3. QualityGurus.com
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
5. QualityGurus.com
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.
Pilot’s Six-Sigma
Performance
6. QualityGurus.com
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.
7. QualityGurus.com
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.
8. QualityGurus.com
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
9. QualityGurus.com
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?
Management Involvement?
10. QualityGurus.com
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
11. QualityGurus.com
GE Six Sigma Economics
1996 1998 2000
2002
0
500
1000
1500
2000
2500
1996
Cost
Benefit
(in millions)
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
12. QualityGurus.com
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
13. QualityGurus.com
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:
Define, Measure, Analyse,
Improve and Control
It is Statistics
6 Sigma processes will
produce less than 3.4
defects per million
opportunities
15. QualityGurus.com
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
16. QualityGurus.com
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
19. QualityGurus.com
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
21. QualityGurus.com
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
22. QualityGurus.com
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)
23. QualityGurus.com
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
24. QualityGurus.com
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
25. QualityGurus.com
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
26. QualityGurus.com
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
28. QualityGurus.com
What are the forms of
waste?
1. Waste of Correction
2. Waste of Overproduction
3. Waste of processing
4. Waste of conveyance (or transport)
5. Waste of inventory
6. Waste of motion
7. Waste of waiting
29. QualityGurus.com
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
31. QualityGurus.com
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
32. QualityGurus.com
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.
33. QualityGurus.com
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, …
34. QualityGurus.com
6. Waste of Motion
Any movement of people, equipment,
information that does not contribute value
to product or service
35. QualityGurus.com
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.
36. QualityGurus.com
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
45. QualityGurus.com
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
46. QualityGurus.com
Add up the dots on the dice
0
0.05
0.1
0.15
0.2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Sum of dots
Probability
1 die
2 dice
3 dice
Here is why: Even outcomes that are equally
likely (like dice), when you add
them up, become bell shaped
Variability
47. QualityGurus.com
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
48. QualityGurus.com
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
49. QualityGurus.com
Limits
Process and Control limits:
Statistical
Process limits are used for individual items
Control limits are used with averages
Limits = μ ± 3σ
Define usual (common causes) & unusual (special
causes)
Specification limits:
Engineered
Limits = target ± tolerance
Define acceptable & unacceptable
50. QualityGurus.com
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
51. QualityGurus.com
More about limits
Good quality:
defects are
rare (Cpk>1)
Poor quality:
defects are
common (Cpk<1)
Cpk measures “Process Capability”
If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.
μ
target
μ
target
52. QualityGurus.com
Process capability
Good quality: defects are rare (Cpk>1)
Poor quality: defects are common (Cpk<1)
Cpk = min
USL – x
3σ
=
x - LSL
3σ
=
3σ = (UPL – x, or x – LPL)
= =
14 20 26
15 24
24 – 20
3(2)
= =.667
20 – 15
3(2)
= =.833
53. QualityGurus.com
1 12
2 3 4 5 6 7 8 9 10 11
1
1
1
1
1
1
6
LSL USL
+6
-6
A Six Sigma Process –
Predictably twice as good as what the
customer wants
63. QualityGurus.com
DMAIC - simplified
Define
What is important?
Measure
How are we doing?
Analyze
What is wrong?
Improve
Fix what’s wrong
Control
Ensure gains are maintained
to guarantee performance
64. QualityGurus.com
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
66. QualityGurus.com
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
67. QualityGurus.com
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
68. QualityGurus.com
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.
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
69. QualityGurus.com
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
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
70. QualityGurus.com
Omitting a step in
DMAIC?
Step Consequences if the step is
omitted
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
71. QualityGurus.com
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
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
Tools for DMAIC
73. QualityGurus.com
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.
6 Training
75. QualityGurus.com
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)
6 Training
Week
1
76. QualityGurus.com
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
77. QualityGurus.com
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
78. QualityGurus.com
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
79. QualityGurus.com
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
Black Belt
80. QualityGurus.com
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
81. QualityGurus.com
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
82. QualityGurus.com
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.
83. QualityGurus.com
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
85. QualityGurus.com
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?
86. QualityGurus.com
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?
87. QualityGurus.com
As a team List down at least 20 improvement
projects related to your work areas …….
A Problem Statement should be SMART:
Specific - It does not solve world hunger
Measurable - It has a way to measure success
Achievable - It is possible to be successful
Relevant - It has an impact that can be
quantified
Timely - It is near term not off in the future
Project Selection
88. QualityGurus.com
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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
89. QualityGurus.com
Types of Savings
Hard Savings:
Cost Reduction
Energy Saving
Raw Material saving
Reduced Rejection, Waste, Repair
Revenue Enhancement
Increased production
Yield Improvement
Quality Improvement
90. QualityGurus.com
Hard Savings:
Cash flow improvement
Reduced cash tied up in inventory
Reduced late receivables, early payables
Reduced cycle time
Cost and Capital avoidance
Optimizing the current system / resources
Reduced maintenance costs
Types of Savings
92. QualityGurus.com
Cost of implementing
Direct Payroll
Full time (Black Belts, Master Black Belts)
Indirect Payroll
Time by executives, team members, data
collection
Training and Consulting
Black Belt course, Overview for Mgmt etc.
Improvement Implementation Costs
Installing new solution, IT driven solutions
etc.
93. QualityGurus.com
What Qualifies as a
Six Sigma Project
Three basic qualifications:
-There is a gap between current and desired
/ needed performance.
The cause of problem is not clearly
understood.
The solution is not pre-determined, nor is
the optimal solution apparent.
How many projects out of 20 now
qualify as Six sigma projects?
