Introduction To Six Sigma

Introduction To SIX - SIGMA Presented by : http://www.QualityGurus.com

Agenda 0750 - 0800 Participants introduction 0800 - 0930 Introduction to Six Sigma concept Key Concepts 0930 - 0945 Tea / Coffee Break 0945 - 1200 Forms of waste What is Sigma Components of Six Sigma 1200 - 0100 Lunch Break 0100 - 0200 Selecting a Project 0200- 0300 Open session / Q&A

Participants Introduction

Your Name

Department

Your job profile

Your exposure to Quality Management/ Six Sigma

Ground Rules

Program success depends on your participation. Actively participate.

Please avoid cross-talks.

Observe specified timings.

Please keep your mobile phones switched off.

Feel free to ask question at any point of time.

- Restrict question to specific issue being discussed, while general

questions can be discussed during Q & A session.

Enjoy the program !

Introduction to Six Sigma Purpose of six sigma : To make customer happier and increase profits

Origin of Six Sigma

1987 Motorola Develops Six Sigma

Raised Quality Standards

Other Companies Adopt Six Sigma

GE

Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training.

Dow Chemical, DuPont, Honeywell, Whirlpool

Time Line 2002 1995 1992 1987 1985 Dr Mikel J Harry wrote a Paper relating early failures to quality Motorola Allied Signal General Electric Johnson & Johnson, Ford, Nissan, Honeywell

Pilot’s Six-Sigma Performance Width of landing strip 1/2 Width of landing strip If pilot always lands within 1/2 the landing strip width, we say that he has Six-sigma capability.

Current Leadership Challenges

Delighting Customers.

Reducing Cycle Times.

Keeping up with Technology Advances.

Retaining People.

Reducing Costs.

Responding More Quickly.

Structuring for Flexibility.

Growing Overseas Markets.

Six Sigma— Benefits?

Generated sustained success

Project selection tied to organizational strategy

Customer focused

Profits

Project outcomes / benefits tied to financial reporting system.

Full-time Black Belts in a rigorous, project-oriented method.

Recognition and reward system established to provide motivation.

Management involvement?

Executives and upper management drive the effort through:

Understanding Six Sigma

Significant financial commitments

Actively selecting projects tied to strategy

Setting up formal review process

Selecting Champions

Determining strategic measures

Management Involvement?

Key issues for Leadership:

How will leadership organize to support Six Sigma ? (6  council, Director 6  , etc)

Transition rate to achieve 6  .

Level of resource commitment.

Centralized or decentralized approach.

Integration with current initiatives e.g. QMS

How will the progress be monitored?

What can it do?

Motorola:

5-Fold growth in Sales

Profits climbing by 20% pa

Cumulative savings of $14 billion over 11 years

General Electric:

$2 billion savings in just 3 years

The no.1 company in the USA

Bechtel Corporation:

$200 million savings with investment of $30 million

GE Six Sigma Economics Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma. 6 Sigma Project Progress 1996 1998 2000 2002 0 500 1000 1500 2000 2500 1996 Cost Benefit (in millions)

Overview of Six Sigma PAIN, URGENCY, SURVIVAL COSTS OUT GROWTH TRANSFORM THE ORGANIZATION CHANGE THE WORLD 6 SIGMA AS A STATISTICAL TOOL 6 SIGMA AS A PHILOSOPHY 6 SIGMA AS A PROCESS

Overview of Six Sigma

It is a Philosophy

Anything less than ideal is an opportunity for improvement

Defects costs money

Understanding processes and improving them is the most efficient way to achieve lasting results

It is a Process

To achieve this level of performance you need to:

D efine, M easure, A nalyse, I mprove and C ontrol

It is Statistics

6 Sigma processes will produce less than 3.4 defects per million opportunities

Philosophy

Know What’s Important to the Customer (CTQ)

Reduce Defects (DPMO)

Center Around Target (Mean)

Reduce Variation (Standard Deviation)

Critical Elements

Genuine Focus on the Customer

Data and Fact Driven Management

Process Focus

Proactive management

Boundary-less Collaboration

Drive for Perfection; Tolerance for failure

Data Driven Decision

Y

Dependent

Output

Effect

Symptom

Monitor

X1 . . . Xn

Independent

Input-Process

Cause

Problem

Control

f(X) Y= The focus of Six sigma is to identify and control Xs

Two Processes

Define

Measure

Analyze

Improve

Control

Define

Measure

Analyze

Design

Verify

DMAIC DMADV

Existing Processes

New Processes

DFSS

Key Concepts

COPQ (Cost of Poor Quality) - Lost Opportunities - The Hidden Factory - More Setups - Expediting Costs - Lost Sales - Late Delivery - Lost Customer Loyalty - Excess Inventory - Long Cycle Times - Costly Engineering Changes Average COPQ approximately 15% of Sales

Hidden Costs:

Intangible

Difficult to Measure

Traditional Quality Costs:

Tangible

Easy to Measure

- Inspection - Warranty - Scrap - Rework - Rejects

COPQ v/s Sigma Level Cost of Quality % Sales Sigma Level

CTQ (Critical-To-Quality)

CTQ characteristics for the process, service or process

Measure of “What is important to Customer”

6 Sigma projects are designed to improve CTQ

Examples:

Waiting time in clinic

Spelling mistakes in letter

% of valves leaking in operation

Defective and Defect

A nonconforming unit is a defective unit

Defect is nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction.

A defect does not necessarily make the unit defective

Examples:

Scratch on water bottle

(However if customer wants a scratch free bottle, then this will be defective bottle)

Defect Opportunity

Circumstances in which CTQ can fail to meet.

Number of defect opportunities relate to complexity of unit.

Complex units – Greater opportunities of defect than simple units

Examples:

A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15

DPO (Defect Per Opportunity)

Number of defects divided by number of defect opportunities

Examples:

In previous case (15 defect opportunities), if 10 units have 2 defects.

Defects per unit = 2 / 10 = 0.2

DPO = 2 / (15 x 10) = 0.0133333

DPMO (Defect Per Million Opportunities)

DPO multiplies by one million

Examples:

In previous case (15 defect opportunities), if 10 units have 2 defects.

Defects per unit = 2 / 10 = 0.2

DPO = 2 / (15 x 10) = 0.0133333

DPMO = 0.013333333 x 1,000,000 = 13,333

Six Sigma performance is 3.4 DPMO 13,333 DPMO is 3.7 Sigma

Yield

Proportion of units within specification divided by the total number of units.

Examples:

If 10 units have 2 defectives

Yield = (10 – 2) x 100 /10 = 80 %

Rolled Through Yield (RTY)

Y1 x Y2 x Y3 x ……. x Yn

E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54

Forms of Waste

What are the forms of waste?

Waste of Correction

Waste of Overproduction

Waste of processing

Waste of conveyance (or transport)

Waste of inventory

Waste of motion

Waste of waiting

1. Waste of correction

Repairing a defect wastes time and resources (Hidden factory)

Operation 1 Test Test Product Operation 2 Failure Investigation Rework Failure Investigation Rework Hidden Factory

2. Waste of Overproduction

Producing more than necessary or producing at faster rate than required

Excess labor, space, money, handling

3. Waste of processing

Processing that does not provide value to the product

Excess level of approvals

Tying memos that could be handwritten

Cosmetic painting on internals of equipment

Paint thickness more than specific values

4. Waste of conveyance

Unnecessary movement of material from one place to other to be minimized because -

It adds to process time

Goods might get damaged

Convey material and information ONLY when and where it is needed.

5. Waste of inventory

Any excess inventory is drain on an organization.

Impact on cash flow

Increased overheads

Covers Quality and process issues

Examples

Spares, brochures, stationary, …

6. Waste of Motion

Any movement of people, equipment, information that does not contribute value to product or service

7. Waste of Waiting

Idle time between operations

Period of inactivity in a downstream process because an upstream activity does not deliver on time.

Downstream resources are then often used in activities that do not add value, or worst result in overproduction.

Some more sources of Waste

Waste of untapped human potential.

Waste of inappropriate systems

Wasted energy and water

Wasted materials

Waste of customer time

Waste of defecting customers

What is Sigma?

Have you ever…

Shot a rifle?

Played darts?

What is the point of these sports? What makes them hard?

Have you ever…

Shot a rifle?

Played darts?

Who is the better shooter? Jack Jill

Variability

Deviation = distance between observations and the mean (or average)

Observations Deviations 10 10 - 8.4 = 1.6 9 9 - 8.4 = 0.6 8 8 - 8.4 = -0.4 8 8 - 8.4 = -0.4 7 7 - 8.4 = -1.4 averages 8.4 0.0 Jack 8 7 10 8 9 Jill

Deviation = distance between observations and the mean (or average)

Variability Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 - 6.6 = -0.6 6 6 - 6.6 = -0.6 averages 6.6 0.0 Jack Jill 7 6 7 7 6

Variance = average distance between observations and the mean squared

Variability Variance Observations Deviations 10 10 - 8.4 = 1.6 9 9 – 8.4 = 0.6 8 8 – 8.4 = -0.4 8 8 – 8.4 = -0.4 7 7 – 8.4 = -1.4 averages 8.4 0.0 Squared Deviations 2.56 0.36 0.16 0.16 1.96 1.0 Jack 8 7 10 8 9 Jill

Variance = average distance between observations and the mean squared

Variability Variance Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 – 6.6 = -0.6 6 6 – 6.6 = -0.6 averages 6.6 0.0 Squared Deviations 0.16 0.16 0.16 0.36 0.36 0.24 Jack Jill 7 6 7 7 6

Variability

Standard deviation = square root of variance

Jack Jill Average Variance Standard Deviation Jack 8.4 1.0 1.0 Jill 6.6 0.24 0.4898979 But what good is a standard deviation ?

Variability The world tends to be bell-shaped Most outcomes occur in the middle Fewer in the “ tails” (lower) Fewer in the “ tails” (upper) Even very rare outcomes are possible Even very rare outcomes are possible

Variability Here is why: Even outcomes that are equally likely (like dice), when you add them up, become bell shaped

Normal distributions are divide up into 3 standard deviations on each side of the mean Once your that, you know a lot about what is going on And that is what a standard deviation is good for ? “ Normal” bell shaped curve

Causes of Variability

Common Causes :

Random variation within predictable range (usual)

No pattern

Inherent in process

Adjusting the process increases its variation

Special Causes

Non-random variation (unusual)

May exhibit a pattern

Assignable, explainable, controllable

Adjusting the process decreases its variation

Limits

Process and Control limits:

Statistical

Process limits are used for individual items

Control limits are used with averages

Limits = μ ± 3 σ

Define usual (common causes) & unusual (special causes)

Specification limits:

Engineered

Limits = target ± tolerance

Define acceptable & unacceptable

Usual v/s Unusual, Acceptable v/s Defective Another View LSL USL USL LSL Off-Target Large Variation On-Target Center Process Reduce Spread The statistical view of a problem USL LSL LSL = Lower spec limit USL = Upper spec limit

More about limits Good quality: defects are rare (C pk >1) Poor quality: defects are common (C pk <1) C pk measures “Process Capability” If process limits and control limits are at the same location, C pk = 1. C pk ≥ 2 is exceptional. μ target μ target

Process capability

Good quality: defects are rare (Cpk>1)

Poor quality: defects are common (Cpk<1)

Cpk = min USL – x 3 σ = x - LSL 3 σ = 3 σ = (UPL – x, or x – LPL) = = 24 – 20 3(2) = = .667 20 – 15 3(2) = = .833 14 20 26 15 24

A Six Sigma Process – Predictably twice as good as what the customer wants 1 12 2 3 4 5 6 7 8 9 10 11 1  1  1  1  1  1  6  LSL USL    

3  v/s 6  2 3 4 5 6 7 8 9 12 10 16 15 14 13 11 1 LSL USL 6 Sigma curve 3 Sigma curve

Process shift allowed 2 3 4 5 6 7 8 9 12 10 16 15 14 13 11 1 LSL USL SD = 1 1.5 SD 1.5 SD

Six Sigma Measurement On one condition : Calculate the defects and estimate the opportunities in the same way... 3 4 5 6 7 66810 6210 233 3.4  Sigma DPMO

Six Sigma Measurement Sigma Defects numbers per million 1.5s 500,000 2.0s 308,300 2.5s 158,650 3.0s 67,000 3.5s 22,700 4.0s 6,220 4.5s 1,350 5.0s 233 5.5s 32 6.0s 3.4

Components of Six Sigma

Components Two components of Six Sigma 1. Process Power 2. People Power

Process Power

P-D-C-A P D C A Plan Do Check Act Act on what was learned Check the results Plan the change Implement the change on a small scale.

Approach Practical Problem Statistical Problem Statistical Solution Practical Solution

DMAIC - simplified

D efine

What is important?

M easure

How are we doing?

A nalyze

What is wrong?

I mprove

Fix what’s wrong

C ontrol

Ensure gains are maintained to guarantee performance

DMAIC approach D Define M Measure A Analyze I Improve C Control Identify and state the practical problem Validate the practical problem by collecting data Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution Confirm and test the statistical solution Convert the statistical solution to a practical solution

Define D Define M Measure A Analyze I Improve C Control VoC - Who wants the project and why ? The scope of project / improvement (SMART Objective) Key team members / resources for the project Critical milestones and stakeholder review Budget allocation

Measure Ensure measurement system reliability Prepare data collection plan Collect data - Is tool used to measure the output variable flawed ?

- 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 ?

D Define M Measure A Analyze I Improve C Control

Analyze How well or poorly processes are working compared with - Best possible (Benchmarking) - Competitor’s Shows you maximum possible result Don’t focus on symptoms, find the root cause D Define M Measure A Analyze I Improve C Control

Improve

Present recommendations to process owner.

Pilot run

Formulate Pilot run.

Test improved process (run pilot).

Analyze pilot and results.

Develop implementation plan.

Prepare final presentation.

Present final recommendation to Management Team.

Control Don’t be too hasty to declare victory. How will you maintain to gains made?

- Change policy & procedures

- Change drawings

Change planning

Revise budget

Training

Omitting a step in DMAIC? Step Consequences if the step is omitted 1. Define 2. Measure 3. Analyze 4. Improve 5. Control

Tools for DMAIC Define What is wrong? Measure Data & Process capability Analyze When and where are the defects Improve How to get to six sigma Control Display key measures

Benchmark

Baseline

Contract / Charter

Kano Model

Voice of the

Customer

Quality Function

Deployment

Process Flow Map

Project

Management

“ Management by

Fact ” – 4 What ’ s

7 Basic Tools

Defect Metrics

Data Collection,

Forms, Plan,

Logistics

Sampling

Techniques

Cause & Effect

Diagrams

Failure Models &

Effect Analysis

Decision & Risk

Analysis

Statistical Inference

Control Charts

Capability

Reliability Analysis

Root Cause Analysis

5 Why ’ s

Systems Thinking

Design of

Experiments

Modelling

Tolerancing

Robust Design

Process Map

Statistical Controls

Control Charts

Time Series

Methods

Non Statistical

Controls

Procedure

adherence

Performance

Mgmt

Preventive activities

Poke yoke

Components Two components of Six Sigma 1. Process Power 2. People Power Tell me, I forget. Show me , I remember. Involve me, I understand.

6  Training Master Black Belt Black Belts Green Belts Team Members / Yellow Belts Champions Mentor, trainer, and coach of Black Belts and others in the organization. Leader of teams implementing the six sigma methodology on projects. Delivers successful focused projects using the six sigma methodology and tools. Participates on and supports the project teams, typically in the context of his or her existing responsibilities.

Six Sigma Organization Champion Black Belt Black Belt Black Belt Green Belt Green Belt Green Belt Green Belt Green Belt Yellow Belt Yellow Belt Yellow Belt Yellow Belt Master Black Belt

6  Training Senior Executives Champions / Process owners Black-Belt Green Belt Employees (Yellow-Belt) Executive overview 2/3 Days Provide Leadership Champions Training - I 2 days Champions Training –II 3 days Process Mgmt. & Project champion Week 2 Week 3 Week 4 Training / Facilitation skills Project-work Master Black-Belt -As Trainer -Coach teams -Facilitate improvement projects 1 Week Green-Belt Training

Part of project teams

Sometime lead the teams

1 / 2 Days core training on Six-Sigma

General process control & improvement

Project Team Member

Black-Belt Project work Position in Six Sigma Organisation Typical Training Expected Role Post Training + (Total 5 days) Week 1

Champion

Plans improvement projects

Charters or champions chartering process

Identifies, sponsors and directs Six Sigma projects

Holds regular project reviews in accordance with project charters

Includes Six Sigma requirements in expense and capital budgets

Champion

Identifies and removes organizational and cultural barriers to Six Sigma success.

Rewards and recognizes team and individual accomplishments (formally and informally)

Communicates leadership vision

Monitors and reports Six Sigma progress

Validates Six Sigma project results

Nominates highly qualified Black Belt and/or Green Belt candidates

Master Black Belt Roles Responsibilities

Enterprise Six Sigma expert

Permanent full-time change agent

Certified Black Belt with additional specialized skills or experience especially useful in deployment of Six Sigma across the enterprise

- Highly proficient in using Six Sigma methodology to achieve tangible business results.

Technical expert beyond Black Belt level on one or more aspects of process improvement (e.g., advanced statistical analysis, project management, communications, program administration, teaching, project coaching)

Identifies high-leverage opportunities for applying the Six Sigma approach across the enterprise

Basic Black Belt training

Green Belt training

Coach / Mentor Black Belts

Black Belt Roles Responsibilities

Six Sigma technical expert

Temporary, full-time change agent (will return to other duties after completing a two to three year tour of duty as a Black Belt)

Leads business process improvement projects where Six Sigma approach is indicated.

Successfully completes high-impact projects that result in tangible benefits to the enterprise

Demonstrated mastery of Black Belt body of knowledge

Demonstrated proficiency at achieving results through the application of the Six Sigma approach

Coach / Mentor Green Belts

Recommends Green Belts for Certification

Green Belt Roles Responsibilities

Six Sigma Project originator

Part-time Six Sigma change agent. Continues to perform normal duties while participating on Six Sigma project teams

Six Sigma champion in local area

Recommends Six Sigma projects

Participates on Six Sigma project teams

Leads Six Sigma teams in local improvement projects

Yellow Belt Roles Responsibilities

Learns and applies Six Sigma tools to projects

Actively participates in team tasks

Communicates well with other team members

Demonstrates basic improvement tool knowledge

Accepts and executes assignments as determined by team

Financial Analyst

Validates the baseline status for each project.

Validates the sustained results / savings after completion of the project.

Compiles overall investment vs. benefits on Six Sigma for management reporting.

Will usually be the part of Senior Leadership Team.

Thought of the day

We don't know what we don't know

We can't act on what we don't know

We won't know until we search

We won't search for what we don't question

We don't question what we don't measure

Hence, We just don't know

Project Selection

The first step to implement Six Sigma

Sources of Projects

External Sources:

Voice of Customer

What are we falling short of meeting customer needs?

What are the new needs of customers?

Voice of Market

What are market trends, and are we ready to adapt?

Voice of Competitors

What are we behind our competitors?

Sources of Projects

Internal Sources:

Voice of Process

Where are the defects, repairs, reworks?

What are the major delays?

What are the major wastes?

Voice of Employee

What concerns or ideas have employees or managers raised?

What are we behind our competitors?

As a team List down at least 20 improvement projects related to your work areas …….

Project Selection A Problem Statement should be SMART :

S pecific - It does not solve world hunger

M easurable - It has a way to measure success

A chievable - It is possible to be successful

R elevant - It has an impact that can be quantified

T imely - It is near term not off in the future

Harvesting the Fruit of Six Sigma - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Sweet Fruit Design for Repeatability Bulk of Fruit Process Characterization and Optimization Low Hanging Fruit Seven Basic Tools Ground Fruit Logic and Intuition Process Enhancement - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Types of Savings