Your SlideShare is downloading. ×
Six Sigma Overview by Operational Excellence Consulting
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Six Sigma Overview by Operational Excellence Consulting

2,005
views

Published on

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 …

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.

OBJECTIVES

Explain how Six Sigma improves business performance
Describe the Six Sigma philosophy and approach to continuous improvement
Define process variability
Describe the DMAIC improvement methodology
Recognize which Six Sigma tools to use for a particular problem
Identify Six Sigma roles and responsibilities, project selection and project management to realize the benefits

CONTENTS

Overview of Six Sigma
Key Concepts of Six Sigma
Applications of Six Sigma in Manufacturing, Process & Service Industries
Six Sigma DMAIC Methodology
Six Sigma Toolkit
Organizing for Six Sigma
Project Selection and Management
Critical Success Factors

To download this complete presentation, please go to: http://www.oeconsulting.com.sg

Published in: Business

2 Comments
9 Likes
Statistics
Notes
No Downloads
Views
Total Views
2,005
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
2
Likes
9
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. © Operational Excellence Consulting. All rights reserved. 1
  • 2. Program Objectives By the end of this program, you will be able to: • Explain how Six Sigma improves business performance • Describe the Six Sigma philosophy and approach to continuous improvement • Define process variability • Describe the DMAIC improvement methodology • Recognize which Six Sigma tools to use for a particular problem • Identify Six Sigma roles and responsibilities, project selection and project management to realize the benefits © Operational Excellence Consulting. All rights reserved. 2
  • 3. Program Outline NOTE: As this is a PREVIEW, only selected slides are shown. To download the complete presentation, please visit: http://www.oeconsulting.com.sg • 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 © Operational Excellence Consulting. All rights reserved. 3
  • 4. 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 © Operational Excellence Consulting. All rights reserved. 4
  • 5. What Six Sigma IS NOT • A standard • A certification • Another metric like percentage • Automation © Operational Excellence Consulting. All rights reserved. 5
  • 6. Myths of Six Sigma • Only works in manufacturing industry • Only interested in bottom line – ignores the customer • Creates a parallel organization • Requires large resources • Just another quality program © Operational Excellence Consulting. All rights reserved. 6
  • 7. Six Sigma is a measure of excellence • Six Sigma is a statistical measure of quality, which reflects process capability • It set the goal of achieving capability levels of 3.4 defects per million opportunities • Focuses on driving out variation in business processes - this is what the customer feels! • Sigma (s) is the Greek symbol used for Standard Deviation of a population © Max Zornada (2005) Slide 7 © Operational Excellence Consulting. All rights reserved. 7
  • 8. 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... © Operational Excellence Consulting. All rights reserved. 8
  • 9. Why is Six Sigma Important? Improves customer satisfaction by eliminating and reducing defects* Greater Profits *Any product or service that does not meet customer expectation is a defect. © Operational Excellence Consulting. All rights reserved. 9
  • 10. Poor quality costs a typical company 15-20% of sales annually We See Only the Tip of the Iceberg Maintenance and service Rejects Visible Rework Scrap Warranty claims Additional labor hours Opportunity cost if sales greater than plant capacity Cost to customer Expediting Improvement program costs Lost customer loyalty Process control Less Visible Vendor control Inspection/test (materials, equipment, labor) Excess inventory Quality engineering and administration Quality audits Longer cycle times © Operational Excellence Consulting. All rights reserved. 10
  • 11. Benefits of Six Sigma • Improves customer relationships by addressing “defects” • Defines a measurable way to track performance improvements • Focuses our attention on process management at all levels of the organization •  Improves the efficiency and effectiveness of processes by aligning them with customers’ needs • Delivers financial benefits to the business by eliminating the cost of poor quality © Operational Excellence Consulting. All rights reserved. 11
  • 12. Lean & Six Sigma • Lean improves the “flow” by eliminating waste Combining Lean with Six Sigma results in smooth and steady flow • Six Sigma improves the process by reducing variation © Operational Excellence Consulting. All rights reserved. 12
  • 13. Six Sigma Business Improvement Concept Traditional process analysis starts by examining the process inside the organization. Six Sigma first looks at the market/customers and asks how defects can be minimized in their terms. Market Suppliers Process Inputs Business Process Critical Customer Requirements Process Outputs Defects Root Cause Analysis of Defects Leads to Permanent Defect Reduction Variation in the Output of Processes Causes Defects • Disciplined management-by-fact problem solving • Methodology for optimizing the value chain • Measurement of performance excellence © Operational Excellence Consulting. All rights reserved. 13
  • 14. 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 © Operational Excellence Consulting. All rights reserved. 14
  • 15. Breakthrough Thinking Needed “85% of the reasons for failure to meet customer expectations are related to deficiencies in systems and processes… rather than the employee.” - Dr. W. Edwards Deming © Operational Excellence Consulting. All rights reserved. 15
  • 16. Problem-Solving Objective Off-Target Unpredictable X X X XXX XXX X X XX X X X X X X X X X X On-Target Center Process X X Xxx XX X Xxx XXX X X XX X X X X X Reduce Spread Sigma Identifies Off-Target Or Completely Unpredictable Variation And Corrects It © Operational Excellence Consulting. All rights reserved. 16
  • 17. Variability affects your costs and your customers’ experience LSL USL Unhappy Customer Excess Cost Understanding the nature of process variation is critical since customers feel the effects of process variation as well as the process average © Operational Excellence Consulting. All rights reserved. 17
  • 18. How to Manage Process Variation Process Off Target Excessive Variation Target Target Defects LSL Defects USL LSL Target Center Process USL Reduce Spread LSL USL © Operational Excellence Consulting. All rights reserved. 18
  • 19. Focus of Six Sigma Capability = y= f (Variation) f(x) Focus on the x-y relationship • y • x1 . . . xN • Dependent • Independent • Output • Input - Process • Effect • Cause • Symptom • Problem • Monitor • Control Process/Product Output (y) is a Function of Process Input Variables (x’s) © Operational Excellence Consulting. All rights reserved. 19
  • 20. What is Six Sigma Quality? • To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities (DPMO) • An "opportunity" is defined as a chance for nonconformance, or not meeting the required specifications • This means we need to be nearly flawless in executing our key processes © Operational Excellence Consulting. All rights reserved. 20
  • 21. A 6 Sigma Process Customer Target Lower Specification Limit Upper Specification Limit 0.00017% 1.7 ppm 0.00017% 1.7 ppm 6s 6s = 99.99966% of data inside the limits (Cp = 2) 0.00034% of points will be outside of the specification limits, i.e. defects (= 3.4 parts per million out of spec.) © Max Zornada (2005) © Operational Excellence Consulting. All rights reserved. Slide 21 21
  • 22. Sigma Level, DPMO & Financial Impact Sigma Level Percent Defective Percentage Yield Defects per Million Opportunities (DPMO) Cost of Poor Quality (as % of Sales) Remarks 1s 69% 31% 691,462 40 – 50% Bankruptcy 2s 31% 69% 308,538 30 – 40% Bankruptcy 3s 6.7% 93.3% 66,807 20 – 30% 4s 0.62% 99.38% 6,210 15 – 20% 5s 0.023% 99.977% 233 10 – 15% 6s 0.00034% 99.99966% 3.4 < 10% Current standard World-class Each Sigma shift generates a 10% savings of COPQ! © Operational Excellence Consulting. All rights reserved. 22
  • 23. Real World: What is Sigma Performance? Is 99% (3.8s) good enough? 99.99967% Good – At 6s 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 © Operational Excellence Consulting. All rights reserved. 23
  • 24. The Concept of ‘Outside-In’ To improve processes, look outward first – to the requirements defined by the customer . . . . Outside-In Thinking: External needs drive internal processes This is the essence of Customer Satisfaction © Operational Excellence Consulting. All rights reserved. 24
  • 25. CTQ Tree – Example 1st Level (Need) 2nd Level (Drivers) 3rd Level (CTQs) Taste Quality Looks How Warm Delivery of Pizza Delivery Speed Speed Variety Types of Pizza/ Toppings © Operational Excellence Consulting. All rights reserved. 25
  • 26. Basic Equation of a Process Y = f(X) THE OUTPUT IS A FUNCTION OF THE INPUT: INPUT OUTPUT X’s Y’s Independent Variables (f) = Process Dependent Variables Causes Effects CONTROL the X’s, monitor the Y’s © Operational Excellence Consulting. All rights reserved. 26
  • 27. The Blending Approach of Six Sigma Begin with... Analytical Problem Validate Y = f(X) Practical Solution Translate Analyze Practical Problem Translate Analytical Solution © Operational Excellence Consulting. All rights reserved. 27
  • 28. Reduce Process Defects and Variation TARGET: 100, +/- 25 I Chart of BEFORE 175 I Chart of AFTER 175 UCL=160.1 150 125 125 100 _ X=98.5 75 75 50 Individual Value Individual Value 150 125 125 100 UCL=113.4 _ X=100.2 LCL=86.9 75 75 50 LCL=36.8 1 11 21 31 41 51 61 Observation 71 Where we are . . . 81 91 1 11 21 31 41 51 61 Observation 71 81 91 Where we’d like to be . . . • Process defects create waste • Excessive cycle times and bottlenecks are waste • Variation drives inconsistency, which is also waste Use DATA to determine the x’s causing waste © Operational Excellence Consulting. All rights reserved. 28
  • 29. 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 © Operational Excellence Consulting. All rights reserved. 29
  • 30. Six Sigma DMAIC Approach Control by standardising solution and monitoring performance Improve by implementing potential solutions Define the problem or opportunity Control Improve Define 6sMeasure Analyse Measure the current performance and capability Analyse to identify root causes © Operational Excellence Consulting. All rights reserved. 30
  • 31. DMAIC Improvement Methodology Each step in the DMAIC process is required and results in deliverables that ensures the team is focused on key process performance measures Define Opportunity  Identify the critical business issues and concerns  Understand the current process and it’s customers Measure Performance Analyze Opportunity Improve Performance  Characterize the Y and potential Xs  Verify/quantify important Xs  Implement solutions to improve Y  Collect data for process elements  Identify factors (Xs) that have an influence on the business issue.  Adjusted the factors that influence the business concerns Control Performance  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 © Operational Excellence Consulting. All rights reserved. 31
  • 32. Phase DMAIC & Applicable Tools – Overview DEFINE • Voice of customer • CTQ Trees • QFD • Cost of poor quality Tools & Techniques • Kano analysis • Prioritization matrix • Stakeholder analysis • SIPOC process map • Identify KPIs • Operational definitions • Financial analysis • Project charter MEASURE ANALYZE • Data collection methods/plans • Detailed process mapping • Sampling plan • Brainstorming • Measurement system analysis • 5 whys • Fishbone diagram IMPROVE CONTROL • Brainstorming • SPC • Error proofing • Control plans • Benchmarking • Gage control plans • Assessment criteria • KPI trees • Prioritization matrix • Standardized processes • Pugh matrix • Hypothesis testing • Mistake proofing • FMEA • Design of experiments • Capability analysis • Graphical analysis • Solution screening • Graphical techniques • Hypothesis testing • Fishbone diagram • Multi-vari analysis • FMEA • Correlation and regression • Process capability • Gage R&R • Attribute R&R • Cause & effect matrix • Normal distribution • Affinity diagrams • Process stability • Sigma levels • Review of project goals and plan • Pilot studies • Responsibility/ accountability audits • Preventive maintenance • Project report • Closure action log • Financial validation • Project plan • Transition plan to process owner © Operational Excellence Consulting. All rights reserved. 32
  • 33. DMAIC Storyboard © Operational Excellence Consulting. All rights reserved. 33
  • 34. Six Sigma Project Organization Leadership Team Deployment Leader Champion (Political Leader) MBB (Technical Leader) Process Owner Black Belt Green Belt © Operational Excellence Consulting. All rights reserved. 34
  • 35. Role of Black Belts • Is responsible for leading, executing, and completing DMAIC projects • Teaches team members the Six Sigma methodology and tools • Assists in identifying project opportunities and refining project details and scope • Reports progress to the project champions and process owners • Transfers knowledge to other Black Belts and the organization • Mentors Green Belts © Operational Excellence Consulting. All rights reserved. 35
  • 36. 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 © Operational Excellence Consulting. All rights reserved. 36
  • 37. Six Sigma Training & Certification • There are no standard training and certification requirements for MBB/BB/GB. The specifics around each of these requirements vary from company to company, and training provider to training provider. • There is no Six Sigma certification body Certification Requirements Training Duration • Green Belt • • 2 weeks Half-day exam • • Passed GB exam Successful completion of 1-2 GB project(s) • Black Belt • • 4 weeks Half-day exam • • Passed BB exam Successful completion of 1-2 BB projects(s) © Operational Excellence Consulting. All rights reserved. 37
  • 38. Benefits or Savings? • Benefits  Bottom line can be affected by reduction in cost (savings) and by increasing the revenue  More positive connotation • Savings  Implies reduction  Narrow perception - Suggest a “I-have-to-cut-something” mentality • What starts as soft savings can become hard savings, after time – as the savings which could at first only be theorized becomes quantifiable © Operational Excellence Consulting. All rights reserved. 38
  • 39. Financial Benefits • Hard savings  Savings that have a direct impact on the profit and loss statement, e.g. wages, assets and material costs • Soft savings  Savings which are intangible with no definite price tag attached to them, e.g. opportunity costs, productivity improvement and employee satisfaction • Benefits  Benefits can comprise hard and/or soft savings © Operational Excellence Consulting. All rights reserved. 39
  • 40. END OF PREVIEW To download this presentation, please visit us at: www.oeconsulting.com.sg © Operational Excellence Consulting. All rights reserved.