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Solving Problems Through Six Sigma

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Practical application of Six Sigma in solving real business problems.

Practical application of Six Sigma in solving real business problems.


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  • 1. The University of Akron Uni ersit College of Business Administration Six Sigma: Solving Problems Practical Application of DMAIC 6500:333 Supply Chain & Operations Analysis Guest Lecture Akron, OH November 10, 2009 This document is confidential and is intended solely for the use and information of the client to whom it is addressed addressed. Michael Ryan Michael_Ryan@Goodyear.com http://www.linkedin.com/in/isolveproblems htt // li k di /i /i l bl NOT FOR DISTRIBUTION - MAY NOT BE REPRODUCED WITHOUT PERMISSION
  • 2. What is Six Sigma? A Statistical Measure Sigma Spelling Errors Time Keeping Errors DPMO Yield (%) 6σ 1 Misspelled word in a small library 1 Mi ll d di ll lib 6 Seconds per century 6S d t 3.4 34 99.9997 99 9997 Process & Method for Continuous Improvement Process & Method for Continuous Improvement Inspecting and Fixing products Fixing processes Enabler for Culture Change F th C t •Focus on the Customer Align People, Process and Systems on Agreed Metrics Ali P l P dS t A dM t i DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 1
  • 3. What’s In It For Me? Where it Started: • Focus on cost and Focus on cost and Internal productivity …To Where it s Evolved To Where it’s Evolved • Delighting Customers and Driving Revenue Solving Problems to Create a Win‐Win Scenario S l i P bl t C t Wi Wi S i DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 2
  • 4. It’s All About the Customer When it’s too anything (hot/cold, light/dark, small/big, etc…) is the ENEMY it’s not acceptable to  of the customer the customer QUALITY Customers Feel th V i C t F l the Variance, Not the Mean N t th M DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 3
  • 5. The Recipe For Six Sigma Define: What is the Problem Your Trying to Solve? Measure: If it Can’t Be Measured, It Can’t be Fixed Analyze:  How & Why do Defects Occur? Improve:  Reduce Process Variation Control:  Maintain The Gain & Keep it Fixed! Solving Problems to Create a Win‐Win Scenario S l i P bl t C t Wi Wi S i DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 4
  • 6. Three Keys To A Successful Project What’s The Problem Is it a Process? Can it Be You re Trying to Solve You’re Measured? Three Keys are Critical to Project Success Th K C iti l t P j t S DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 5
  • 7. What is The Problem You’re Solving? Understanding Customer Needs Understanding Customer Needs • Customers Can’t Always Tell You Translate Emotion to Data y • Customers Can’t Always Tell You Customer: “Your Service Stinks” Real Problem:  “Of the 23 shipments we received  from you last year, 2 were received on the  requested date, but 14 were at least 2 days late.” Translate the Voice of the Customer Into “Language Data” DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 6
  • 8. What is a Process? Beginning  Middle  End Input  Transformation  Output Start  And Then Some Magic Happens g pp Finish Definable: Can draw a picture of it… f p f Predictable: Know what result will be… Repeatable: Outcome is assured & repeated… Must Be: Definable, Predictable and Repeatable M t B D fi bl P di t bl dR t bl DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 7
  • 9. Customer Needs Must Be Measurable Critical to Satisfaction (CTS) • “I want a good cup of coffee” Critical to Quality (CTQ) • Identify measurable characteristics The Challenge:  • Qualitative to Quantitative How Does the Customer Measure Your Process?* How Does the Customer Measure Your Process? *Customer Has to Like It, Value It and Be Willing to Pay for It! DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 8
  • 10. Practical Application of Six Sigma External Customer: Process Variation Impacting Delivery Measurable Impact on Customer Satisfaction DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 9
  • 11. Six Sigma In Review Know What Is Important to The Customer (CTQ) h h ( ) What is the customer willing to pay for? Reduce Defects (DPMO) Identify when & why defects occur 4 3 2 1 0 Center Around Target (Mean) Target Xbar Build quality into the process LSL USL Reduce Variation (Standard Deviation) Improve process capability to maintain the gain A Strategy to Drive Change & Deliver Results A St t t D i Ch & D li R lt DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 10
  • 12. Ryanisms / Guiding Thoughts “What’s the problem you’re trying to solve?”  What s the problem you re trying to solve? and it's corollary…  "What's the question you're trying to answer?” q y y g …Some favorites: “If it can’t be measured, it can’t be fixed” If it can t be measured, it can t be fixed “A Process is: Definable, Predictable and Repeatable” “What’s the business case ($) to fix this problem?” ($) p "You don't know if you don't ask” And remember: And remember: “The measure of success is not whether you have a  tough problem to deal with, but whether it’s the same  problem you had last year.” DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 11
  • 13. APPENDIX DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 12
  • 14. It’s All About the Customer! Customers Value Consistency and Quality C t V l C it d Q lit • Expect performance, reliability, competitive prices, and on‐time delivery. • When expectations are not met, it creates the opportunity for someone else. Sigma Spelling Errors Time Keeping Errors DPMO Yield (%) 3σ 1.5 Misspelled words per page in a book 1 5 Misspelled words per page in a book 3.5 Months per century 3 5 Months per century 66,800 66 800 93.32 93 32 4σ 1 Misspelled words per 30 pages in a book 2.5 Days per century 6,200 99.379 5σ 1 Misspelled word in set of encyclopedias 30 Minutes per century 233 99.9767 6σ 1 Misspelled word in a small library 6 Seconds per century 3.4 99.9997 The Secret of Success is to Do Common Things Uncommonly Well. The Secret of Success is to Do Common Things Uncommonly Well. ‐ John Rockefeller DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 13
  • 15. A Process of Continuous Improvement DMAIC: It’s All About Process DMAIC: It’s All About Process Six Sigma is a highly disciplined process that helps us focus on  developing and delivering near‐perfect products and services. A.   Identify Project CTQ’s Define Customer expectations of the process? B.   Develop Team Charter C.   Define Process Map 1. Select CTQ Characteristics Select CTQ Characteristics Measure What is the frequency of defects? 2. Define Performance Standards 3. Measurement System Analysis on Y 4.   Establish Process Capability Analyze y Why, when, and where do defects occur? 5.   Define Performance Objectives 6.   Identify Variation Sources 7. Screen Potential Causes Improve How can we fix the process? 8. Discover Variable Relationships 9. Establish Operating Tolerances 10. Define & Validate Measurement System Control How can we make the process stay fixed? 11. Determine Process Capability 12. Implement Process Control Six Sigma Becomes “The Way You Work” Si Si B “Th W Y W k” DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 14
  • 16. Variation is the Enemy of Quality Fundamental Objective of Six Sigma Fundamental Objective of Six Sigma Reduce variation and eliminate defects Accurate, Accurate Accurate AND Precise Precise, Precise Not Precise Not Accurate 4 3 2 1 0 4 3 2 1 0 4 3 2 1 0 Target Target Target Xbar Xbar Xbar LSL USL LSL USL LSL USL Customers Feel the Variance, Not the Mean C t F l th V i N t th M DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 15
  • 17. Practical Application of Six Sigma Black Belt Projects: Full Time Job to Focus & Deliver l k l j ll i b & li Black Belt Projects Lead (7) Finance: Four process improvement projects, including: Fi F i t j t i l di Removed 1 day from monthly closing cycle for largest business unit GE Superabrasives EDM Cut Wire Dies Closing Process Timeline Lapping Process EDM Process Historical Target: Between 1997 and 2005 the Closing Transmission Target = 12pm +6WD Place parts on lapper Place parts on EDM Finished Part Finished Part Process Evolution: In 2006, the Closing Transmission Target was moved up to = 12pm +5WD Days to Close Cut to Near Net Shape Quick Finish 2006 - 2007 Lap (<12 hrs) 1997 - 2005 1996 Add Diamond 1995 Lapper removes 640 g/gal @ 14 ml/min Material / 709.6 ct/hr 49 Hours Ho rs +1 WD +2 WD +3 WD +4 WD +5 WD +6 WD +8 WD +10 WD 9:30 am Noon Noon Noon Noon Noon Noon Noon Process Issues Project Resolution 0 hrs 26.5 hrs 50.5 hrs 74.5 hrs 98.5 hrs 122.5 hrs 170.5 hrs 218.5 hrs •Consumes a great deal of lap feed • EDM cutting produces near-net shape elapsed elapsed elapsed elapsed elapsed elapsed elapsed •$2.28 per hour, per piece to lap • Leaves 0.050” on each side for clean up •Average of $111.72 in lap feed for 5208 • Reduces lapping to <12 hrs •On average 49 hours needed to lap 5208 5 Day Close Project is First Major Effort Since 1997 Eliminated 75% of Lap Feed to Finish 5211/08 Wire Dies Monthly Financial Close Process Improvement Generated Annual Savings of $96m Global Finance Quality & Process Improvement CIS 4 MCR / March 8, 2002 Wire Cut Summary.ppt Slide 1/2 Manufacturing Productivity:  Three projects, $430k in productivity including: Wire die scrap reduction, control of sonic velocity, and near‐net shape finishing Leverage 6σ A L 6 Across the Business to Drive Results th B i t D i R lt DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 16
  • 18. Practical Application of Six Sigma Internal Customer: Digitization (Process Automation) Project DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 17
  • 19. Practical Application of Six Sigma Green Belt Projects: Integrate Into Daily Role  l j il l aka “Divide & Conquer” Green Belt Projects Mentored (20) Green Belt Projects Mentored (20) Finance: 13 reporting, digitization, and process improvement projects, including: Monthly Closing, Monthly AR, Material Handling, and P&E Status Environmental, Health, and Safety (EHS): One project focused on  Reduced non‐occupational lost‐time days 24%, saving $334k in first full year  Commercial Opportunity: One project focused on excess inventory utilization Commercial Opportunity: One project focused on excess inventory utilization Identified market to sell excess inventory, generating $400k sales1 Manufacturing Productivity:  Five projects delivering $459k including: New vendor qualification2, setup time reduction, inventory utilization N d lifi ti t ti d ti i t tili ti 1.  Won 1Q 2002 GE Superabrasives Award for Six Sigma Productivity for inventory reduction program 2.  Won 3Q 2001 GE Superabrasives Award for Six Sigma Leadership for new vendor qualification Green Belts: 6σ B G B lt 6 Becomes A Force Multiplier AF M lti li DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 18
  • 20. Sample Financial Benefit of 6σ : EHS Project Internal Customer(s): Hourly Associates & Business Leadership Reactive Case Management Pro-Active Intervention (96 cases @ avg. 70.1 days/case) (64 cases @ avg. 54.5 days/case) 6725 Days Lost in ’01 3491 Days Lost in ‘02 Employee Informs Disability Center y GESW Shoulders Disability Center Informs y of Injury/Illness Burden in Lost B d i L t Onsite Care Nurse Time Days Regularly of New Cases Frequency and Duration of Injury / Illness reduced Identify Opportunities For early Disability Center Informs y Return to Work Onsite Care Nurse of Projected Lost Time Pro-Active Intervention • Onsite Care Nurse Works with Disability Reactive Case Management Center and Operations Management team •Employee set expectation of return to work date • Each Monday, all open cases are reviewed •Onsite Care Nurse notified after the fact after-the-fact • Opportunities for early return to work •No structure for early return to work identified and communicated to employee 48% Reduction in Lost Time Days, Saving $356k 48% R d ti i L t Ti D S i $356k DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009 6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 19