Introduction to six sigma (www.gotoaims.com)

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Introduction to six sigma (www.gotoaims.com)

  1. 1. Introduction To Six Sigma Asadullah Malik M.Sc. (Computer Eng), P.Eng., MBA, PMP, ASQ-CMQ/OE Director & Chief Trainer, AIMS Inc. (www.GoToAIMS.com) Prepared By: Asadullah Malik, PMP, P.Eng.
  2. 2. Introduction <ul><li>Six Sigma is a quality improvement tool to achieve perfection in organizational processes, by either redesigning business processes or providing incremental process improvements. The term “Six Sigma” was coined by Bill Cohen, an engineer at Motorola in 1980s. </li></ul><ul><li>Sigma is a measure of “perfection” relating to process performance capability. Literally, Six Sigma means achieving a quality level of 3.4 DPMO (Defects Per Million Opportunities) which translates to a perfection level of 99.9997%. </li></ul><ul><li>Six Sigma is more effective tool, as compared to traditional quality improvement tools, because of following six factors: </li></ul><ul><ul><li>Customer Focused Approach </li></ul></ul><ul><ul><li>Project Based Approach </li></ul></ul><ul><ul><li>Process Based Approach </li></ul></ul><ul><ul><li>Quantitative Approach </li></ul></ul><ul><ul><li>Commitment from all to create “Shared Ownership & Responsibility” </li></ul></ul><ul><ul><li>Comprehensiveness </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  3. 3. Why Shall We Apply Six Sigma? <ul><li>To remain profitable we need to reduce cost of designing and producing products through projects. </li></ul><ul><li>Say, if the capability of our processes is 3 Sigma, then it means we are loosing 25%- 40% of our sales revenue as the Cost of Poorly Performing Processes (CP 3 ). </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.  level DPMO CP 3 as % of Sales 2 308,537 Not Applicable 3 66,807 25%- 40% 4 6,210 15%- 25% 5 233 5%- 15% 6 3.4 < 1%
  4. 4. Approach & Methodologies <ul><li>Six Sigma approach is that there is no such thing as operator error, because </li></ul><ul><li>It is Processes – Not People that Fail </li></ul><ul><li>Essence of Six Sigma is that if you can measure how many “defects” you have in the processes, through quantified metrics management, then you can plan and systematically determine how to approach “zero defects”. </li></ul><ul><li>We won’t know until we measure, </li></ul><ul><li>We don’t measure what we don’t value. </li></ul><ul><li>Six Sigma essentially applies two methodologies: </li></ul><ul><ul><li>DMAIC – Define, Measure, Analyze, Improve, Control </li></ul></ul><ul><ul><li>It is the methodology to focus on high priority problem areas for injecting process improvements. </li></ul></ul><ul><ul><li>Design For Six Sigma a.k.a DMADOV – Define, Measure, Analyze, Design, Optimize, Verify </li></ul></ul><ul><ul><li>It is the methodology to predict and improve design quality during the early design phases, instead of fixing problems further down the road. </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  5. 5. Design For Six Sigma (DMADOV) <ul><li>Define – Customer requirements for the process, product, service. </li></ul><ul><li>Measure – Performance to match customer requirements. </li></ul><ul><li>Analyze – To assess that design is resource efficient and robust to process variations. </li></ul><ul><li>Design – New processes for implementing the new design. </li></ul><ul><li>Optimize – To reduce variation by repeatable processes. </li></ul><ul><li>Verify – Results and maintain performance. </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng. Define Design Analyze Measure Verify Optimize
  6. 6. DMAIC Methodology <ul><ul><li>Five phases of DMAIC methodology: </li></ul></ul><ul><ul><ul><li>Define the problem and customer requirements. </li></ul></ul></ul><ul><ul><ul><li>Measure defect rates and document the current process. </li></ul></ul></ul><ul><ul><ul><li>Analyze process data and determine the process capability. </li></ul></ul></ul><ul><ul><ul><li>Improve the process and remove the causes of defects. </li></ul></ul></ul><ul><ul><ul><li>Control process performance to ensure that defects don’t recur. </li></ul></ul></ul>A Prepared By: Asadullah Malik, PMP, P.Eng. Voice of the Customer Measure Improve Analyze Control Define Institutionalize
  7. 7. Define <ul><li>Tools </li></ul><ul><li>High level process maps </li></ul><ul><li>High level Pareto charts </li></ul><ul><li>Idea generation & categorization tools: </li></ul><ul><ul><li>Balanced Score Card </li></ul></ul><ul><ul><li>Kano Model </li></ul></ul><ul><ul><li>QFD (Quality Function Deployment) also called House of Quality </li></ul></ul><ul><ul><li>Surveys & Benchmarking </li></ul></ul><ul><li>Outputs </li></ul><ul><li>Problem Statement </li></ul><ul><li>Project Charter </li></ul><ul><li>Roles and Responsibilities </li></ul><ul><li>Established and quantifiable metrics </li></ul><ul><li>Inputs </li></ul><ul><li>Need for Six Sigma project </li></ul><ul><li>Executive Management Sponsorship </li></ul><ul><li>(Deployment Champion) </li></ul><ul><li>Identification of Core Team: </li></ul><ul><ul><li>SS Black Belt </li></ul></ul><ul><ul><li>SS Green Belt </li></ul></ul><ul><ul><li>Project Team </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  8. 8. Balanced Scorecard <ul><li>Usually stakeholders have conflicting needs and to focus only on needs of a particular group is detrimental e.g. Cost Vs. Quality. </li></ul><ul><li>Balanced scorecard is a tool used to quantitatively measure goals of different stakeholders, and progressively elaborate goals into metrics. </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng. <ul><li>Y = Improve Customer Satisfaction </li></ul><ul><li>Better Quality (X 1 ) </li></ul><ul><li>Lower Cost (X 2 ) </li></ul>Y = f(X 1 , X 2 ) i.e. improving customer satisfaction is a function of better quality and lower cost <ul><li>X 1 = Better Quality </li></ul><ul><li>Manufacturing better product (X 11 ) </li></ul><ul><li>Better Customer Service (X 12 ) </li></ul><ul><li>X 11 = Manufacturing Better Product </li></ul><ul><li>Reducing Defects (X 111 ) </li></ul><ul><li>Providing additional features (X 112 ) </li></ul>X 1 = f(X 11 , X 12 ) i.e. providing better quality is a function of manufacturing better product and better customer service X 11 = f(X 111 , X 112 ) i.e. manufacturing better product is a function of reducing defects and providing additional features
  9. 9. Kano Model <ul><li>Kano Model is a useful tool for a design team to understand customer requirements and aspirations by classifying product characteristics into: </li></ul><ul><ul><li>Threshold Attributes : Non-availability of these would be a dis-satisfier. However, customers will remain indifferent if these attributes are available. </li></ul></ul><ul><ul><li>Performance Attributes : Customer satisfaction is proportional to their availability. </li></ul></ul><ul><ul><li>Attractive Attributes : Product features which delight the customer, and he gets ready to pay a premium for cutting edge technology with which he is not familiar. </li></ul></ul>Attributes Prepared By: Asadullah Malik, PMP, P.Eng.
  10. 10. Quality Function Deployment (QFD) Prepared By: Asadullah Malik, PMP, P.Eng.
  11. 11. Roles and Responsibilities <ul><li>At the end of Define phase, the six sigma project charter is created, project goals are known, therefore, the resources must be assigned with roles and responsibilities e.g. Green Belts serve as a liaison between the Black Belts and the project team. </li></ul><ul><li>A clearly role and responsibility matrix must be developed and communicated to all. </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng. Kick-Off Concept & Eval Design & Plan Dev & Imp Roll Out
  12. 12. Measure <ul><li>Tools </li></ul><ul><li>Data Collection Techniques (e.g. NGT, Multi-voting FFA, JAD etc.) </li></ul><ul><li>Project Planning Tools (e.g. PERT, PND, Pareto chart.) </li></ul><ul><li>Process Cost Control </li></ul><ul><li>Measurement and Validation Tools (e.g. (SPC tools and Gauge R&R study) </li></ul><ul><li>Detailed Process Maps & Flowcharts </li></ul><ul><li>Outputs </li></ul><ul><li>Well-defined Processes </li></ul><ul><li>Baseline Process Capability </li></ul><ul><li>Cost of Poor Quality (COPQ) </li></ul><ul><li>Measurement Systems </li></ul><ul><li>Inputs </li></ul><ul><li>(Outputs of Define Phase) </li></ul><ul><li>Roles and Responsibilities </li></ul><ul><li>Project Charter </li></ul><ul><li>Problem Statement </li></ul><ul><li>Stakeholder Requirements </li></ul><ul><li>Established Metrics </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  13. 13. Data Collection Techniques <ul><li>1. Nominal Group Technique (NGT) </li></ul><ul><li>Developed by Gustafson in 1971. NGT is used as a consensus planning tool to prioritize issues and facilitate decision making when creative solutions are sought. </li></ul><ul><ul><li>NGT Procedure: </li></ul></ul><ul><ul><ul><li>Team members write their ideas, without consulting others. </li></ul></ul></ul><ul><ul><ul><li>Inputs are publicly displayed and each person is asked to provide more clarification about their feedback in a round-robin feedback session. </li></ul></ul></ul><ul><ul><ul><li>Individuals vote privately on the priority of ideas, and the group decision is made based on voting. </li></ul></ul></ul><ul><ul><li>NGT Benefits: </li></ul></ul><ul><ul><ul><li>Balanced participation – reduces bias and conforming influence created in interacting groups. </li></ul></ul></ul><ul><ul><ul><li>Leads to greater sense of accomplishment for all participants - solutions are on a problem-solving basis rather than on a personal likeliness or assault basis. </li></ul></ul></ul><ul><li>2. Multi-Voting: </li></ul><ul><ul><li>After NGT, count the number of options and divide by 3. This will give number of potential votes per team member. </li></ul></ul><ul><ul><li>Each of the team member is asked to vote on the list of options. They can spread their vote across the options depending on how important they think the solution to be. Members can assign more than one votes to a particular option. </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  14. 14. Data Collection Techniques <ul><li>3. Force Field Analysis (FFA) </li></ul><ul><li>Developed by Kurt Lewin. The FFA technique can be used to align all facets of a desired change. Since six sigma involves changes in the organization, force field analysis helps in effectively managing such changes. Essence of FFA is to identify the “Driving Forces” and “Restraining Forces” for every proposed change. </li></ul><ul><ul><li>Driving Forces : They tend to initiate a change and keep it going and could include people, learned skills, tools (e.g. EPM), procedures etc. For example, for a technical project, increased productivity & lowering costs may be driving forces. </li></ul></ul><ul><ul><li>Restraining Forces : They tend to restrain the driving forces e.g. need for additional resources and training for a technical project. </li></ul></ul><ul><li>4. Joint Application Development (JAD) </li></ul><ul><li>A technique to gather team/customer requirements by making context diagrams. </li></ul><ul><li>5. Brainstorming Sessions and Surveys </li></ul><ul><li>To collect team feedback on some proposed methodologies. </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  15. 15. Project Planning Tools <ul><li>1. PERT (Project Evaluation & Review Technique) This technique uses a weighted average duration estimate to calculate activity durations. </li></ul>For more than one tasks (e.g. for a project where all tasks lie on the critical path) Prepared By: Asadullah Malik, PMP, P.Eng. Term Formula Used For One Task PERT Value (Expected duration) (Pessimistic+ 4*(Most Likely) + Optimistic) 6 Standard Deviation (Sigma) Pessimistic – Optimistic 6 Variance (Standard Deviation) 2 Term Formula Used PERT Value Sum of PERT Values of individual tasks Standard Deviation Sum of Variances of all the tasks Variance Sum of variances of all the tasks
  16. 16. Project Planning Tools <ul><li>2. Project Network Diagram (PND) This is a well known technique to calculate longest/critical path, slack for project tasks, and the project float. </li></ul><ul><li>3. Pareto Charts Based on the Pareto principle (80-20 rule), which states that a small % of causes (20%) is responsible for a large % of effects (80%). </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng. Task Name, Duration (D) Late Finish (LF) Early Finish (EF) Late Start (LS) Early Start (ES) EF = ES + D LS = LF - D
  17. 17. Process Cost Control <ul><li>Total Process Cost = Entitlement Cost + COPQ </li></ul><ul><ul><li>Entitlement Cost: The sum of process costs associated with producing the goods correctly the very first time. </li></ul></ul><ul><ul><li>Cost of Poor Quality (COPQ): Cost of rework by not doing correctly the first time & with producing low quality goods. </li></ul></ul><ul><li>Objective is to minimize the following four types of COPQ: </li></ul><ul><ul><ul><li>Appraisal Costs - Costs associated with monitoring and measuring quality parameters e.g. conducting quality audits, supplier management. </li></ul></ul></ul><ul><ul><ul><li>Internal Failure Costs - Correcting a low quality product e.g. costs associated with re-work, longer cycle time, higher inventory levels. </li></ul></ul></ul><ul><ul><ul><li>Prevention Costs - Preventing a low quality product from reaching final customer e.g. recall of commercialized products from carriers. </li></ul></ul></ul><ul><ul><ul><li>External Failure Costs – Cost impact if a low quality product reaches the market e.g. loss of goodwill, write-offs, service outage problems. </li></ul></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  18. 18. Measurement & Validation Tools <ul><li>Total Variation = Process Variation + Measurement Variation </li></ul><ul><li>Gauge R&R Study </li></ul><ul><ul><li>Repeatability : How consistently does the system measure an event over time? </li></ul></ul><ul><ul><li>Reproducibility : How consistently can several operators measure an event i.e. would different operators get same results while measuring the same event? </li></ul></ul><ul><li>Statistical Process Control (SPC) Tools </li></ul><ul><ul><li>Run Charts </li></ul></ul><ul><ul><li>Control Charts (various types of control charts are C,P, X, X-bar etc) </li></ul></ul><ul><ul><li>Scatter Diagrams </li></ul></ul><ul><ul><li>Frequency Histograms </li></ul></ul><ul><ul><li>Pareto and Flow charts </li></ul></ul><ul><ul><li>Process Capability Studies to ultimately find DPMO </li></ul></ul><ul><ul><li>Process capability studies distinguish between conformance to control limits (LCL, UCL) and conformance to specification limits (LSL, USL) dictated by customer. Ideally, the process capability (Cp) shall be more than 1.6 </li></ul></ul><ul><ul><li>Cause & Effect (Ishikawa) Diagram: Not used for measurement rather for analysis phase </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng. Cp = (USL - LSL)/
  19. 19. Analyze <ul><li>Tools </li></ul><ul><li>Failure Mode and Effects Analysis (FMEA) </li></ul><ul><li>Cause & Effect Diagram </li></ul><ul><li>Data Analysis </li></ul><ul><li>Hypothesis Testing </li></ul><ul><li>Outputs </li></ul><ul><li>Important causes of defects </li></ul><ul><li>Performance gaps </li></ul><ul><li>Special and common causes of variation </li></ul><ul><li>Cost and benefits of proposed solutions </li></ul><ul><li>Points of Failure </li></ul><ul><li>Inputs </li></ul><ul><li>Well-defined Process </li></ul><ul><li>Baseline Process Capability </li></ul><ul><li>Process parameters affecting CTQ </li></ul><ul><li>Cost of Poor Quality (COPQ) </li></ul><ul><li>Measurement Systems </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  20. 20. Objectives & Tools <ul><li>In Analyze phase, the three important objectives are: </li></ul><ul><ul><li>Analyzing the present system to identify OFIs. </li></ul></ul><ul><ul><li>Determining the failure points and associated risks for the proposed changes. </li></ul></ul><ul><ul><li>Analyzing how the process capability would improve after changes are institutionalized? </li></ul></ul><ul><li>FMEA </li></ul><ul><li> Information from Process Map, Ishikawa Diagram and QFD are used to create FMEA </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng. Process Map QFD Ishikawa Diagram Sum FMEA
  21. 21. Improve <ul><li>Tools </li></ul><ul><li>Solution Design Matrix </li></ul><ul><li>Design of Experiments </li></ul><ul><li>Response Surface Methodology </li></ul><ul><li>Taguchi Robustness concepts </li></ul><ul><li>Return on Investment (ROI) </li></ul><ul><li>Outputs </li></ul><ul><li>Cost/Benefit for different solutions </li></ul><ul><li>Selection of solutions for implementation </li></ul><ul><li>Implementation Plan </li></ul><ul><li>Inputs </li></ul><ul><li>Important causes of defects </li></ul><ul><li>Performance gaps </li></ul><ul><li>Special and common causes of variation </li></ul><ul><li>Cost and benefits of proposed solutions </li></ul><ul><li>Points of Failure </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  22. 22. Solution Design Matrix (SDM) <ul><li>SDM helps to find that how the proposed solutions compare with the existing system in meeting the specified criteria. </li></ul><ul><li>Steps to create SDM are: </li></ul><ul><ul><li>Identify a team having knowledge of the existing process and of proposed solutions. </li></ul></ul><ul><ul><li>On left side of matrix, write the key criteria on which the project will be evaluated. </li></ul></ul><ul><ul><li>Determine the benefit rating for each criteria by taking inputs from team members: </li></ul></ul><ul><ul><ul><li>Existing design is provided a rating of “0” on all the criteria. </li></ul></ul></ul><ul><ul><ul><li>New designs are provided a rating of “-1”, “0” or “1” where -1 indicates worse than existing design, 0 indicates same as existing design and 1 indicates better. </li></ul></ul></ul><ul><ul><li>Determine the importance rating for each criteria: This is done in a scale from 1 to 5. </li></ul></ul><ul><ul><li>Determine the sum or positives, sum of negatives, sum of zeroes, weighted sum of positives and weighted sum of negatives. </li></ul></ul><ul><ul><li>The project which has the highest value of weighted sum of positives minus weighted sum of negatives is selected. </li></ul></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  23. 23. Some Tools for Improve Phase <ul><li>R esponse Surface Methodology (RSM): </li></ul><ul><li>A statistical tool that uses quantitative data from Design of Experiments (DOE) to study, and optimize a process. </li></ul><ul><li>Taguchi Robustness Concepts: </li></ul><ul><li>Two types of variables that have impact on the processes: </li></ul><ul><ul><li>Controllable variables : Their impact on the process under study is predictable. Taguchi’s concepts helped in determining the settings for the controllable variables which minimize the variability of process. </li></ul></ul><ul><ul><li>Uncontrollable variables : How best the controllable variables be controlled to minimize effects of the uncontrollable variables? </li></ul></ul><ul><li>Return On Investment (ROI) </li></ul><ul><li>By the end of Improve phase, we have idea of the costs and benefits associated with all suggested options, so it helps to estimate ROI. </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  24. 24. Control <ul><li>Tools </li></ul><ul><li>Data Collection Methodology </li></ul><ul><li>Control Chart </li></ul><ul><li>Configuration Management </li></ul><ul><li>Kaizen </li></ul><ul><li>Kanban </li></ul><ul><li>5S </li></ul><ul><li>Repetition of MSA </li></ul><ul><li>Outputs </li></ul><ul><li>Implemented solutions </li></ul><ul><li>Revised Measurement System </li></ul><ul><li>Control Plan for sustaining benefits </li></ul><ul><li>Improved Process Capability </li></ul><ul><li>Lessons Learned </li></ul><ul><li>Inputs </li></ul><ul><li>Cost/Benefit for different solutions </li></ul><ul><li>Process Capability for proposed solutions </li></ul><ul><li>Selection of solutions for implementation </li></ul><ul><li>Implementation Plan </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  25. 25. Some Tools for Control Phase <ul><li>Configuration Management (CM) </li></ul><ul><li>Kaizen: Japanese word 'Kai' means continuous and 'zen' means improvement. </li></ul><ul><li>Kanban: It is methodology to “Pull” a product through development/production cycle. A card contains all the information required to be done on a product at each stage along its path to completion, and which parts are needed at each subsequent process. Kanaban system is used to control work-in-progress and JIT inventory flow. </li></ul><ul><li>5S (Sort, Straighten, Shine, Standardize and Sustain) </li></ul><ul><li>Repetition of Measurement System Analysis (MSA) </li></ul><ul><li>Lessons Learned </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.
  26. 26. CONCLUSION <ul><li>Six Sigma is a quality management philosophy aimed at customer satisfaction. If deployed properly, Six Sigma methodology leads to significant reduction and elimination of defects, and out-of-control processes; thus translating into immediate financial profitability. </li></ul><ul><li>Effectiveness of six sigma has been proved at global level by multiple organizations in many industries . </li></ul><ul><li>“ The most important initiative GE has ever undertaken” --Jack Welch, CEO General Electric </li></ul>Prepared By: Asadullah Malik, PMP, P.Eng.

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