Information United System Consulting Group (Member of Tariq Alghanim Holding) Six Sigma – An Introduction Program : 6th September 2007 By: Ravi KalimuthuSpecially Designed for Tamilnadu Engineers Forum Venue: Caesars Restaurant. Fahaheel copyrights- IC Group 2007
About the Tutor.Business Development Manager &Management Consultant20 Years experience in Industrial &Management SectorCertified Si SiC tifi d Six Sigma Green belt & ISO G b lt9001:2000 Lead AuditorConducted More than 40 Training Ravi K li th R i KalimuthuPrograms in Several titles inManagement & Technical
About Information United System ConsultingGroup. (IUSC Group)(A Member of Tariq Al Ghanim Holdings) Provides Management Consultancy Services One stop solution for any business needs Consultancy provided >40 clients
Services offered… Certification related services Value added services Trainings / seminars
Certification related servicesISO 9001:2000 – Quality Management SystemISO 14001:2004 – Environmental ManagementSystemOHSAS 18001:2002 – Safety ManagementSystemISO 22000:2005 – Food Safety ManagementSystemISO 27001:2005 – Information SecurityManagement System and more…… d
Value added services Training & Implementation of Six Sigma Establishing KPIs Performance KPIs, measurement system & Balanced Scorecard Development of vision & values Business Plan l Business Process Re-engineering
Value added services Support services for effective implementation of ISO systems p y Implementing total quality management Implementing cost management concepts like activity based costing and quality costing etc., Implementing 5 ‘S’ Consultancy on CE marking
Training services Support for sustaining International standards certification Tailor made in-house programs Knowledge reach to 175 topics specially g p p y designed for improving business
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Contents What is Six Sigma? Why Six Sigma? Comparison of various management initiatives Overview of six sigma and lean principles Role of Green Belt Project Management Idea Process Mapping & Process Management Team Dynamics and Techniques y q Appreciating the use of QFD
What is Sigma (σ)TheTh term ‘Si ‘Sigma’ taken f ’ k from the G k alphabet, i h Greek l h b isused to designate the distribution or spread about themean (average) of any parameter of product, process or ( g ) y p p , pprocedure. Six Sigma is a system of practices originallydeveloped by Motorola to systematically improveprocesses by eliminating defects The process was defects.pioneered by Bill Smith at Motorola in 1986 and wasoriginally defined as a metric for measuring defects andimproving quality, and a methodology t reduce d f ti i lit d th d l to d defectlevels below 3.4 defects per one million opportunities((DPMO). )
What is Six Sigma (6σ)Level of process performance equivalent toproducing only 3.4 parts per million defects orhas a yield of 99.9997%.
What is Six Sigma (6σ)Six Sigma is a long-term, forward-thinking initiativedesigned to fundamentally change the way corporationsdo business. It is first and foremost "a business process that enablescompanies to increase profits dramatically by streamliningoperations, improving quality, and eliminating defects ormistakes in everything a company does. While traditional quality programs have focused ondetecting and correcting defects, Six Sigma encompassessomething broader: It provides specific methods to re re-create the process itself so that defects are neverproduced in the first place."
What is Six Sigma (6σ)Six Sigma has evolved over the last twodecades and so has its definition. Six definitionSigma has literal, conceptual, and practicaldefinitions.definitions Six Sigma can be taken at threedifferent levels:As a metricAs a methodologyAs a management systemEssentially, Six Sigma is all three at thesame time.
Six Sigma as a MetricThe term "Sigma" is often used as a scalefor levels of "goodness" or quality. Usingthis scale, "Six Sigma" equates to 3 4 scale 3.4defects per one million opportunities(DPMO). Therefore(DPMO) Therefore, Six Sigma started as adefect reduction effort in manufacturingand was then applied to other businessprocesses for the same purpose.
Six Sigma as a MethodologyAs Six Sigma has evolved, there has been lessemphasis on the literal definition of 3.4 DPMO, orcounting defects in products and processes. SixSigma is a business improvement methodologythat focuses an organization on:Understanding and managing customerrequirementsAligning key business processes to achieve thoserequirementsUtilizing rigorous data analysis to minimizevariation in those processesDriving rapid and sustainable improvement tobusiness processes
Six Sigma as a Methodology 2At the heart of the methodology is the DMAICmodel f process i d l for improvement. DMAIC i iscommonly used by Six Sigma project teamsand is an acronym for: y-Define opportunity-Measure performance-Analyze opportunity A l t it-Improve p p performance-Control performance
Six Sigma Management When practiced as a management system, SixSigma is a high performance system for executingbusiness strategy Six Sigma is a top down solution strategy. top-downto help organizations:•Align their business strategy to critical improvement efforts•Mobilize teams to attack high impact projects•Accelerate improved business results•Govern efforts to ensure improvements are sustainedThe Six Sigma Management System drives clarityaround the business strategy and the metrics thatmost reflect success with that strategy. It providesthe framework to prioritize resources f projects h f k forthat will improve the metrics, and it leveragesleaders who will manage the efforts for rapid, g p ,sustainable, and improved business results.
Determining Sigma Level g g Determining sigma levels of processes (1 sigma, 6 Sigma etc) allows process performance to compared throughout the organization. Sigma is a statistical term that measures how i ti Si i t ti ti l t th t h much a process varies from perfection, based on the number of defects per million units. p1 Sigma = 690,000 DPMO = 30.9% Final yield2 Sigma = 308,000 DPMO = 69.2%3 Sigma = 66,800 DPMO = 93.3%4 Sigma = 6,210 DPMO = 99.4%5 Sigma = 320 Si DPMO = 99.8% 99 8%6 Sigma = 3.4 DPMO = 99.9997
The Cost of Quality Sigma level DPMO Cost of Quality 2 308,507(non , ( NA competitive companies) 3 66,807 25 – 40% of Sales 4 6,210 (Industry 15 -25% of Average) Sales 5 233 5 – 15 % of sales 6 3.4 ( 3 4 (world class) ld l ) <1% of sales 1% f lEach sigma shift provides a 10% net income improvement.
Impact of six sigma implementation at GE (results achieved over first 2 years 1996-1998) ( lt hi d fi t 1996 1998) - R Revenues have risen to $100 billion, up 11% h i t billi - Earnings have increased to $9.3 billion, up 13% - Earnings per share have grown to $2.80, up 14% - Operating margin has risen to a record 16.7% - Working capital turns have risen sharply to 9.2%, up from 1997s record of 7.4
Why Six Sigma? Is it necessary to go for zero defects?Why isn’t 99.9% defect-free good enough? Here are some examples ofwhat life would be like if 99.9% were "good enough:"-1 HOUR OF UNSAFE DRINKING WATER EVERY MONTH- 2 LONG OR SHORT LANDINGS AT EVERY AMERICANAIRPORTS EACH DAY- 400 LETTERS PER HOUR WHICH NEVER ARRIVE ATTHEIR DESTINATION- 500 INCORRECT SURGICAL OPERATIONS EACH WEEK- 3,000 NEWBORNS ACCIDENTALLY FALLING FROMTHE HANDS OF NURSES OR DOCTORS EACH YEAR- 4,000 INCORRECT DRUG PRESCRIPTIONS PER YEAR- 22,000 CHECKS DEDUCTED FROM THE WRONG BANKACCOUNT EACH HOUR- 32,000 MISSED HEARTBEATS PER PERSON PER YEAR
Why Six Sigma? Is it necessary to go for zero defects? Here are some examples of what life would be like at Six Sigma-13 WRONG DRUG PRESCRIPTIONS PER YEAR 13-10 NEWBORNS ACCIDENTALLY FALLING FROM THEHANDS OF NURSES OR DOCTORS EACH YEAR- 1 LOST ARTICLE OF MAIL PER HOUR
Various ManagementInitiatives TOTAL PRODUCTIVE MAINTENANCE SIX SIGMA ISO 9001:2000 TOTAL QUALITY MANAGEMENT
Various ManagementInitiatives THE FOCUS IN TOTAL PRODUCTIVE MAINTENANCE (TPM) IS MINIMISATION OF LOSSES
Various ManagementInitiatives THE FOCUS IN SIX SIGMA IS MEASUREMENT
Various ManagementInitiatives THE FOCUS IN ISO 9001 IS SYSTEMS
Various ManagementInitiatives THE FOCUS IN TOTAL QUALITY MANAGEMENT (TQM) IS PEOPLE
Various ManagementInitiatives CAN ONE INITIATIVE WORK WITHOUT THE OTHER 1. For Losses (TPM), Measurements 1 F L (TPM) M t (Six Sigma) are essential 2. For Measurement (Six Sigma), Systems (QMS) are essential 3. For Systems (QMS), People (TQM) are essential
Summary yAll the initiatives are complementary to each other. .Thecontinued focus is the key factor. It is prudent to integrateeach initiative with the fundamental QMS like ISO9001:2000 The ff9001 2000 Th effort should b to take the people along h ld be k h l lthe process
Five Pillars of TQM Q PRODUCT EFFECTIVENESS WASTE ELIMINATION PROCESS SYSTEM RE-ENGINEERING PEOPLE SUITABILITY CULTURE & MATURITY LEADERSHIP
Six Sigma Process standard Vs Performance Standard Six Sigma Vs ISO 9001 Is I process and performance related d f l t d What is important in business Performance should consider both internal and external needs Measurement is the key. Measure what is important or what is needed M h ti i t t h ti d d Measurement without a target is meaning less Deviation from target is defect Defect is more important to customer than reject
DPMO Vs PPMSix Sigma demands 3.4 Defects perMillion Opportunity
Why the name “Green Belts”?The name Green belts comes from the sport ofKarate. Both Karate and Six Sigma depend onmental discipline and systematic, intensive training.Just as black belts in Karate depend on power, speedand decisiveness, Six Sigma green belts should alsodepend on the same qualities. Six Sigma Green beltsalso must be able to reposition themselves as theymove from one project to another.
Characteristics of Six Sigma Green Belt Proper understanding of Deliverable & CTQ. Proper Understanding of DMAIC steps Speaks the language of money time organizational money, time, objectives. Understands Project Charter and base line performance An expert in SPC and continuous improvement tools. Capable of i l C bl f implementing standardization methods ti t d di ti th d Drives change by challenging conventional wisdom. Anticipates and confronts problems proactively and solves them.
Define phaseThis hThi phase d fi defines th project. It id tifi critical the j t identifies iti lcustomer requirements and links them to businessneeds. It also defines a project charter and thebusiness processes to be undertaken for Six Sigma. Note: This phase is extensively covered in a separate chapter “Define phase”.
Measurement phaseThis phase involves selecting product characteristic characteristic,mapping respective process, making necessarymeasurements and recording the results of theprocess. This is essentially a data collection phase. Note: This phase is extensively covered in a separate chapter “Measurement phase”.
Analysis phaseIn this phase an action plan is created to close the p p“gap” between how things currently work and how theorganization would like them to work in order to meetthe goals for a particular product or service This phase service.also requires organizations to estimate their short termand long term process capabilities. Note: This phase is extensively covered in a separate chapter “Analysis phase . Analysis phase”
Improvement phaseThis phase involves improving processes/product p p g p /pperformance characteristics for achieving desired resultsand goals. This phase involves application of scientific toolsand techniques for making tangible improvements inprofitability and customer satisfaction. Note: This phase is extensively covered in a separate chapter “Improvement phase”.
Control phaseThis phase requires the process conditions to be properlydocumented and monitored through statisticalprocess control methods. After a “settling in” period, theprocess capability should be reassessed. Dependingupon the results of such a follow-up analysis, it may besometimes necessary to revisit one or more of thepreceding phases phases. Note: This phase is extensively covered in a separate chapter “Control phase”.
Key steps of the define phase A. A Identify project which are critical to customers. B. B Develop team charter / action plan. plan C. Define process map. Each t E h step is discussed i detail in the following i di d in d t il i th f ll i slide.
Deliverable & CTQ Department/ Function : Accounts 1S.no Deliverables CTQ Measurement method Acceptable criteria Remarks Agreement with 1 Customer reconcilations Correct statement of accounts customer book Timely updation Every month Respective date for various submission as 2 Fili of various returns Filing f i s t s Timely s b issi Ti l submission per matrix i Accuracy y No penalty Late fees p y Interest to the company Branch and profit-centre wise 3 profitability fit bilit Timely submission of statements By 25th of every month Accuracy of report
Deliverable & CTQS.no Deliverables CTQ Measurement method Acceptable criteria Remarks Delivery challan 1 Receipt of material Correct inwarding of quantity Zero Variance 30% reduction from Visual Reduction in unloading time present condition Documentation flow to SAP 2 excise department Timely issue of documents 1 Day SAP Accuracy of information y Zero Variance warranty claim 3 Cost Optimization 1.Re use warranty material To be decided 2. Reduction of cost through material 30% reduction in Visual handling equipments present situation Improve 50% floor Store Layout 3. Use of floor space space VSM 4. Recycling of cotton waste 10% cost savings SAP 5. 5 Reduction of non moving material non-moving To b d id d T be decided
Operations related :- Marketing1. Accuracy of forecast assumptions.2. Number of incorrect order entries.3. O3 Overstocked field supplies. t k d fi ld li4. Contract errors.5. Late deliveries.6.6 Customer complaints. complaints7. Warranty cost as a percentage of sales.
Operations related :- Purchase1. Premium freight cost/ demurrage charges.2. Down - time because of parts shortages.3. Number of Off specification parts used to keep line going.4. Cycle time from start of purchase request until items in house.5. Excess inventory.6. Percentage of purchased material rejected on receipt.
Operations related :-Manufacturing1. Yield per ton of raw materials.2. Percentage of parts scrapped.3. Percentage of parts reworked.4. Percentage of parts accepted on concession.5. Percentage of final p g product g graded as seconds.6. Production per man / machine. p
Operations related :- Product engineering 1. Number of engineering changes per document. 2. Number of errors found during design review. 3. N 3 Number of errors found in design evaluation test. b f f di d i l ti t t 4. Percentage of time over- run compared to planned ti l d time for development. f d l t 5. Percentage of cost over - run over estimated cost of d f development. l t 6. Number of tooling redesign after trial production.
Operations related :- Quality Assurance1. Percentage of lots rejected due to errors.2. Percentage of products having defects detected by customers.3. Number of engineering changes that should have been detected in design review.4. Errors in inspection / test reports.5. Cycle time t get corrective actions.5 C l ti to t ti ti6. Percentage of appraisal cost compared to production cost. d ti t
Operations related :- Product reliability Mean time to failure. Failure rate rate. Probability of failure occurrence during given time interval. interval Probability of failure non-occurrence during given time interval. i e ti e i te l Mean life time. Mean time to first generate overhaul. Mean time to repair. repair
Ope at o s e ated Operations related :- Accounting ccou t g1. Percentage of late payments.2. Time to respond to customer request for information.3. Billing errors.4. Incorrect accounting entries.5. Payroll errors.6. E6 Errors in cost estimates. i t ti t
Customer related Market share Market penetration New markets identified Overall customer satisfaction Customer complaints Customer retention R&D expenditure as a percentage of sales New products and services introduced p Sales per employee
Six Sigma – Tools and TechniquesQualityQ li Functioni Analysis f A l i of variance iDeployment Correlation and RegressionDesign of experiments Chi-Square q7 QC tools Control chartsNew 7 tools Control plansMeasurement system Robust designanalysis Cost of qualityProcess mapping Reliability EngineeringProject Management Quality Q lit systems tFMEA Fault tree analysisSPCT–T t Test
Certification of Six SigmaOption I – Certification as Six Sigma Green BeltBecoming certified as a Six Sigma Green Belt confirms your commitment to quality and the positive impact itwill have on your organization. The Six Sigma Green Belt operates in support of or under the supervision of aSix Sigma Black Belt, analyzes and solves quality problems and is involved in quality improvement projects.Option II – Certification as Six Sigma Black BeltBecoming certified Six Sigma Black Belt leads the quality or core process team involve in the data analysis. TheSix Sigma Black belt guides the green belt in taking the decisions with respect to quality problems and directquality improvement projectsCertification procedure:ASQ (American Society for Quality) offers the certification programmes in various field of discipline. In today’sworld, where competition is a fact of life and the need for a work force proficient in the principles and practicesof quality is a central concern of many companies, certification is a mark of excellence. It demonstrates that the q y y p ,certified individual has the knowledge to ensure the quality of products and services. Certification is aninvestment in your career and in the future of your employer.Training procedure:The Information United System Consulting Group offers extensive training for management staffs in order toachieve the certification for Six Sigma black belt and Six Sigma green belt. The training avenues could be asfollows: •In-house training can be conducted within the premises of any Company •External training
Our Training Programs *October 3rd Week 2007 – Six Sigma Green Belt Certification Program ( A 3 Day Program) *November 3rd Week 2007 – ISO 9001:2000 Lead Auditor Certification Course (A 5 Day program) Please enroll in our training programs to attain career development and call us for any of your training & Management consultancy needs… needs* Tentative Schedule
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