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6 Sigma - Chapter8
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. Chapter 8: Implementation of Six Sigma Aim This chapter discusses the five phases of a Six Sigma breakthrough strategy in detail. You will learn the steps to be taken in each phase and the tools and methods to be used. Six Sigma Breakthrough Strategy Every project has a process or design problem that must be solved. The Breakthrough Strategy directs people's energies to finding solutions and improving bottom lines. It shows companies how much information (and therefore money) they are losing out on. The Breakthrough Strategy takes executives through the maze of business, technology, manufacturing, quality, production, and delivery system issues. In doing so, it initially raises more and more questions. Identifying a problem is simple compared with defining the underlying causes. Underlying causes are often masked by layers of skewed financial reports, irrelevant data, or a corporation's cultural bias. Five fundamental steps of the Six Sigma Breakthrough Strategy There are five fundamental steps or stages involved in applying the Implementation Strategy to achieve Six Sigma quality in a process, division, or company. These phases are: • Plan • Assess • Evaluate • Enhance • Control Planning Phase This is the project selection phase. Steps taken in this phase are: 1. Identify the problem 2. Define the scope & requirements 3. Define the goals & objectives 4. Set targets & measures 5. Define the time-scales 6. Define the cost of poor quality 7. Obtain project approval
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. 8. Team selection, roles & responsibilities for Black Belt, Green Belt & Yellow Belt. A team of experienced people from both the Line and Staff function should first get together and come up with the project definition. Next, they need to identify the scope, target and measures. Assess Phase This includes a review of the types of measurement systems and their key features. For this the employees in the company must have a good understanding of the nature and properties of data collection and reporting. Four important steps to look at in this phase are: 1. Areas where errors can occur 2. The frequency with which defects occur 3. The process capability that governs the creation of defects 4. Potential impact faulty measurements can have on a project's success In the Six Sigma project on parts failing after final machine delivery, in the assess phase the product yield was determined. The number of defects was collected to get the overall defect yield. This was then used to calculate the sigma value. In the Evaluate phase, the Breakthrough Strategy offers specific statistical methods and tools to isolate key pieces of information that are critical to explaining the number of defective products. In the Evaluate phase, practical business problems are turned into statistical problems. To conclude, data evaluation steps include: 1. Analyzing the data 2. Identifying & confirming key process factors Enhance Phase In the Enhance phase, the Implementation Strategy focuses on discovering the key variables that cause the problem. The Enhance phase encompasses the process known as Design for Six Sigma (DFSS), as well. Using DFSS, the processes that create the products or services are designed from the beginning or reconfigured in such a way that they produce six sigma-quality goods and services. To summarize, steps included in this phase are: 1. Develop ideas to remove root causes 2. Trail & test the solution(s) 3. Implement & standardize the solution(s)
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. 4. Ensure error-proofing techniques are applied to the solution(s) Explore the use of Lean tools Control Phase Finally, in the Control phase, the Breakthrough Strategy ensures that the same problems don't reoccur by continually monitoring the processes that create the product or service. In this phase you would have to: 1. Establish standard measures to maintain performance 2. Monitor the process & continually improve it 3. Explore the use of further Lean Tools Control charts and audits can be used to control processes. Case Study We shall now use these concepts and reduce defect density in Actix, a company we had talked of earlier while discussing Six Sigma for Services. A quick recap Actix is a Utah based financial service provider. As a part of its services, it manages the accounts related functions for its clients. The management in Actix noticed that most of the customer complaints were related to vouchers handled by the company. Planning Phase To reduce the number of customer complaints, the company decided to reduce the number of errors in the vouchers. The first step was to identify the errors that are Critical to Quality (CTQ). The CTQs identified in the accounts department were errors pertaining to Amount, Tax, Code and Date. Assess Phase Next the team calculated the defects per million opportunities as 30,000 ppm. Which meant that the company was at that stage functioning at Sigma level 3.35. The company should aim to reach a Six Sigma level by reducing the defect density to 3.4 ppm.
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. Assess Phase An important question that needed to be addressed was that of which CTQ contributed the most to the total count of errors. A Pareto diagram drawn to show the frequency of each of these CTQs is given below. The next step would be to analyze and find out various causes for Wrong entry of Tax in the vouchers. We can use the Cause and Effect diagram to arrive at the causes. Evaluate Phase The team studied the various causes and narrowed down to the root cause: - Applicability not understood by all in the same manner To verify that this was the root cause, the team conducted a quiz to test the knowledge of applicability for all the concerned people. Poor performance in the quiz was proof enough of the fact that many employees involved lacked a proper comprehensive understanding of the technique of tax calculation. Enhance Phase Since large number of people were involved in this operation, the team was faced with the challenge of designing and implementing a solution that would not cause high turnover, yet train the employees without investing too much on training; and if possible, use a training method that would be reusable. Hence they decided to create an easy to use Computer based training program that was mandatory for every employee. A team of two people was given the responsibility to update the CBT on a regular basis. An employee was allowed to prepare vouchers only after he underwent a test on the CBT. Control Phase The company strictly implemented the training schedule for the next six weeks. After six months they took a sample of 1000 vouchers and checked the defect level. The defect density was found to be 14 across 1000 vouchers. Therefore, defects per voucher = 14/1000 = 0.014 And Defect per CTQ = 0.014 /4 = 0.0035 This value when expressed in terms of Defects per million opportunities is 3500 DPMO, i.e., approximately 4.2 Sigma.
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. This success motivated the personnel to further apply the principles of Problem Solving on a continuous basis to move towards a Six Sigma level. By continuously improving the process, the company can manage to reach the Six Sigma level, where they would report only 3.4 DPMO. However, they realized that to improve further from 4.2 Sigma, the efforts involved would be much more rigorous than what they had put in as of now. When is a company a Six Sigma company? Six Sigma implementation happens in a phased manner. Each department identified four Critical to Quality parameters; Tax, Amount, Code and Date which are major factors that contributed towards the total number of errors in a voucher. Step 1. Six Sigma Characteristic In the first step the company would try to implement Six Sigma for each of these characteristics and reduce errors. That is to say, that the Account department should reduce errors related to calculating Tax in the voucher, to writing the amount, the Code and the date. Step 2. Six Sigma Part or Product By applying the Plan, Assess, Evaluate, Enhance and Control phases for every characteristic of the voucher, the overall process comes under Six Sigma. Thus by removing all possible types of errors, the voucher itself would show no error. The voucher here is the Part. Step 3. Six Sigma Department The Accounts department should then identify every output or service that it provides and measure it using some unit, such as errors in payment cheques, errors in PF calculations, IT calculations, cycle time to release employees’ pay etc. Each of these should be enhanced to finally bring all the services and products in the department under Six Sigma. Step 4. Six Sigma Company By bringing all the departments in the company under Six Sigma, the entire company becomes a Six Sigma company.
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6 © Copyright 2004, All Rights Reserved. Edutech Dimensions Pvt. Ltd. Summary 1. Eight fundamental steps of Six Sigma Breakthrough Strategy are Recognize, Define, Assess, Analyze, Improve, Control, Standardize and Integrate 2. Of these the five core phases are most important 3. Plan Phase: Which project should be analyzed and improved? 4. Assess Phase: What is the capability of the process? 5. Analyze phase: When and where do defects occur? 6. Improve phase: What are the vital factors? 7. Control phase: What control can be put in place to sustain the gain? 8. The Six Sigma implementation is phased and follows the following pattern: • Six Sigma Characteristic • Six Sigma Part • Six Sigma Product • Six Sigma Department • Six Sigma Company
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