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Six Sigma For Managers (Explore HR.Org)

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Six Sigma Project Tutorial developed specifically for Business/ Project Managers, Individual Stakeholders under the executive cubicle irrespective of the vertical, a must read to gain the insight.

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Six Sigma For Managers (Explore HR.Org)

  1. 1. Six Sigma forSix Sigma for ManagersManagers KAUSTAV LAHIRI (BENCHMARK SIX SIGMA).KAUSTAV LAHIRI (BENCHMARK SIX SIGMA).
  2. 2. 2www.exploreHR.org Contents :Contents : • Six Sigma : An OverviewSix Sigma : An Overview • What is Six Sigma?What is Six Sigma? • Why Six Sigma?Why Six Sigma? • Six Sigma Phases : Define, Measure, Analyze,Six Sigma Phases : Define, Measure, Analyze, Improve and ControlImprove and Control • Tools and Key Roles for Six SigmaTools and Key Roles for Six Sigma If you find this presentation useful, please consider telling others about our site (www.exploreHR.org)(www.exploreHR.org)
  3. 3. 3www.exploreHR.org Why Six Sigma?Why Six Sigma?
  4. 4. 4www.exploreHR.org What is Sigma ?What is Sigma ? SigmaSigma A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of a process
  5. 5. 5www.exploreHR.org What is Six Sigma?What is Six Sigma? SixSix SigmaSigma A statistical concept that measures a process in terms of defects – at the six sigma level, there 3.4 defects per million opportunities A philosophy and a goal : as perfect as practically possible A methodology and a symbol of quality
  6. 6. 6www.exploreHR.org Sigma LevelSigma Level Sigma Level (Process Capability) Defects per Million Opportunities 2 308,537 3 66,807 4 6,210 5 233 6 3.4
  7. 7. 7www.exploreHR.org Sigma LevelSigma Level Six Sigma = 99,9997%
  8. 8. 8www.exploreHR.org Sigma LevelSigma Level • Every hour the postal service would lose 20,000 pieces of mail • Every day our drinking water would be unsafe for almost 15 minutes • Every week there would be 5,000 surgical operations that go wrong in some way • Every month we would be without electricity for almost seven hours Why not Four Sigma or 99.379% ?
  9. 9. 9www.exploreHR.org Why Six Sigma?Why Six Sigma? Money Customer Satisfaction Growth Quality Competitive Advantage Employee Pride
  10. 10. 10www.exploreHR.org • At GE, Six Sigma added more than $ 2 billion to theAt GE, Six Sigma added more than $ 2 billion to the bottom line in 1999 alonebottom line in 1999 alone • Motorola saved more than $ 15 billion in the first 10Motorola saved more than $ 15 billion in the first 10 years of its Six Sigma effortyears of its Six Sigma effort • AlliedSignal reports saving $ 1,5 billion through SixAlliedSignal reports saving $ 1,5 billion through Six Sigma.Sigma. Why Six Sigma?Why Six Sigma?
  11. 11. 11www.exploreHR.org Why Six Sigma?Why Six Sigma? Six Sigma is about practices that help you eliminate defects and always deliver products and services that meet customer specifications
  12. 12. 12www.exploreHR.org Cost of Poor QualityCost of Poor Quality What is cost of scrap?What is cost of scrap? What is cost of rework?What is cost of rework? What is cost of excessive cycle times andWhat is cost of excessive cycle times and delays?delays?
  13. 13. 13www.exploreHR.org Cost of Poor QualityCost of Poor Quality What is cost of business lost becauseWhat is cost of business lost because customers are dissatisfied with yourcustomers are dissatisfied with your products or services?products or services? What is cost of opportunities lost becauseWhat is cost of opportunities lost because you didn’t have time or the resources to takeyou didn’t have time or the resources to take advantage of them?advantage of them?
  14. 14. 14www.exploreHR.org Critical-to-Quality (CTQ)Critical-to-Quality (CTQ) Elements of a process that significantly affect the output of that process. Identifying these elements is figuring out how to make improvements that can dramatically reduce costs and enhance quality.
  15. 15. 15www.exploreHR.org Six Sigma PhasesSix Sigma Phases
  16. 16. 16www.exploreHR.org Define Measure Analyze Improve Control Six Sigma PhasesSix Sigma Phases D M A I CD M A I C
  17. 17. 17www.exploreHR.org Define Measure Analyze Six Sigma PhasesSix Sigma Phases Define the project goals and customer (internal and external) deliverables Measure the process to determine current performance Analyze and determine the root cause(s) of the defects
  18. 18. 18www.exploreHR.org Improve Control Six Sigma PhasesSix Sigma Phases Control future process performance Improve the process by eliminating defects
  19. 19. 19www.exploreHR.org Six Sigma PhasesSix Sigma Phases Define • Define Customers and Requirements (CTQs) • Develop Problem Statement, Goals and Benefits • Identify Champion, Process Owner and Team • Define Resources • Evaluate Key Organizational Support • Develop Project Plan and Milestones • Develop High Level Process Map
  20. 20. 20www.exploreHR.org Six Sigma PhasesSix Sigma Phases Measure • Define Defect, Opportunity, Unit and Metrics • Detailed Process Map of Appropriate Areas • Develop Data Collection Plan • Validate the Measurement System • Collect the Data • Begin Developing Y=f(x) Relationship • Determine Process Capability and Sigma Baseline
  21. 21. 21www.exploreHR.org Six Sigma PhasesSix Sigma Phases Analyze • Define Performance Objectives • Identify Value/Non-Value Added Process Steps • Identify Sources of Variation • Determine Root Cause(s) • Determine Vital Few x's, Y=f(x) Relationship
  22. 22. 22www.exploreHR.org Six Sigma PhasesSix Sigma Phases Improve • Perform Design of Experiments • Develop Potential Solutions • Define Operating Tolerances of Potential System • Assess Failure Modes of Potential Solutions • Validate Potential Improvement by Pilot Studies • Correct/Re-Evaluate Potential Solution
  23. 23. 23www.exploreHR.org Six Sigma PhasesSix Sigma Phases Control • Define and Validate Monitoring and Control System • Develop Standards and Procedures • Implement Statistical Process Control • Determine Process Capability • Develop Transfer Plan, Handoff to Process Owner • Verify Benefits, Cost Savings/Avoidance, Profit Growth • Close Project, Finalize Documentation • Communicate to Business, Celebrate
  24. 24. 24www.exploreHR.org Define Measure Analyze Improve Control Deliverables :Deliverables : • Fully trained team is formed, supported, and committed to work on improvement project. • Team charter developed, customers identified and high impact characteristics (CTQs) defined, business process mapped.
  25. 25. 25www.exploreHR.org Checkpoints for ReadinessCheckpoints for Readiness Team Readiness :Team Readiness : • Team is sponsored by a champion or business leader. • Team formed and team leaders assigned. • Improvement team members fully trained on Six Sigma and DMAIC. Define Measure Analyze Improve Control Team Charter :Team Charter : • Completed project management charter, including business case, problem and goal statements, project scope, milestones, roles and responsibilities, communication plan.
  26. 26. 26www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness CustomersCustomers • Customer(s) identified and segmented according to their different needs and requirements. • Data collected and displayed to better understand customer(s) critical needs and requirements. Business Process MappingBusiness Process Mapping • Completed, verified, and validated high-level 'as is' (not 'should be' or 'could be') business process map. • Completed SIPOC representation, describing the Suppliers, Inputs, Process, Outputs, and Customers.
  27. 27. 27www.exploreHR.org Define Measure Analyze Improve Control Deliverables :Deliverables : • Key measures identified, data collection planned and executed, process variation displayed and communicated, performance baselined, sigma level calculated.
  28. 28. 28www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Key Measures IdentifiedKey Measures Identified • Key measures identified and agreed upon. • High impact defects defined and identified in the business process. Data Collection Planned and ExecutedData Collection Planned and Executed • Solid data collection plan established that includes measurement systems analysis. • Data collected on key measures that were identified.
  29. 29. 29www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Process Variation Displayed/CommunicatedProcess Variation Displayed/Communicated • Process variation components displayed/communicated using suitable charts, graphs, plots. • Long term and short term variability accounted for. Performance Baseline/Sigma CalculationPerformance Baseline/Sigma Calculation • Measure baseline process performance (capability, yield, sigma level).
  30. 30. 30www.exploreHR.org Define Measure Analyze Improve Control Deliverables :Deliverables : • Data and process analysis, root cause analysis, quantifying the gap/opportunity.
  31. 31. 31www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Data and Process AnalysisData and Process Analysis • Identify gaps between current performance and the goal performance. Root Cause AnalysisRoot Cause Analysis • Generate list of possible causes (sources of variation). • Segment and stratify possible causes (sources of variation). • Prioritize list of 'vital few' causes (key sources of variation). • Verify and quantify the root causes of variation.
  32. 32. 32www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Quantifying the Gap/OpportunityQuantifying the Gap/Opportunity • Determine the performance gap. • Display and communicate the gap/opportunity in financial terms.
  33. 33. 33www.exploreHR.org Define Measure Analyze Improve Control Deliverables :Deliverables : • Generate (and test) possible solutions, select the best solutions, design implementation plan.
  34. 34. 34www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Generating (and Testing) Possible SolutionsGenerating (and Testing) Possible Solutions • Possible solutions generated and tested.
  35. 35. 35www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Selecting The Best Solution(s)Selecting The Best Solution(s) • Optimal solution selected based on testing and analysis. • New and improved process ('should be') maps developed. • Cost/benefit analysis of optimal solution(s). • Small-scale pilot for proposed improvement(s). • Pilot data collected and analyzed. • Improved process ('should be') maps modified based on pilot data and analysis. • Project impact on utilizing the best solution(s).
  36. 36. 36www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Designing Implementation PlanDesigning Implementation Plan • Solution implementation plan established, including schedule/work breakdown structure, resources, risk management plan, cost/budget, and control plan. • Contingency plan established.
  37. 37. 37www.exploreHR.org Define Measure Analyze Improve Control Deliverables :Deliverables : • Documented and implemented monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure).
  38. 38. 38www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Monitoring PlanMonitoring Plan • Control plan in place for sustaining improvements (short and long- term). Process StandardizationProcess Standardization • New process steps, standards, and documentation are ingrained into normal operations. Documented ProceduresDocumented Procedures • Operating procedures are consistent. • Knowledge gained on process is shared and institutionalized.
  39. 39. 39www.exploreHR.org Define Measure Analyze Improve Control Checkpoints for ReadinessCheckpoints for Readiness Response PlanResponse Plan • Response plans established, understood, and deployed. Transfer of Ownership (Project Closure)Transfer of Ownership (Project Closure) • Transfer ownership and knowledge to process owner and process team tasked with the responsibilities.
  40. 40. 40www.exploreHR.org Tools and Roles forTools and Roles for Six SigmaSix Sigma
  41. 41. 41www.exploreHR.org • Creating flowcharts of the step in a process – operations, decision points, delays, movements, handoffs, rework, loops, and controls or inspections. • A process map is illustrated description of how a process work. Tools for Six SigmaTools for Six Sigma ProcessProcess MappingMapping
  42. 42. 42www.exploreHR.org • DOE is a structured, organized method for determining the relationship between factors (Xs) affecting a process and the output of that process (Y). Tools for Six SigmaTools for Six Sigma Design ofDesign of ExperimentsExperiments or DOEor DOE
  43. 43. 43www.exploreHR.org • A group of rows and columns, with one set of increments marked along the X (horizontal) axis and another set of increments marked along the Y (vertical) axis. • The purpose of using XY matrix is to study and understand the relationship between what you are putting into a process and what your customer is getting out of it. • The XY matrix allows the team to identify gaps, areas for improvement. Tools for Six SigmaTools for Six Sigma XY MatrixXY Matrix
  44. 44. 44www.exploreHR.org • The goal of this tool is to ensure that your measurement system is statically confident – that it’s both accurate and precise each and every time it is used. • Undertaken during Measure phase, your MSA determines whether or not you can take a certain measurement and repeat or reproduce it among different people who take the same measurement. Tools for Six SigmaTools for Six Sigma MeasurementMeasurement SystemSystem AnalysisAnalysis
  45. 45. 45www.exploreHR.org • Process capability tool is the measure of a process being able to meet specification requirements and fulfill customer CTQ needs on a long term basis. Tools for Six SigmaTools for Six Sigma ProcessProcess CapabilityCapability ToolTool
  46. 46. 46www.exploreHR.org • Investigating a theory about the suspected cause (s) of a particular effect in a process to determine if it is correct. • It’s a compass that points you directly to the vital few factors that are most affecting your process. Tools for Six SigmaTools for Six Sigma HypothesisHypothesis TestingTesting
  47. 47. 47www.exploreHR.org • The manner in which a part or process can fail to meet a specification, creating a defect or non-conformance, and the impact on the customer if that failure mode is not prevented or corrected. Tools for Six SigmaTools for Six Sigma FailureFailure Mode EffectMode Effect AnalysisAnalysis
  48. 48. 48www.exploreHR.org • A detailed assessment and guide for maintaining all the positive changes you, your black belt, and the project team have made. • It ensures that all your analysis and efforts stay in effect and that you have information at your disposal to prevent backsliding or a return to less than optimal performance standard. Tools for Six SigmaTools for Six Sigma ControlControl PlanPlan
  49. 49. 49www.exploreHR.org ChampionsChampions Are responsible for the Six Sigma implementation across the organization in an integrated manner. Champions also act as mentor to Black Belts. Includes CEO and other key top management team members. They are responsible for setting up a vision for Six Sigma implementation. Key Roles for Six SigmaKey Roles for Six Sigma ExecutiveExecutive LeadershipLeadership
  50. 50. 50www.exploreHR.org Black BeltsBlack Belts Operate under Master Black Belts to apply Six Sigma methodology to specific projects. They primarily focus on Six Sigma project execution. Identified by champions, act as in-house expert coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma. Key Roles for Six SigmaKey Roles for Six Sigma MasterMaster Black BeltsBlack Belts
  51. 51. 51www.exploreHR.org Are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts and support them in achieving the overall results. Key Roles for Six SigmaKey Roles for Six Sigma Green BeltsGreen Belts
  52. 52. 52www.exploreHR.org Six Sigma Do’sSix Sigma Do’s • Do communicate the commitment company-Do communicate the commitment company- widewide • Do demonstrate the commitment of companyDo demonstrate the commitment of company leadersleaders • Do empower your key human resourcesDo empower your key human resources • Do provide on-site mentoring for black beltsDo provide on-site mentoring for black belts
  53. 53. 53www.exploreHR.org Six Sigma Do’sSix Sigma Do’s • Do be patient at the inception of you six SigmaDo be patient at the inception of you six Sigma initiativeinitiative • Do claim and advertise early “wins”Do claim and advertise early “wins” • Do benchmarkDo benchmark • Do establish project baseline and goalsDo establish project baseline and goals
  54. 54. 54www.exploreHR.org Recommended Further Readings: 1. Greg Brue, Six Sigma for Managers, McGraw Hill 2. George Eckes, Six Sigma for Everyone, John Wiley and Sons
  55. 55. 55www.exploreHR.org End of Material

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