major delays? What are the major wastes? Voice of Employee What concerns or ideas have employees or managers raised? What are we behind our competitors?This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  29. 29. 85© Operational Excellence Consulting. All rights reserved. Some Six Sigma Project Filters • Is the solution known? No - Six Sigma Project Yes - Implement Known Fix • Is sufficient data available to quantify the problem? No - Implement Data Collection Plan Yes - Six Sigma Project • Is the Root Cause known, supported with data and facts? No - Six Sigma Project Yes - Implement Fix • Is the problem being addressed elsewhere? No - Six Sigma Project Yes - Implement other Teams Solution • Does the project address a strategic focus area? Yes - Six Sigma Project No - Not Strategically Focused • Is this a new product, process, service, or plant? Yes - Use DFSS Methods No - Use DMAIC This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  30. 30. 88© Operational Excellence Consulting. All rights reserved. Six Sigma Metrics • Defect measures Defect rate, parts per million (ppm) Sigma level Defects per unit (dpu) Defects per million opportunities (DPMO) Yield • Practitioner measures Defect measures Cycle time, cost, performance, variability… Cost savings This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  31. 31. 91© Operational Excellence Consulting. All rights reserved. Financial Benefits • Every company may analyze hard and soft savings differently • Need to ensure that the project organization and Financial Analysts understand and adhere to your company’s set of guidelines regarding how these are defined and analyzed/measured This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  32. 32. 94© Operational Excellence Consulting. All rights reserved. Soft Savings – Examples • Cost avoidance • Opportunity cost • Capital avoidance • Productivity improvement • Customer loyalty/ retention • Reduction in cash flow • Reduction in need for working capital • Conformation to changes in the law • Increased safety in the workplace • Increased employee satisfaction • Increased customer satisfaction This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  33. 33. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  34. 34. 100© Operational Excellence Consulting. All rights reserved. Critical Success Factors 1. A visible commitment from the top leadership 2. Using the language of six-sigma throughout the organization 3. Relentless goals that force process reengineering 4. The use of innovative ideas to improve processes 5. Use of data and not emotion to make decisions This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
  35. 35. © Operational Excellence Consulting. All rights reserved. End of Presentation To view the full list of training presentations, please visit us at: Operational Excellence Consulting http://www.oeconsulting.com.sg This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/six-sigma-overview-163
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