Six Sigma Introduction


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  • © 2003 FleetBoston Financial Page
  • © 2003 FleetBoston Financial Page
  • As a metric As a methodology As a management system Essentially, Six Sigma is all three at the same time." "...Six Sigma as a Metric: The term "Sigma" is often used as a scale for levels of 'goodness' or quality. Using this scale, 'Six Sigma' equates to 3.4 defects per one million opportunities (DPMO). Therefore, Six Sigma started as a defect reduction effort in manufacturing and was then applied to other business processes for the same purpose.." "...Six Sigma as a Methodology: As Six Sigma has evolved, there has been less emphasis on the literal definition of 3.4 DPMO, or counting defects in products and processes. Six Sigma is a business improvement methodology that focuses an organization on: Understanding and managing customer requirements Aligning key business processes to achieve those requirements Utilizing rigorous data analysis to minimize variation in those processes Driving rapid and sustainable improvement to business processes..“ "...Six Sigma Management System: Through experience, Motorola has learned that disciplined use of metrics and application of the methodology is still not enough to drive desired breakthrough improvements and results that are sustainable over time. For greatest impact, Motorola ensures that process metrics and structured methodology are applied to improvement opportunities that are directly linked to the organizational strategy. When practiced as a management system, Six Sigma is a high performance system for executing business strategy. Six Sigma is a top-down solution to help organizations: Align their business strategy to critical improvement efforts Mobilize teams to attack high impact projects Accelerate improved business results Govern efforts to ensure improvements are sustained.." "..The Six Sigma Management System drives clarity around the business strategy and the metrics that most reflect success with that strategy. It provides the framework to prioritize resources for projects that will improve the metrics, and it leverages leaders who will manage the efforts for rapid, sustainable, and improved business results..“ © 2003 FleetBoston Financial Page
  • First and simply, Six Sigma is a quality improvement methodology. © 2003 FleetBoston Financial Page
  • Six Sigma was then (1980’s) simply a statistical term that specifically referred to a performance target of 3.4 defects per million operations or 'opportunities' (DPMO). © 2003 FleetBoston Financial Page
  • Six Sigma is a very flexible concept. © 2003 FleetBoston Financial Page
  • It shows how much variation or "dispersion" there is from the average (mean, or expected value). A low standard deviation indicates that the data points tend to be very close to the mean, whereas high standard deviation indicates that the data are spread out over a large range of values. Square root of difference of each data point from the mean, divided by no of data points. What is the definition of variation? A difference between two or more similar things. © 2003 FleetBoston Financial Page
  • © 2003 FleetBoston Financial Page
  • During the mid to late 1980's Motorola developed its Six Sigma ideas, which extended to and embraced many existing quality improvement methods and tools. Motorola quickly realised that they could extend Six Sigma principles beyond manufacturing - to reduce variation and defects in all aspects of organizational performance. Following Motorola's success in defining and applying the Six Sigma methodology, Six Sigma became a transferable model. The early adopters of Six Sigma aside from Motorola were Allied Signal (a large avionics company which merged with Honeywell in 1999), and then more significantly the massive GE (General Electric) corporation; (according to most commentators the Six Sigma model was transferred between the Chief Executives of the respective organizations). GE particularly trumpeted its successes and multi-billion dollars of bottom-line improvements derived from Six Sigma, and by the end of the millennium Six Sigma was established as a mainstream management methodology, and had been adopted by very many of the world's largest corporations. Strictly speaking the Six Sigma brand is trade-marked in the USA and belongs to Motorola Inc.. Motorola has since developed its own accredited, certified services and training for Six Sigma, within what is called the 'Motorola University'. Six Sigma is very flexible, and it continues to evolve, and it's difficult to describe. © 2003 FleetBoston Financial Page
  • © 2003 FleetBoston Financial Page
  • six sigma DMAIC and DMAICT process elements D - Define opportunity M - Measure performance A - Analyse opportunity I - Improve performance C - Control performance, and optionally: T - Transfer best practice (to spread the learning to other areas of the organization) © 2003 FleetBoston Financial Page
  • CTQ  - Critical To Quality - An element within a process that has a major influence on the process quality, and typically the quality of a critical process, or it would be unlikely to be receiving Six Sigma attention. © 2003 FleetBoston Financial Page
  • © 2003 FleetBoston Financial Page
  • Six Sigma identifies several key roles for its successful implementation.[13] Executive Leadership includes the CEO and other members of top management. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. Champions take responsibility for Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from upper management. Champions also act as mentors to Black Belts. © 2003 FleetBoston Financial Page
  • Master Black Belts, identified by champions, act as in-house coaches on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from statistical tasks, they spend their time on ensuring consistent application of Six Sigma across various functions and departments. Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. © 2003 FleetBoston Financial Page
  • Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities, operating under the guidance of Black Belts. Some organizations use additional belt colours, such as Yellow Belts, for employees that have basic training in Six Sigma tools. © 2003 FleetBoston Financial Page
  • © 2003 FleetBoston Financial Page
  • Six Sigma Introduction

    2. 2. TOPICS (SESSION 1) <ul><li>Understanding Six Sigma </li></ul><ul><li>History of Six Sigma </li></ul><ul><li>Six Sigma Methodologies & Tools </li></ul><ul><li>Roles & Responsibilities </li></ul><ul><li>How Six Sigma can be Beneficial for You </li></ul>
    3. 3. What is Six Sigma ? The term &quot; Sigma &quot; is used to designate the distribution or spread about the mean (average) of any process or procedure. For a business or manufacturing process, the sigma value is a metric that indicates how well that process is performing. The higher the sigma value, the better. Sigma measures the capability of the process to perform defect-free-work. A defect is anything that results in customer dissatisfaction.
    4. 4. With Sig Sigma, the common measurement index is &quot;defects-per-unit,&quot; where a unit can be virtually anything--- a component, piece of material, line of code, administrative form, time frame, distance, etc. The Sigma value indicates how often defects are likely to occur. The higher the sigma value, the less likely a process will produce defects. As sigma increases, costs go down, cycle time goes down, and customer satisfaction goes up. What is Six Sigma … ?
    5. 5. SIX SIGMA IS. . . <ul><li>A performance goal, representing 3.4 defects for every million opportunities to make one. </li></ul><ul><li>A series of tools and methods used to improve or design products, processes, and/or services. </li></ul><ul><li>A statistical measure indicating the number of standard deviations within customer expectations. </li></ul><ul><li>A disciplined, fact-based approach to managing a business and its processes. </li></ul><ul><li>A means to promote greater awareness of customer needs, performance measurement, and business improvement. </li></ul>
    6. 6. <ul><li>Features that set Six Sigma apart from previous quality improvement initiatives include: </li></ul><ul><li>A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. </li></ul><ul><li>An increased emphasis on strong and passionate management leadership and support. </li></ul><ul><li>A special infrastructure of &quot;Champions,&quot; &quot;Master Black Belts,&quot; &quot;Black Belts,&quot; &quot;Green Belts&quot;, etc. to lead and implement the Six Sigma approach. </li></ul><ul><li>A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork. </li></ul>
    7. 7. WHAT’S IN A NAME? <ul><li>Sigma is the Greek letter representing the standard deviation of a population of data. </li></ul><ul><li>Sigma is a measure of variation </li></ul><ul><li>(the data spread) </li></ul>μ σ
    8. 8. WHAT DOES VARIATION MEAN? <ul><li>Variation means that a process does not produce the same result (the “Y”) </li></ul><ul><li>every time. </li></ul><ul><li>Some variation will exist in all processes. </li></ul><ul><li>Variation directly affects customer experiences. </li></ul>Customers do not feel averages!
    9. 9. MEASURING PROCESS PERFORMANCE THE PIZZA DELIVERY EXAMPLE. . . <ul><li>Customers want their pizza delivered fast! </li></ul><ul><li>Guarantee = “30 minutes or less” </li></ul><ul><li>What if we measured performance and found an average delivery time of 23.5 minutes? </li></ul><ul><ul><li>On-time performance is great, right? </li></ul></ul><ul><ul><li>Our customers must be happy with us, right? </li></ul></ul>
    10. 10. HOW OFTEN ARE WE DELIVERING ON TIME? ANSWER: LOOK AT THE VARIATION! <ul><li>Managing by the average doesn’t tell the whole story. The average and the variation together show what’s happening. </li></ul>s 0 10 20 30 40 50 x 30 min. or less
    11. 11. REDUCE VARIATION TO IMPROVE PERFORMANCE HOW MANY STANDARD DEVIATIONS CAN YOU “FIT” WITHIN CUSTOMER EXPECTATIONS? <ul><li>Sigma level measures how often we meet (or fail to meet) the requirement(s) of our customer(s). </li></ul>s 0 10 20 30 40 50 x 30 min. or less
    12. 12. MANAGING UP THE SIGMA SCALE Sigma % Good % Bad DPMO 1 30.9% 69.1% 691,462 2 69.1% 30.9% 308,538 3 93.3% 6.7% 66,807 4 99.38% 0.62% 6,210 5 99.977% 0.023% 233 6 99.9997% 0.00034% 3.4
    13. 13. EXAMPLES OF THE SIGMA SCALE <ul><li>In a world at 3 sigma. . . </li></ul><ul><li>There are 964 U.S. flight cancellations per day. </li></ul><ul><li>The police make 7 false arrests every 4 minutes. </li></ul><ul><li>In MA, 5,390 newborns are dropped each year. </li></ul><ul><li>In one hour, 47,283 international long distance calls are accidentally disconnected. </li></ul><ul><li>In a world at 6 sigma. . . </li></ul><ul><li>1 U.S. flight is cancelled every 3 weeks. </li></ul><ul><li>There are fewer than 4 false arrests per month. </li></ul><ul><li>1 newborn is dropped every 4 years in MA. </li></ul><ul><li>It would take more than 2 years to see the same number of dropped international calls. </li></ul>
    14. 14. TOPICS <ul><li>Understanding Six Sigma </li></ul><ul><li>History of Six Sigma </li></ul><ul><li>Six Sigma Methodologies & Tools </li></ul><ul><li>Roles & Responsibilities </li></ul><ul><li>How Six Sigma can be Beneficial for You. </li></ul>
    15. 15. THE SIX SIGMA EVOLUTIONARY TIMELINE 1736 : French mathematician Abraham de Moivre publishes an article introducing the normal curve. 1896 : Italian sociologist Vilfredo Alfredo Pareto introduces the 80/20 rule and the Pareto distribution in Cours d’Economie Politique . 1924 : Walter A. Shewhart introduces the control chart and the distinction of special vs. common cause variation as contributors to process problems. 1941 : Alex Osborn, head of BBDO Advertising, fathers a widely-adopted set of rules for “brainstorming”. 1949 : U. S. DOD issues Military Procedure MIL-P-1629, Procedures for Performing a Failure Mode Effects and Criticality Analysis . 1960 : Kaoru Ishikawa introduces his now famous cause-and-effect diagram. 1818 : Gauss uses the normal curve to explore the mathematics of error analysis for measurement, probability analysis, and hypothesis testing. 1970s : Dr. Noriaki Kano introduces his two-dimensional quality model and the three types of quality. 1986 : Bill Smith, a senior engineer and scientist introduces the concept of Six Sigma at Motorola 1994 : Larry Bossidy launches Six Sigma at Allied Signal. 1995 : Jack Welch launches Six Sigma at GE.
    18. 18. TOPICS <ul><li>Understanding Six Sigma </li></ul><ul><li>History of Six Sigma </li></ul><ul><li>Six Sigma Methodologies & Tools </li></ul><ul><li>Roles & Responsibilities </li></ul><ul><li>How Six Sigma can be Beneficial for You </li></ul>
    19. 19. DMAIC – THE IMPROVEMENT METHODOLOGY D efine M easure A nalyze I mprove C ontrol Objective : DEFINE the opportunity Objective : MEASURE current performance Objective : ANALYZE the root causes of problems Objective : IMPROVE the process to eliminate root causes Objective : CONTROL the process to sustain the gains. <ul><li>Key Define Tools : </li></ul><ul><li>Cost of Poor Quality (COPQ) </li></ul><ul><li>Voice of the Stakeholder (VOS) </li></ul><ul><li>Project Charter </li></ul><ul><li>As-Is Process Map(s) </li></ul><ul><li>Primary Metric (Y) </li></ul><ul><li>Key Measure Tools : </li></ul><ul><li>Critical to Quality Requirements (CTQs) </li></ul><ul><li>Sample Plan </li></ul><ul><li>Capability Analysis </li></ul><ul><li>Failure Modes and Effect Analysis (FMEA) </li></ul><ul><li>Key Analyze Tools : </li></ul><ul><li>Histograms, Boxplots, Multi-Vari Charts, etc. </li></ul><ul><li>Hypothesis Tests </li></ul><ul><li>Regression Analysis </li></ul><ul><li>Key Improve Tools : </li></ul><ul><li>Solution Selection Matrix </li></ul><ul><li>To-Be Process Map(s) </li></ul><ul><li>Key Control Tools : </li></ul><ul><li>Control Charts </li></ul><ul><li>Contingency and/or Action Plan(s) </li></ul>
    20. 20. DEFINE – DMAIC PROJECT WHAT IS THE PROJECT? <ul><li>What is the problem? The “problem” is the Output (a “Y” in a math equation Y=f(x1,x2,x3) etc). </li></ul><ul><li>What is the cost of this problem </li></ul><ul><li>Who are the stake holders / decision makers </li></ul><ul><li>Align resources and expectations </li></ul>Project Charter Voice of the Stakeholder Six Sigma $ Cost of Poor Quality
    21. 21. DEFINE – CUSTOMER REQUIREMENTS WHAT ARE THE CTQS? WHAT MOTIVATES THE CUSTOMER? Voice of the Customer Key Customer Issue Critical to Quality SECONDARY RESEARCH PRIMARY RESEARCH Surveys OTM Industry Intel Listening Posts Market Data Industry Benchmarking Focus Groups Customer Service Customer Correspondence Obser-vations
    22. 22. MEASURE – BASELINES AND CAPABILITY WHAT IS OUR CURRENT LEVEL OF PERFORMANCE? <ul><li>Sample some data / not all data </li></ul><ul><li>Current Process actuals measured against the Customer expectation </li></ul><ul><li>What is the chance that we will succeed at this level every time? </li></ul>
    23. 23. ANALYZE – POTENTIAL ROOT CAUSES WHAT AFFECTS OUR PROCESS? y = f (x 1 , x 2 , x 3 . . . x n ) Ishikawa Diagram (Fishbone) Six Sigma
    24. 24. ANALYZE – VALIDATED ROOT CAUSES WHAT ARE THE KEY ROOT CAUSES? y = f (x 1 , x 2 , x 3 . . . x n ) Critical Xs Process Simulation Data Stratification Regression Analysis Six Sigma
    25. 25. IMPROVE – POTENTIAL SOLUTIONS HOW CAN WE ADDRESS THE ROOT CAUSES WE IDENTIFIED? <ul><li>Address the causes, not the symptoms. </li></ul>Decision y = f (x 1 , x 2 , x 3 . . . x n ) Critical Xs Evaluate Clarify Generate Divergent | Convergent
    26. 26. IMPROVE – SOLUTION SELECTION HOW DO WE CHOOSE THE BEST SOLUTION? Solution Implementation Plan Solution Selection Matrix Solution Sigma Time CBA Other Score Time Quality Cost Six Sigma ☺ Nice Try Nice Idea X Solution Right Wrong Implementation Bad Good
    27. 27. CONTROL – SUSTAINABLE BENEFITS HOW DO WE ”HOLD THE GAINS” OF OUR NEW PROCESS? <ul><li>Some variation is normal and OK </li></ul><ul><li>How High and Low can an “X” go yet not materially impact the “Y” </li></ul><ul><li>Pre-plan approach for control exceptions </li></ul>
    28. 28. DFSS – THE DESIGN METHODOLOGY D ESIGN F OR S IX S IGMA <ul><li>Uses </li></ul><ul><ul><li>Design new processes, products, and/or services from scratch </li></ul></ul><ul><ul><li>Replace old processes where improvement will not suffice </li></ul></ul><ul><li>Differences between DFSS and DMAIC </li></ul><ul><ul><li>Projects typically longer than 4-6 months </li></ul></ul><ul><ul><li>Extensive definition of Customer Requirements (CTQs) </li></ul></ul><ul><ul><li>Heavy emphasis on benchmarking and simulation; less emphasis on base lining </li></ul></ul><ul><li>Key Tools </li></ul><ul><ul><li>Multi-Generational Planning (MGP) </li></ul></ul><ul><ul><li>Quality Function Deployment (QFD) </li></ul></ul>D efine M easure A nalyze D evelop V erify
    29. 29. TOPICS <ul><li>Understanding Six Sigma </li></ul><ul><li>History of Six Sigma </li></ul><ul><li>Six Sigma Methodologies & Tools </li></ul><ul><li>Roles & Responsibilities </li></ul><ul><li>How Six Sigma can be Beneficial for You </li></ul>
    30. 30. CHAMPIONS <ul><li>Promote awareness and execution of Six Sigma within lines of business and/or functions </li></ul><ul><li>Identify potential Six Sigma projects to be executed by Black Belts and Green Belts </li></ul><ul><li>Identify, select, and support Black Belt and Green Belt candidates </li></ul><ul><li>Participate in 2-3 days of workshop training </li></ul>
    31. 31. BLACK BELTS <ul><li>Use Six Sigma methodologies and advanced tools (to execute business improvement projects </li></ul><ul><li>Are dedicated full-time (100%) to Six Sigma </li></ul><ul><li>Serve as Six Sigma knowledge leaders within Business Unit(s) </li></ul><ul><li>Undergo 5 weeks of training over 5-10 months </li></ul>
    32. 32. GREEN BELTS <ul><li>Use Six Sigma DMAIC methodology and basic tools to execute improvements within their existing job function(s) </li></ul><ul><li>May lead smaller improvement projects within Business Unit(s) </li></ul><ul><li>Bring knowledge of Six Sigma concepts & tools to their respective job function(s) </li></ul><ul><li>Undergo 8-11 days of training over 3-6 months </li></ul>
    33. 33. OTHER ROLES <ul><li>Subject Matter Experts </li></ul><ul><ul><li>Provide specific process knowledge to Six Sigma teams </li></ul></ul><ul><ul><li>Ad hoc members of Six Sigma project teams </li></ul></ul><ul><li>Financial Controllers </li></ul><ul><ul><li>Ensure validity and reliability of financial figures used by Six Sigma project teams </li></ul></ul><ul><ul><li>Assist in development of financial components of initial business case and final cost-benefit analysis </li></ul></ul>
    34. 34. TOPICS <ul><li>Understanding Six Sigma </li></ul><ul><li>History of Six Sigma </li></ul><ul><li>Six Sigma Methodologies & Tools </li></ul><ul><li>Roles & Responsibilities </li></ul><ul><li>How Six Sigma can be Beneficial for You? </li></ul>
    35. 35. <ul><li>Focus on customers. </li></ul><ul><li>Improved customer loyalty. </li></ul><ul><li>Reduced cycle time. </li></ul><ul><li>Less waste. </li></ul><ul><li>Data based decisions. </li></ul><ul><li>Time management </li></ul><ul><li>Sustained gains and improvements. </li></ul><ul><li>Systematic problem solving. </li></ul><ul><li>Employee motivation </li></ul><ul><li>Data analysis before decision making. </li></ul><ul><li>Faster to market. </li></ul><ul><li>Team building. </li></ul><ul><li>Improved customer relations. </li></ul><ul><li>Assure strategy planning. </li></ul>
    36. 36. <ul><li>Effective Supply chain management </li></ul><ul><li>Knowledge of Competition & Competitors. </li></ul><ul><li>Develop Leadership skill. </li></ul><ul><li>Breakdown barriers between departments and functions. </li></ul><ul><li>Management training. </li></ul><ul><li>Improve presentation skills. </li></ul><ul><li>Integration of products ,services and distribution. </li></ul><ul><li>Use of standard operating procedures. </li></ul><ul><li>Better decision making. </li></ul><ul><li>Improving Projects Planning kills. </li></ul>