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Six Sigma Primer - Seeking Meaningful Improvments

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Seminar Abstract: …

Seminar Abstract:
Six Sigma is not only an operational philosophy, but is also a specific method for characterizing process capability. Achieving good yield from a process requires improvements in every process step, pushing each process towards the Six Sigma goal. This presentation connects the dots between process complexity, process volume, process capability and yield.

Seminar Outline:
This presentation describes the essential concepts of Six Sigma, including:
* What is Six Sigma?
* Are my processes Six Sigma?
* What is process capability?
* Why should I care about Six Sigma?
* How do I get a process to Six Sigma?
* The Six Sigma goal: improving yield
* The relationship between six-sigma and yield

Who Should Attend:
* Owners and CEOs of businesses with large volumes and/or complex processes
* Quality Control Managers and Engineers
* Operations Managers and Manufacturing Engineers
* Companies wanting to improve yield and reduce latent defects
* Professionals trying to justify Six Sigma projects

Extended Abstract:
In many companies, process capability has not yet been designed and remains unknown, while the term "Six Sigma" remains a mysterious buzzword. In fact, "Six Sigma" has a very specific meaning, with significant implications for production operations with complex processes and large volumes. Executives who manage complex processes of more than 50 serial steps are keenly aware of the relationship between Process Capability and Yield, and use those terms to describe their processes. However, any company can benefit from using Process Capability and Yield as primary metrics for process thinking, measurement, analysis and improvements.

Progress towards Six Sigma requires Continuous Process Improvement (CPI) and Variability Reduction and Control (VRC), both consistent with the core principles of Lean, hence the expression Lean Six Sigma (LSS). Applying CPI, VR&C and LSS methods steadily improves process capability, moving production towards Six Sigma. How good is good enough? This presentation explains the trade-off between process capability and yield.

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  • Sobek pg 128 Shook pg 96 The Toyota Way Fieldbook pg 404
  • Jimmerson pg 35 The Toyota Way Fieldbook pg 401
  • The Toyota Way Fieldbook pg 408 Jimmerson pg 52
  • Transcript

    • 1. Six Sigma PrimerSeeking Meaningful Improvements Presented by: Andy Pattantyus Prepared for: APICS Orange County Chapter by Strategic Modularity, Inc. www.strategicmodularity.com andyp@strategicmodularity.com Phone: 855-LeanOps FAX: 661-554-0299 May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 1 of 40
    • 2. Six Sigma PrimerLearning Objectives• What is six sigma?• Are my processes six sigma?• What is process capability?• Why care about six sigma?• How can I get a process to six sigma?• The six sigma goal: improving yieldMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 2 of 40
    • 3. 1. What is Six Sigma?Overview• A description of process capability – Statistical – Mathematical• An operational philosophy – CPI – Continuous Process Improvement – VR&C – Variability Reduction & ControlMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 3 of 40
    • 4. What is Six Sigma?Definitions - ASQ• Six Sigma is a philosophy – This perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the outputs: This is generally expressed as y = f(x).• Six Sigma is a set of tools – The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement. A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis and flowcharting.• Six Sigma is a methodology – This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC (define, measure, analyze, improve and control). DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long- lasting solutions. While DMAIC is not the only Six Sigma methodology in use, it is certainly the most widely adopted and recognized. Source: ASQ [1]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 4 of 40
    • 5. What is Six Sigma?Definitions – Lean Lexicon• A quality standard of just 3.4 defects per one million opportunities; 99.9996% perfect.• Six sigma methodologies emphasize mathematical and statistical tools to improve the quality of processes that are already under control.• Application follows a five-step process of define, measure, analyze, improve, and control often referred to as DMAIC.• The term refers to the number of standard deviations a point is away from the mean point in a bell curve. It often is represented as 6 sigma. Source: Lean Lexicon [2]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 5 of 40
    • 6. What is Six Sigma?History• Born at Motorola – Motorola conceived the six sigma technique in 1986 as a way to achieve the company’s improvement goals in manufacturing and support functions.• Motorola Suppliers – Starting 1991 – Eveready Battery Company Inc. (Energizer)• Early corporate adopters – Starting 1995 – Allied-Signal (now Honeywell) – General Electric – 3MMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 6 of 40
    • 7. What is Six Sigma?Mathematics or Management?• Mathematics – Field of statistics known as Process Capability – Basis for measurements – Verifiable data is the basis for decisions• Management – Continuous improvement efforts • Reduce process variation • Achieve stable and predictable results – Focus on business and manufacturing processes – Organizational commitment, especially top-levelMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 7 of 40
    • 8. 2. Are my processes six sigma?Probably Not!• If your organization knows process capability, and regularly uses it as a tool, then you know if your processes are six sigma.• Otherwise, most processes which have not been the object of continuous process improvement and variability reduction are likely less than 4 sigma.May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 8 of 40
    • 9. 3. Process CapabilityA qualitative definition• Capable Process - Predictable – Stays in control w/o intervention – Get it right the first time – Process monitoring: Good Process = Good part – High yield• Poor Process - Unpredictable – Out of control - constant intervention required – High Scrap and/or Lots of rework – Checking parts instead of monitoring processes – Low yieldMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 9 of 40
    • 10. Process Capability - CpA quantitative definition SpecificationWidth Cp = Pr ocessCapab ility ± 4σ ± 6σ Cp = Cp = 1 .33 Cp = Cp = 2.0 ± 3σ ± 3σ Source: Motorola [4]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 10 of 40
    • 11. Process CapabilityMeasurement Methods• Design of Experiments (DOE) – Don’t know which variables are important• Statistical Process Control (SPC) – Stable process – Measuring the important variables• Process Capability (Cp) – Describes the ratio between process variability and the upper and lower specification limits. – Based on normal distribution statistics, which is valid only if there is no assignable cause variation!May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 11 of 40
    • 12. 4. Process Capability vs. Yield LossWhy Care About Six Sigma?• Six Sigma is all about reducing the cost of waste within the organization.• Two primary wastes with high costs – Yield Loss – translates to high production costs due to poor efficiency. – Latent Defects – translates to warranty costs from defects in the field.May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 12 of 40
    • 13. 4. Process Capability vs. Yield LossThree Quick Stories• Living with Systemic Waste – The Dumpster “Hall of Shame”• Living with latent defects – Hot House Aging• Living with defects during development – The “De-Ringer” DepartmentMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 13 of 40
    • 14. Process Capability vs. Yield LossWhy is Six-Sigma important? Source: Motorola [4]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 14 of 40
    • 15. Process Capability vs. Yield LossHow process shifts affect yield Source: Motorola [4]• At low process capability, a process shift can produce significant yield losses.• Six-sigma protects against yield lossesMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 15 of 40
    • 16. Process Capability vs. Yield LossHow process shifts affect yield• Graph shows one process step• Process control – Difficult to keep most processes centered – Expect a shift• Yield Loss = ƒ (Cp) – For Cp = 1, defect rate approaches 7% – For Cp = 2, defect rate is Source: Motorola [4] negligibleMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 16 of 40
    • 17. Process Capability vs. Yield LossYield measures process efficiency• Percent Yield: the proportion of useful output compared to a theoretical waste-free 100%• Rolled Yield: the proportion of units completing a process without defects.• First Time Yield: The proportion of units successfully passing an inspection step the first time.May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 17 of 40
    • 18. Process Capability vs. Yield LossCauses of Yield Loss• Process step is not performed correctly on some parts, due to process shift caused by the interaction between: – inadequate equipment, and – defective raw material.• Flawed inspection process, where the inspection process is prone to: – type I errors - false rejections, where conforming items may be incorrectly rejected. – type-II errors - false acceptance, where non- conforming items may be incorrectly accepted.May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 18 of 40
    • 19. Process Capability vs. Yield LossThe Tyranny of Large Numbers Source: Feiman [5]• The Math: 0.9 x 0.9 x 0.9 x 0.9 = 0.656• Imagine a process with hundreds of steps: Ex. Semiconductor Manufacturing• Yield becomes critically importantMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 19 of 40
    • 20. Process Capability & Yield LossManaging Workflow Complexity Source: Feiman [5]• Picture shows a single process step• Complex material flow paths• For rejected parts, flow stops while awaiting a disposition decisionMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 20 of 40
    • 21. 5. Getting to Six SigmaProcess Improvement• Continuous Process Improvement – TOC – Theory of Constraints – Lean – Six Sigma – TLS – TOC/Lean/SixSigma• Improvement Cycles – Measure – Develop processes to eliminate assignable cause variations – RepeatMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 21 of 40
    • 22. Getting to Six SigmaTools to Find Assignable Cause Source: Wordpress [6]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 22 of 40
    • 23. Getting to Six SigmaProcess Improvement• Deming formally defined the original improvement cycle – PDCA – Plan, Do, Check, Act• Six Sigma uses two PDCA-based project methodologies – DMAIC to improve existing products/processes • define, measure, analyze, improve, control – DMADV to develop new products/processes • define, measure, analyze, design, verifyMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 23 of 40
    • 24. Getting to Six SigmaPlan-Do-Check-Act Improvement Cyclss Source: Shook [9]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 24 of 40
    • 25. Getting to Six SigmaA3 Sheets PDCA Improvement Cycles The way The better things way to happen work. now. Do Plan Check Act Source: Sobek [7]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 25 of 40
    • 26. Getting to Six SigmaA3 Sheets as a Management Tool• A3 is the Basis for a results oriented culture• The point of the A3 is to: – Communicate – Gain Consensus – Solve Problems – Get Results• Understanding a new way to work replaces training a new behavior. – Existing staff implements a new process – New staff is oriented to existing processMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 26 of 40
    • 27. 6. Improving Yield - Six Sigma GoalDo we really need six sigma?• Go all the way to six sigma? Maybe• A clear organizational focus on achieving measurable and quantifiable returns from each Six Sigma project. – Weigh the Cost vs. Benefit • Cost of improvement project • Benefits from improved yield = reduced costs – Yield = ƒ (Capability, Number of Steps)May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 27 of 40
    • 28. Improving Yield - CapacityCapacity Planning and Reporting• The capacity plan must account for yield loss throughout the process. – Material loss - disposition as scrap – Extra capacity - disposition as rework• Some ERP systems have provisions for tracking yield loss and secondary part flows.• Some ERP systems have provisions for producing yield reportsMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 28 of 40
    • 29. Improving Yield - WorkflowManaging Yield Loss Complexity Parts Flow Parts Flow 10% Bad 10% Bad Source: Feiman [5]• Picture shows a single process step• Complex material flow paths• For rejected parts, flow stops while awaiting a disposition decisionMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 29 of 40
    • 30. The Tyranny of Large NumbersYield = ƒ (Capability, Number of Steps)• Yield is the result, dependent on: – Process capability – Number of steps• To improve yield: – Redesign product to decrease part count and improve process. – Redesign process to increase Cpk. Source: Motorola [4]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 30 of 40
    • 31. Improving Yield – Making the CaseDefining the Project - System• Analyze Process – Current State VSM• Conduct Investigations – Do the Gemba and create A3 sheets• Design Lean Process – Future State VSM• Conceptual Design: Several scenarios – Redesign the product and process - DFMA – Financial Analysis and Case – A3 sheets• Propose Project - A3 Sheets (PDCA story) – Schedule, resources, cost estimate• Review with management & refineMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 31 of 40
    • 32. Improving Yield - How to Spend?Product, Process or Capacity?• Product improvement generates: – reduced parts count – simplified manufacturing processes• Process improvement generates: – simplified manufacturing processes – improved process reliability – predictable capacity plans and schedules – permanent savings in labor, materials• Capital Investment in a low yield process – reduces ROA and ROIC – “hardtools” inefficiency – may make sense early in product life cycle or if time to market is the most important factorMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 32 of 40
    • 33. Improving Yield – Design WorkApproaching 100% Yield - Holy Grail• Redesign the Product - DFMA – Design for Manufacturability & Assembly – Reduce the parts count – Eliminate process steps• Redesign the Process - DFMA – Simple Process – Complex Part • Metal stamping – Complex Process – Simple Part • Multi-shot Injection MoldingMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 33 of 40
    • 34. Improving Yield – Best ProcessThe Ideal Process Step• Consumes no labor• Consumes no material• Requires no management• Requires no equipment• Cycle time = 0• Yield = 100%The ideal process step is the one thatdoes not exist!May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 34 of 40
    • 35. Improving Yield – Best ProcessConverging on the Ideal Process• Fewer parts – Eliminate parts via DFMA for product and process redesign.• Fewer process steps – Eliminate steps via DFMA for product and process redesign.• Robust processes tolerate ±1.5σ shift• Monitor process, not product• Fewer inspection steps to speed flowMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 35 of 40
    • 36. Improving Yield – Best ProcessThe Robust Process• Six Sigma Process Characteristics – Process mean is 6σ away from USL and LSL – Tolerates a ±1.5σ shift in process centeredness – 3.4 Defective Parts per Million Opportunities (DPMO) Source: Cmglee, Wikimedia Commons [8]May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 36 of 40
    • 37. Six Sigma PrimerTerminology• A3 – A single sheet of paper • DPMO – Defects per Million which tells a PDCA story. Opportunities• CP – Process Capability • LSL – Lower Spec Limit• CPI – Continuous Process • PDCA – Plan, Do, Check, Improvement Act cycle• DFMA – Design for • PPM – Parts per million Manufacturability and • SPC – Statistical Process Assembly Control• DMADV - define, measure, • TOC – Theory of analyze, design, verify Constraints• DMAIC – define, measure, • TLS – TOC/Lean/Six Sigma analyze, improve, control • USL – Upper Spec Limit• DOE – Design of • VR&C – Variability Experiments Reduction and ControlMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 37 of 40
    • 38. Six Sigma PrimerBibliography[1] ASQ, American Society for Quality, http://asq.org[2] Lean Lexicon, 4th Edition, Lean Enterprise Institute, 2008.[3] APICS Dictionary, 13th Edition, 2011[4] ENG 123, “Design for Manufacturability Participant Guide,” Motorola University, 1992[5] Feiman, Daniel, et.al “THE Book on . . . Business from A to Z: The 260 Most Important Answers You Need to Know ,” Build It Backwards Publishing, Los Angeles CA, 2011.[6] Tools for Root Cause Analysis, http://aacesubajou.wordpress.com[7] Sobek, Durward K. II, and Smalley, Art “Understanding A3 Thinking: A Critical Component of Toyota’s PDCA Management System,” Productivity Press, www.productivitypress.com , 2008, ISBN 978-1-56327-360-5[8] Cmglee, Six Sigma with 1.5 sigma Process shift, Wikimedia Commons[9] Shook, John, “Managing to Learn,” Lean Enterprise Institute, 2008May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 38 of 40
    • 39. About the SpeakerAndy Pattantyus, CPIMAndy Pattantyus, CPIM, is founder, owner and President of Strategic Modularity, Inc. (SMI), amanagement consulting company serving divisions of large corporations and SMB clients withannual revenues of $3 to $30 million. Andy is passionate about enabling client companies toreach their greatest potential by setting goals, preparing plans and eliminating waste.Andy’s 30 years of experience in designing/integrating modular production systems andflexible processes, developing new products, processes and machinery, provide him with awide base of knowledge on how to eliminate process inefficiencies. Andy solves businessproblems by combining technical innovation with strategy, system design, facility design,human resource management, project management and accounting. A streamlined andefficient business perspective, with a strong mix of technical skills, enables Andy and his teamto improve a company’s health. In Andy’s roles, achieving results always required significantplanning before execution.Before founding SMI, Andy managed development projects and material flow as a SeniorEngineering Manager at Eveready Battery Co. Inc. and as a Director at Quallion LLC. Andyholds 6 patents, a B.S. and an M.S. in Mechanical Engineering from Virginia Tech as well asan MBA from Case Western Reserve University.Andy authored chapters about Yield and Quality in the recently released book:© THE Book… on Business from A to Z: The 260 Most Important Answers You Need to Knowcopyrighted 2011 by Daniel Feiman.May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 39 of 40
    • 40. About the BookTHE Book On… BUSINESS from A to Z Daniel Feiman, MBA, CMC® Nominated for Global eBook of the Year http://goo.gl/Gjmz8 Managing Director Build It Backwards(TM) Success by Choice; Not Chance(SM) Office: 310.540.6717 Cell: 818.522.2892 Consulting & Training in: Strategy * Finance * Process dsfeiman@BuildItBackwards.com www.BuildItBackwards.com http://goo.gl/j6F5b http://goo.gl/TxRuAMay 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 40 of 40

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