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Six sigma an overview | Online Mini MBA (Free)

  1. 1. Six Sigma: An Overview
  2. 2. CONTENTSA• Why: Six SigmaB• What: Six SigmaC• How: Six SigmaD• 6σ Project: Using DMAICFOURSECTIONS
  3. 3. Six Sigma: Why Factor
  4. 4. Why 6σ: An Example !!• Customers want their pizzadelivered fast!• Guarantee = “30 minutes or less”• What if we measured performance and found anaverage delivery time of 23.5 minutes?– On-time performance is great, right?– Our customers must be happy with us, right?
  5. 5. Why 6σ: An Example !!How often are we delivering on time?Answer: Look at the variation!• Managing by the average doesn‟t tell the whole story. Theaverage and the variation together show what‟s happening.sx30 min. or less0 10 20 30 40 50
  6. 6. Why 6σ: An Example !!Reduce Variation to Improve PerformanceHow many standarddeviations can you“fit” within customerexpectations?• Sigma level measures how often we meet (or fail to meet)the requirement(s) of our customer(s).sx30 min. or less0 10 20 30 40 50
  7. 7. Variation  Customer: The Relation• Variation means that aprocess does not producethe same result (the “Y”)every time.• Some variation will exist inall processes.• Variation directly affects customer experiences.Customers do not look at averages!-10-505101520
  8. 8. Six Sigma: PurposeA scientific and practical method to achieveimprovements in a companyScientific:• Structured approach.• Assuming quantitative data.Practical:• Emphasis on financial result.• Start with the voice of the customer.“Show methe data””Show methe money”
  9. 9. Six Sigma: AdvantageSigmaLevelDefects Per MillionOpportunitiesRate ofImprovement1  690,0002  308,000 2 times3  66,800 5 times4  6,210 11 times5  230 27 times6  3.4 68 times
  10. 10. 99.99966% Good (6 Sigma)• 20,000 lost articles of mail perhour• Unsafe drinking water foralmost 15 minutes each day• 5,000 incorrect surgicaloperations per week• Two short or long landings atmost major airports each day• 200,000 wrong drugprescriptions each year• No electricity for almost sevenhours each month• Seven articles lost per hour• One unsafe minute every sevenmonths• 1.7 incorrect operations per week• One short or long landing everyfive years• 68 wrong prescriptions per year• One hour without electricityevery 34 years99% Good (3.8 Sigma)Six Sigma: Practical Meaning
  11. 11. Six Sigma: What Factor
  12. 12. • The term “Six Sigma” was coined by Bill Smith, an engineer with Motorola• Late 1970s - Motorola started experimenting with problem solving throughstatistical analysis• 1987 - Motorola officially launched it’s Six Sigma programOrigin of Six SigmaMotorolathe company that invented Six Sigma
  13. 13. What‟s in a name ?μσ• Sigma is the Greek letter representing the standarddeviation of a population of data.• Sigma is a measureof variation(the data spread)
  14. 14. Six Sigma: DefinitionSix Sigma – The 3 Distinct Elements• A Measure:– A Statistical definition of how far a process deviates from perfection• A Target:– 3.4 defects per million opportunities• A Philosophy:– A long term business strategy focused on the reduction of the costthrough reduction of variability in product & process
  15. 15. Six Sigma: ConstrainsyxPoor DesignChanging NeedsMeasurement SystemInsufficient ProcessCapabilitySkills & Behaviors
  16. 16. • Characterize• Optimize• BreakthroughUSLTLSLUSLTLSLTUSLLSLUSL’LSL’Six Sigma: FocusCustomer Focused - Both Internally & Externally
  17. 17. Six Sigma: Reality• Six Sigma through the correct application ofstatistical tools can reap a company enormousrewards that will have a positive effect foryearsOr• Six Sigma can be a dismal failure if not usedcorrectly
  18. 18. Six Sigma: Spotlight• Accelerating fast breakthrough performance• Significant financial results in 4-8 months• Ensuring Six Sigma is an extension of theCorporate culture, not the program of month• Results first, then culture change!
  19. 19. Six Sigma: Reason for Success• The Success at Motorola, GE andAlliedSignal has been attributed to:– Strong leadership (Bob Galvin, Jack Welch andLarry Bossidy personally involved)– Initial focus on operations– Aggressive project selection (potential savings incost of poor quality > $50,000/year)– Training the right people
  20. 20. Six Sigma: Normal Distribution+/ - 3 +/ - 6 LSL USLppm0.001ppm1350ppm1350ppm0.001ToleranceTarget = m
  21. 21. Six Sigma: Distribution With CorrectionLSL0 ppm ppm3.41.5USLppm3.4ppm66803m+/- 6Tolerance• Six-Sigma allows for un-foreseen „problems‟ and longerterm issues when calculating failure error or re-work rates• Allows for a +/- 1.5 σ process „shift‟
  22. 22. Six Sigma: How Factor
  23. 23. Six Sigma – 3 DimensionToolsOrganizationMethodologyProcess variationLSL USLUpper/LowerspecificationlimitsRegression••••••••••••••••••••••••••••••DrivenbycustomerneedsEnabled by qualityteam.Led bySeniorMgmtDefine Measure Analyze Improve ControlVendorVendorProcess BProcess BProcess AProcess ACustomerCustomer VendorVendorProcess BProcess BProcess AProcess ACustomerCustomerProcess Map Analysis05101520253035L K A F B C G R D0%20%40%60%80%100%Frequency Cumulative FrequencyPareto Chart
  24. 24. Six Sigma: Focus AreaProcess Management helpsus maintain good resultsas we perform ourMission.Strategic planning helps us “focus”on key projects to reach ourVision.Process Improvement usingthe DMAIC process helpsus fix work problems andimprove ourPerformance.To be successful as an organization, we must learn how toeffectively apply ALL three (3) areas.StrategicPlanningProcessImprovementProcessManagementSix Sigma
  25. 25. Two components of Six Sigma1. Process Power2. People Power
  26. 26. Six Sigma: Process
  27. 27. Design For Six Sigma (DFSS): DMADV• 6 Sigma uses DMADV method for development of newproducts• Define design goals that are consistent with customer demands and theenterprise strategy.• Measure and identify CTQs• Analyze to develop and design alternatives,• Design details, optimize the design,• Verify the design, set up pilot runs, implement the production process
  28. 28. What is DFSS?• Design For Six Sigma (DFSS)– A rigorous approach to the design of a new product orservice– The goals:• Reduce delivery time and development cost and• Increase the effectiveness of the product or service and hencecustomer satisfaction.– Key elements:• A customer focus and the ability to measure quality using the sixsigma metric and philosophy• Appropriate design that delivers excitement without failure, anddoes so to budget and expectation• An overarching business strategy and management that brings outthe very best for organic growth, through the repeated and regularlaunch and successful development of new products and services
  29. 29. What is DFSS?
  30. 30. DMAIC - Simplified• Define– What is important?• Measure– How are we doing?• Analyze– What is wrong?• Improve– Fix what‟s wrong• Control– Ensure gains are maintained toguarantee performance• A logical and structured approach toproblem solving and processimprovement• An iterative process (continuousimprovement)• A quality tool with focus on changemanagement
  31. 31. Six Sigma: DMAICProcess Improvementutilizes a 5 step problemsolving DMAIC process:2) Measure5) Control4) Improve1) Define3) AnalyzeDisplay Problem ...WHATWHEREWHENWHOOUTCOMEStratify Problem ...1. Define 2. Measure3. Analyze 4. ImproveResults Standardization Future PlansChecksheetor Spreadsheet Line GraphMonthGOODTargetGAP%Histogramn=6321 Laten=21ParetoB C A DPROBLEM STATEMENTIdentify & Verify Root Cause ... Identify & Implement Countermeasures ...Countermeasures MatrixSingle Case Bore Contingency TableFISHBONEREASON/FACTORABC1CASE2 3 4 5 APresentAAbsentEffectCauseProblemNoProblem35 34 25AScatter DiagramCause "C"EffectBEFFECTPROBLEMSTATEMENTROOTCAUSEACA1A2C1C24 4 16 Y5 4 20 Y3 1 3 NEFFFEASOVRLACTN?3 2 6 NCMBARRIERS AIDSHigh A1a A1bHOW WHO1. Dev2. ImplWHENCONTROL CHARTSFLOW CHARTLESSONS LEARNEDWHATS NEXT?GOOD%CM IMPLMBefore Aftern=21n=10OverallEffectB C A D C B A DTargetStandardAction Plan5. Control4. Improve
  32. 32. Focus of Six Sigma• Y• Dependent• Output• Effect• Symptom• Monitor• X1 . . . Xn• Independent• Input-Process• Cause• Problem• Controlf(X)Y=The focus of Six sigma is to identify and control Xs
  33. 33. Path to Six SigmaYXsMeasureAnalyzeImproveControlProcessCharacterizationProcessOptimizationGoal: Y = f ( x )DefinePractical ProblemStatistical ProblemStatistical SolutionPractical Solution
  34. 34. The Approach to DMAICPracticalProblemStatisticalProblemStatisticalSolutionPracticalSolution
  35. 35. MethodologyDDefineMMeasureAAnalyzeIImproveCControlIdentify and state the practical problemValidate the practical problem by collecting dataConvert the practical problem to a statistical one, definestatistical goal and identify potential statistical solutionConfirm and test the statistical solutionConvert the statistical solution to a practical solution
  36. 36. DefineVoC - Who wants the project and why ?The scope of project / improvementKey team members / resources for the projectCritical milestones and stakeholder reviewBudget allocationDDefineMMeasureAAnalyzeIImproveCControl
  37. 37. MeasureEnsure measurement system reliabilityPrepare data collection plan- Is tool used to measure the output variable flawed ?- Do all operators interpret the tool reading in the same way ?- How many data points do you need to collect ?- How many days do you need to collect data for ?- What is the sampling strategy ?- Who will collect data and how will data get stored ?- What could the potential drivers of variation be ?DDefineMMeasureAAnalyzeIImproveCControl Collect data
  38. 38. AnalyzeUnderstand statistical problemBaseline current process capabilityDefine statistical improvement goalIdentify drivers of variation (significant factors)DDefineMMeasureAAnalyzeIImproveCControl
  39. 39. Analyze – Identify Drivers of VariationRoot Cause Analysis (fish bone)• A brainstorming tool that helps define and display major causes, sub causes androot causes that influence a process• Visualize the potential relationship between causes which may be creatingproblems or defectsProblemBackbonePrimary CauseSecondary CauseRoot Cause
  40. 40. Analyze – Identify Drivers of VariationControl – Impact Matrix• A visual tool that helps in separating the vital few from the trivial manyVital FewHigh Control – High ImpactCost IneffectiveLow Control – High ImpactCost IneffectiveHigh Control – Low ImpactTrivial ManyLow Control – Low ImpactControlImpact
  41. 41. Analyze – Identify Drivers of VariationPareto Chart• Pareto principle states that disproportionately large percentage of defects arecaused due to relatively fewer factors (generally, 80% defects are caused by 20%factors)05101520253035L K A F B C G R D0%20%40%60%80%100%Frequency Cumulative Frequency
  42. 42. Analyze – Identify Drivers of VariationProcess Map Analysis• Visually highlights hand off points / working relationships betweenpeople, processes and organizations• Helps identify rework loops and non value add stepsVendorVendorProcess BProcess BProcess AProcess ACustomerCustomer VendorVendorProcess BProcess BProcess AProcess ACustomerCustomer
  43. 43. ImproveMap improved processPilot solutionIdentify operating tolerance on significant factorsDDefineMMeasureAAnalyzeIImproveCControl
  44. 44. ControlEnsure measurement system reliability forsignificant factorsImproved process capabilitySustenance Plan- Is tool used to measure the input / process variables flawed ?- Do all operators interpret the tool reading in the same way ?- Statistical Process Control (SPC)- Mistake Proofing- Control PlanDDefineMMeasureAAnalyzeIImproveCControl
  45. 45. Two components of Six Sigma1. Process Power2. People Power
  46. 46. Six Sigma: People Power• High Level Executive committed to Six Sigma Success• Knowledgeable in Six Sigma Process• Assign key individuals to the Champion/Sponsor Position.• High Level Executive• Provide resources for the job• Assist Black Belts to select projects• Benchmark with other organizations• Resource for the Black Belts-experts• Experts on the Six Sigma process• Works with Champion to select projects• Leaders of the Six Sigma process• Bring the project vision to reality• Solely dedicated to Six Sigma Program• Oversee Green Belts• Project Leaders• Support the Black Belt to complete the projectExecutive LeaderChampion/SponsorMaster Black BeltBlack BeltGreen Belt Green Belt Green Belt
  47. 47. Six Sigma: A Project
  48. 48. Six Sigma: A ProjectCustomer SatisfactionThroughClaim AmountDDefineMMeasureAAnalyzeIImproveCControl
  49. 49. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControlStrong Relationship (10)Some Relationship (5)Weak relationship (2)No mark, no relationship (0)Relative importanceS NO1 102 103 84 55 1070 150 200 70 150 150 1503 2 1 3 2 2 2RELATIONSHIPSCUSTOMER NEEDSAbsoluteRelativeDriveability IssueSafety Features FunctioningPart Availability Based On OrderGood Exterior LookNo Rust of Parts< 100TechnicalImportanceTarget ValuePaintqualityPartspecerrorPartmissForwarddrivinggearReversedrivinggearABSAirbagQuality Function Deployment (QFD)For Customer Problems
  50. 50. Six Sigma: A ProjectS. N CUSTOMER PROBLEM CNTCLAIM AMT/ COUNTTOTALCLAIM AMT1 ABS unit not working 10 $ 300 $ 30002 Reverse gear slippage at 30 kph 5 $ 200 $ 10003 Paint claims 10 $ 100 $ 10004 No air bag label (spec error) 50 $ 10 $ 5005 Sun visor spec error 5 $ 50 $ 250TOTAL $ 5750TOTAL CLAIM AMOUNT12345Top – 5ClaimDetailsDDefineMMeasureAAnalyzeIImproveCControl
  51. 51. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControlCause & Effect Diagram(Fish Borne Diagram)All the Top-5 Problems(as per QFD) have beenanalyzed through Cause& Effect Diagram (FishBorne Diagram).
  52. 52. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControlCause & Effect Diagram(Fish Borne Diagram)Cause & Effect Diagram(Fish Borne Diagram)
  53. 53. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControlCause & Effect Diagram(Fish Borne Diagram)Cause & Effect Diagram(Fish Borne Diagram)
  54. 54. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControl• Changing machine procedure to incorporate ABS option in Roll &Brake machine. (Refer Annexure – A)• Incorporating Reverse gear checking method at Road Test. (ReferAnnexure – B)• Creating work standard for all areas to avoid miss outs. (ReferAnnexure – C)• Training procedure & skill requirement for all areas to identify skilllevel of technicians. (Refer Annexure – D)
  55. 55. Six Sigma: A ProjectDDefineMMeasureAAnalyzeIImproveCControlRefer Annexure – E(Creating Mistake proofs / Updating Work standard for all areas to avoidmiss outs)Based on the work standard, training given to all technicians who areworking in the designated area. Also in the control plan, multi-inspectionmentioned in some areas to avoid miss out.
  56. 56. For More details Visithttp://www.mybskool.comEmail us – support@mybskool.comCall us - +91-9840048418

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