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Six sigma for managers


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Six sigma for managers

  1. 1. Six Sigma forManagers
  2. 2. If you find this presentation useful, please consider telling others about our site ( Contents : • Six Sigma : An Overview • What is Six Sigma? • Why Six Sigma? • Six Sigma Phases : Define, Measure, Analyze, Improve and Control • Tools and Key Roles for Six 2
  3. 3. Why Six Sigma? 3
  4. 4. What is Sigma ? A term used in statistics to represent Sigma standard deviation, an indicator of the degree of variation in a set of a 4
  5. 5. What is Six Sigma? A statistical concept that measures a process in terms of defects – at the six sigma level, there 3.4 defects per Six million opportunities Sigma A philosophy and a goal : as perfect as practically possible A methodology and a symbol of 5
  6. 6. Sigma Level Sigma Level Defects per Million (Process Opportunities Capability) 2 308,537 3 66,807 4 6,210 5 233 6 6
  7. 7. Sigma Level Six Sigma = 99, 7
  8. 8. Sigma Level • Every hour the postal service Why not Four would lose 20,000 pieces of mail Sigma or • Every day our drinking water would 99.379% ? 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 8
  9. 9. Why Six Sigma? Money Quality Customer Competitive Satisfaction Advantage Growth Employee 9
  10. 10. Why Six Sigma? • At GE, Six Sigma added more than $ 2 billion to the bottom line in 1999 alone • Motorola saved more than $ 15 billion in the first 10 years of its Six Sigma effort • AlliedSignal reports saving $ 1,5 billion through Six 10
  11. 11. Why Six Sigma? Six Sigma is about practices that help you eliminate defects and always deliver products and services that meet customer 11
  12. 12. Cost of Poor Quality What is cost of scrap? What is cost of rework? What is cost of excessive cycle times and delays? 12
  13. 13. Cost of Poor Quality What is cost of business lost because customers are dissatisfied with your products or services? What is cost of opportunities lost because you didn’t have time or the resources to take advantage of them? 13
  14. 14. 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 14
  15. 15. Six Sigma 15
  16. 16. Six Sigma Phases Define Measure Analyze Improve DMAIC 16
  17. 17. Six Sigma Phases Define the project goals and customer Define (internal and external) deliverables Measure the process to determine current Measure performance Analyze and determine the root cause(s) Analyze of the 17
  18. 18. Six Sigma Phases Improve the process by eliminating defects Improve Control future process performance 18
  19. 19. Six Sigma Phases • Define Customers and Requirements (CTQs) Define • 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 19
  20. 20. Six Sigma Phases • Define Defect, Opportunity, Unit and Metrics Measure • 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 20
  21. 21. Six Sigma Phases • Define Performance Objectives Analyze • Identify Value/Non-Value Added Process Steps • Identify Sources of Variation • Determine Root Cause(s) • Determine Vital Few xs, Y=f(x) 21
  22. 22. Six Sigma Phases • Perform Design of Experiments Improve • 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 22
  23. 23. Six Sigma Phases • Define and Validate Monitoring and Control System Control • 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, 23
  24. 24. Define Measure Analyze Improve Control 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 24
  25. 25. Define Measure Analyze Improve Control Checkpoints for 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. Team Charter : • Completed project management charter, including business case, problem and goal statements, project scope, milestones, roles and responsibilities, communication 25
  26. 26. Define Measure Analyze Improve Control Checkpoints for Readiness Customers • 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 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 26
  27. 27. Define Measure Analyze Improve Control Deliverables : • Key measures identified, data collection planned and executed, process variation displayed and communicated, performance baselined, sigma level 27
  28. 28. Define Measure Analyze Improve Control Checkpoints for Readiness Key Measures Identified • Key measures identified and agreed upon. • High impact defects defined and identified in the business process. Data Collection Planned and Executed • Solid data collection plan established that includes measurement systems analysis. • Data collected on key measures that were 28
  29. 29. Define Measure Analyze Improve Control Checkpoints for Readiness Process Variation Displayed/Communicated • Process variation components displayed/communicated using suitable charts, graphs, plots. • Long term and short term variability accounted for. Performance Baseline/Sigma Calculation • Measure baseline process performance (capability, yield, sigma level) 29
  30. 30. Define Measure Analyze Improve Control Deliverables : • Data and process analysis, root cause analysis, quantifying the gap/ 30
  31. 31. Define Measure Analyze Improve Control Checkpoints for Readiness Data and Process Analysis • Identify gaps between current performance and the goal performance. Root 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 31
  32. 32. Define Measure Analyze Improve Control Checkpoints for Readiness Quantifying the Gap/Opportunity • Determine the performance gap. • Display and communicate the gap/opportunity in financial 32
  33. 33. Define Measure Analyze Improve Control Deliverables : • Generate (and test) possible solutions, select the best solutions, design implementation 33
  34. 34. Define Measure Analyze Improve Control Checkpoints for Readiness Generating (and Testing) Possible Solutions • Possible solutions generated and 34
  35. 35. Define Measure Analyze Improve Control Checkpoints for Readiness 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) 35
  36. 36. Define Measure Analyze Improve Control Checkpoints for Readiness Designing Implementation Plan • Solution implementation plan established, including schedule/work breakdown structure, resources, risk management plan, cost/budget, and control plan. • Contingency plan 36
  37. 37. Define Measure Analyze Improve Control Deliverables : • Documented and implemented monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure) 37
  38. 38. Define Measure Analyze Improve Control Checkpoints for Readiness Monitoring Plan • Control plan in place for sustaining improvements (short and long- term). Process Standardization • New process steps, standards, and documentation are ingrained into normal operations. Documented Procedures • Operating procedures are consistent. • Knowledge gained on process is shared and 38
  39. 39. Define Measure Analyze Improve Control Checkpoints for Readiness Response Plan • Response plans established, understood, and deployed. Transfer of Ownership (Project Closure) • Transfer ownership and knowledge to process owner and process team tasked with the 39
  40. 40. Tools and Roles for Six 40
  41. 41. Tools for Six Sigma • Creating flowcharts of the step in a process Process – operations, decision points, delays, Mapping movements, handoffs, rework, loops, and controls or inspections. • A process map is illustrated description of how a process 41
  42. 42. Tools for Six Sigma • DOE is a structured, organized method for Design of determining the relationship between Experiments factors (Xs) affecting a process and the or DOE output of that process (Y) 42
  43. 43. Tools for Six Sigma • A group of rows and columns, with one set XY Matrix 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 43
  44. 44. Tools for Six Sigma • The goal of this tool is to ensure that your Measurement measurement system is statically confident System – that it’s both accurate and precise each Analysis 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 44
  45. 45. Tools for Six Sigma • Process capability tool is the measure of a Process process being able to meet specification Capability requirements and fulfill customer CTQ Tool needs on a long term 45
  46. 46. Tools for Six Sigma • Investigating a theory about the suspected Hypothesis cause (s) of a particular effect in a process Testing to determine if it is correct. • It’s a compass that points you directly to the vital few factors that are most affecting your 46
  47. 47. Tools for Six Sigma • The manner in which a part or process can Failure fail to meet a specification, creating a Mode Effect defect or non-conformance, and the impact Analysis on the customer if that failure mode is not prevented or 47
  48. 48. Tools for Six Sigma • A detailed assessment and guide for Control maintaining all the positive changes you, Plan 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 48
  49. 49. Key Roles for Six Sigma Executive Includes CEO and other key top management Leadership team members. They are responsible for setting up a vision for Six Sigma implementation. Champions Are responsible for the Six Sigma implementation across the organization in an integrated manner. Champions also act as mentor to Black 49
  50. 50. Key Roles for Six Sigma Master Identified by champions, act as in-house expert Black Belts coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma. Black Belts Operate under Master Black Belts to apply Six Sigma methodology to specific projects. They primarily focus on Six Sigma project 50
  51. 51. Key Roles for Six Sigma Green Belts 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 51
  52. 52. Six Sigma Do’s • Do communicate the commitment company- wide • Do demonstrate the commitment of company leaders • Do empower your key human resources • Do provide on-site mentoring for black 52
  53. 53. Six Sigma Do’s • Do be patient at the inception of you six Sigma initiative • Do claim and advertise early “wins” • Do benchmark • Do establish project baseline and 53
  54. 54. Recommended Further Readings: 1. Greg Brue, Six Sigma for Managers, McGraw Hill 2. George Eckes, Six Sigma for Everyone, John Wiley and 54
  55. 55. End of 55