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Six sigma

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Six sigma

  1. 1. Purpose of six sigma :Purpose of six sigma :To make customer happier and increase profitsTo make customer happier and increase profits
  2. 2.  Six Sigma originated as a set of practicesdesigned to improve manufacturing processesand eliminate defects, but its application wassubsequently extended to other types ofbusiness processes as well.In Six Sigma, adefect is defined as anything that could lead tocustomer dissatisfaction
  3. 3.  Continuous efforts to achieve stable andpredictable process results (i.e. reduce processvariations) Manufacturing and business processes havecharacteristics that can be measured, analyzed,improved and controlled. Achieving sustained quality improvementrequires commitment from the entireorganization, particularly from top-levelmanagement.
  4. 4.  1987 Motorola Develops Six Sigma Raised Quality Standards Other Companies Adopt Six Sigma GEPromotions, Profit Sharing (Stock Options),etc. directly tied to Six Sigma training.
  5. 5.  Delighting Customers. Reducing Cycle Times. Keeping up with Technology Advances. Retaining People. Reducing Costs. Responding More Quickly. Structuring for Flexibility. Growing Overseas Markets.
  6. 6.  Generated sustained success Project selection tied to organizational strategy Customer focused Profits Project outcomes / benefits tied to financialreporting system. Full-time Black Belts in a rigorous, project-oriented method. Recognition and reward system established toprovide motivation.
  7. 7. It is a Philosophy– Anything less than ideal isan opportunity forimprovement– Defects costs money– Understanding processesand improving them is themost efficient way toachieve lasting resultsIt is a Process– To achieve this level ofperformance you need to:Define, Measure, Analyse,Improve and ControlIt is Statistics– 6 Sigma processes willproduce less than 3.4defects per millionopportunities
  8. 8. • Know What’s Importantto the Customer (CTQ)• Reduce Defects(DPMO)• Center Around Target(Mean)• Reduce Variation(Standard Deviation)
  9. 9. • Y• Dependent• Output• Effect• Symptom• Monitor• X1 . . . XnX1 . . . Xn• IndependentIndependent• Input-ProcessInput-Process• CauseCause• ProblemProblem• ControlControlf(X)f(X)Y=Y=The focus of Six sigma is to identify and control XsThe focus of Six sigma is to identify and control Xs
  10. 10. • Define• Measure• Analyze• Improve• Control• DefineDefine• MeasureMeasure• AnalyzeAnalyze• DesignDesign• VerifyVerifyDMAICDMAIC DMADVDMADV• Existing Processes • New ProcessesNew Processes• DFSSDFSS
  11. 11. Key Concepts
  12. 12.  CTQ characteristics for the process, service orprocess 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
  13. 13.  A nonconforming unit is a defective unit Defect is nonconformance on one of many possiblequality characteristics of a unit that causescustomer dissatisfaction. A defect does not necessarily make the unitdefective Examples: Scratch on water bottle (However if customer wants a scratch free bottle, thenthis will be defective bottle)
  14. 14.  Circumstances in which CTQ can fail to meet. Number of defect opportunities relate tocomplexity of unit. Complex units – Greater opportunities of defectthan simple units Examples: A units has 5 parts, and in each part there are 3opportunities of defects – Total defect opportunitiesare 5 x 3 = 15
  15. 15.  Number of defects divided by number of defectopportunities Examples: In previous case (15 defect opportunities), if 10 unitshave 2 defects. Defects per unit = 2 / 10 = 0.2 DPO = 2 / (15 x 10) = 0.0133333
  16. 16.  DPO multiplies by one million Examples: In previous case (15 defect opportunities), if 10 unitshave 2 defects. Defects per unit = 2 / 10 = 0.2 DPO = 2 / (15 x 10) = 0.0133333 DPMO = 0.013333333 x 1,000,000 = 13,333Six Sigma performance is 3.4 DPMO13,333 DPMO is 3.7 Sigma
  17. 17.  Proportion of units within specification dividedby 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
  18. 18. What is Sigma?
  19. 19.  Shot a rifle? Played darts?What is the point of these sports?What makes them hard?
  20. 20. JackJillWho is the better shooter? Shot a rifle? Played darts?
  21. 21.  Deviation = distance betweenobservations and the mean (oraverage)Observations Deviations10 10 - 8.4 = 1.69 9 - 8.4 = 0.68 8 - 8.4 = -0.48 8 - 8.4 = -0.47 7 - 8.4 = -1.4averages 8.4 0.0Jack871089Jill
  22. 22.  Deviation = distance betweenobservations and the mean (or average)Observations Deviations7 7 - 6.6 = 0.47 7 - 6.6 = 0.47 7 - 6.6 = 0.46 6 - 6.6 = -0.66 6 - 6.6 = -0.6averages 6.6 0.0JackJill76776
  23. 23. SigmalevelDPMOPercentdefectivePercentage yield1 691,462 69% 31%2 308,538 31% 69%3 66,807 6.7% 93.3%4 6,210 0.62% 99.38%5 233 0.023% 99.977%6 3.4 0.00034% 99.99966%7 0.019 0.0000019% 99.9999981%
  24. 24.  Variance = average distance betweenobservations and the mean squaredObservations Deviations10 10 - 8.4 = 1.69 9 – 8.4 = 0.68 8 – 8.4 = -0.48 8 – 8.4 = -0.47 7 – 8.4 = -1.4averages 8.4 0.0Squared Deviations2.560.360.160.161.961.0VarianceJack871089Jill
  25. 25.  Variance = average distance betweenobservations and the mean squaredObservations Deviations7 7 - 6.6 = 0.47 7 - 6.6 = 0.47 7 - 6.6 = 0.46 6 – 6.6 = -0.66 6 – 6.6 = -0.6averages 6.6 0.0Squared Deviations0.160.160.160.360.360.24VarianceJackJill76776
  26. 26.  Standard deviation =square root ofvarianceAverage Variance StandardDeviationJack 8.4 1.0 1.0Jill 6.6 0.24 0.4898979JackJillBut what good is a standard deviation
  27. 27. The world tends tobe bell-shapedMostoutcomesoccur in themiddleFewerin the“tails”(lower)Fewerin the“tails”(upper)Even very rareoutcomes arepossibleEven very rareoutcomes arepossible
  28. 28. Add up the dots on the dice00.050.10.150.21 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18Sum of dotsProbability1 die2 dice3 diceHere is why:Here is why: Even outcomes that are equallyEven outcomes that are equallylikely (like dice), when you addlikely (like dice), when you addthem up, become bell shapedthem up, become bell shaped
  29. 29. Normal distributions are divide upinto 3 standard deviations oneach side of the meanOnce your that, youknow a lot aboutwhat is going onAnd that is what a standard deviationis good for“Normal” bell shapedcurve
  30. 30.  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
  31. 31.  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 (specialcauses) Specification limits: Engineered Limits = target ± tolerance Define acceptable & unacceptable
  32. 32. Another ViewLSL USL USLLSLOff-Target Large VariationOn-TargetCenterProcessReduceSpreadThe statistical view of a problemUSLLSL LSL = Lower spec limitUSL = Upper spec limitLSL = Lower spec limitUSL = Upper spec limit
  33. 33. Good quality:defects arerare (Cpk>1)Poor quality:defects arecommon (Cpk<1)Cpk measuresmeasures “Process Capability”If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.μtargetμtarget
  34. 34. Good quality: defects are rare (Cpk>1)Poor quality: defects are common (Cpk<1)Cpk = minUSL – x3σ=x - LSL3σ=3σ = (UPL – x, or x – LPL)= =14 20 2615 2424 – 203(2)= =.66720 – 153(2)= =.833
  35. 35. 1 122 3 4 5 6 7 8 9 10 111σ 1σ 1σ 1σ 1σ1σ6σLSL USL+6σ−6σA Six Sigma Process –Predictably twice as good as whatthe customer wants
  36. 36. 2 3 4 5 6 7 8 9 1210 16151413111LSL USL6 Sigma curve3 Sigma curve
  37. 37. 2 3 4 5 6 7 8 9 1210 16151413111LSL USLSD = 11.5 SD 1.5 SD
  38. 38. 345676681062102333.40.02SigmaDPMOOn one condition :Calculate the defectsand estimate theopportunities in thesame way...
  39. 39. 0100,000200,000300,000400,000500,000600,0001.5 2.5 3.5 4.5 5.5# of Sigmas#ofDefectperMillionSigma Defectsnumbers per million1.5s 500,0002.0s 308,3002.5s 158,6503.0s 67,0003.5s 22,7004.0s 6,2204.5s 1,3505.0s 2335.5s 326.0s 3.4
  40. 40. Components of Six Sigma
  41. 41. Two components of SixSigma1. Process Power2. People Power
  42. 42. PDCAPlanDoCheckActAct on whatwas learnedCheck the resultsPlan the changeImplement thechange on a smallscale.
  43. 43. PracticalProblemStatisticalProblemStatisticalSolutionPracticalSolution
  44. 44.  Define What is important? Measure How are we doing? Analyze What is wrong? Improve Fix what’s wrong Control Ensure gains are maintainedto guarantee performance
  45. 45. DDefineMMeasureAAnalyzeIImproveCControlIdentify and state the practical problemValidate the practical problem by collecting dataConvert the practical problem to a statistical one, definestatistical goal and identify potential statistical solutionConfirm and test the statistical solutionConvert the statistical solution to a practical solution
  46. 46. DDefineMMeasureAAnalyzeIImproveCControlVoCVoC - Who wants the project and why ?The scope of project / improvement (SMART Objective)Key team members / resources for the projectCritical milestones and stakeholder reviewBudget allocation
  47. 47. Ensure measurement system reliabilityPrepare data collection planCollect 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 ?DDefineMMeasureAAnalyzeIImproveCControl
  48. 48. How well or poorly processes are working compared with- Best possible (Benchmarking)- Competitor’sShows you maximum possible resultDon’t focus on symptoms, find the root causeDDefineMMeasureAAnalyzeIImproveCControl
  49. 49. 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.DDefineMMeasureAAnalyzeIImproveCControl
  50. 50. Don’t be too hasty to declare victory.How will you maintain to gains made?- Change policy & procedures- Change drawings- Change planning- Revise budget- TrainingDDefineMMeasureAAnalyzeIImproveCControl
  51. 51. Step Consequences if the step is omitted1. Define2. Measure3. Analyze4. Improve5. Control
  52. 52.  Benchmark Baseline Contract / Charter Kano Model Voice of theCustomer Quality FunctionDeployment Process Flow Map ProjectManagement “Management byFact” – 4 What’s 7 Basic Tools Defect Metrics Data Collection,Forms, Plan,Logistics SamplingTechniques Cause & EffectDiagrams Failure Models & Effect Analysis Decision & RiskAnalysis Statistical Inference Control Charts Capability Reliability Analysis Root CauseAnalysis 5 Why’s Systems Thinking Design ofExperiments Modelling Tolerancing Robust Design Process MapStatistical Controls Control Charts Time SeriesMethodsNon StatisticalControls Procedureadherence PerformanceMgmt Preventive activities Poke yokeDefineWhat is wrong?DefineWhat is wrong?MeasureData & ProcesscapabilityMeasureData & ProcesscapabilityAnalyzeWhen and whereare the defectsAnalyzeWhen and whereare the defectsImproveHow to getto six sigmaImproveHow to getto six sigmaControlDisplaykey measuresControlDisplaykey measures
  53. 53. Two components of SixSigma1. Process Power2. People PowerTell me, I forget. Show me , I remember. Involve me, I understand.
  54. 54. MasterBlackBeltBlack BeltsGreen BeltsTeam Members /Yellow BeltsChampionsMentor, trainer, and coach of Black Belts and othersin the organization.Leader of teams implementing the six sigmamethodology on projects.Delivers successful focused projects usingthe six sigma methodology and tools.Participates on and supportsthe project teams, typically inthe context of his or her existingresponsibilities.
  55. 55. ChampionBlackBeltBlackBeltBlackBeltGreenBeltGreenBeltGreenBeltGreenBeltGreenBeltYellowBeltYellowBeltYellowBeltYellowBeltMasterBlackBelt
  56. 56. SeniorExecutivesChampions /Process ownersBlack-BeltGreen BeltEmployees(Yellow-Belt)Executive overview2/3 Days Provide LeadershipChampionsTraining - I2 daysChampionsTraining –II3 daysProcess Mgmt. &ProjectchampionWeek2Week3Week4Training /FacilitationskillsProject-workMaster Black-Belt-As Trainer-Coach teams-Facilitateimprovement projects1 Week Green-Belt Training- Part of project teams- Sometime lead theteams1 / 2 Days core training onSix-Sigma- General processcontrol &improvement- Project TeamMemberBlack-BeltProject workPosition in Six SigmaOrganisationTypicalTrainingExpected RolePost Training+(Total 5 days)Week1
  57. 57. • Plans improvement projects• Charters or champions charteringprocess• Identifies, sponsors and directs Six Sigmaprojects• Holds regular project reviews inaccordance with project charters• Includes Six Sigma requirements inexpense and capital budgets
  58. 58. • Identifies and removes organizational andcultural barriers to Six Sigma success.• Rewards and recognizes team andindividual accomplishments (formally andinformally)• Communicates leadership vision• Monitors and reports Six Sigma progress• Validates Six Sigma project results• Nominates highly qualified Black Beltand/or Green Belt candidates
  59. 59. Roles Responsibilities-Enterprise Six Sigma expert-Permanent full-time changeagent-Certified Black Belt withadditional specialized skills orexperience especially useful indeployment of Six Sigmaacross the enterprise- Highly proficient in using Six Sigmamethodology to achieve tangible businessresults.-Technical expert beyond Black Belt levelon one or more aspects of processimprovement (e.g., advanced statisticalanalysis, project management,communications, program administration,teaching, project coaching)-Identifies high-leverage opportunities forapplying the Six Sigma approach acrossthe enterprise-Basic Black Belt training-Green Belt training-Coach / Mentor Black Belts
  60. 60. Roles Responsibilities- Six Sigma technical expert- Temporary, full-time changeagent (will return to other dutiesafter completing a two to threeyear tour of duty as a Black Belt)- Leads business processimprovement projects where SixSigma approach is indicated.- Successfully completes high-impactprojects that result in tangible benefitsto the enterprise- Demonstrated mastery of Black Beltbody of knowledge- Demonstrated proficiency at achievingresults through the application of theSix Sigma approach- Coach / Mentor Green Belts- Recommends Green Belts forCertification
  61. 61. Roles Responsibilities- Six Sigma Project originator- Part-time Six Sigma changeagent. Continues to performnormal duties while participatingon Six Sigma project teams- Six Sigma champion in localarea- Recommends Six Sigma projects- Participates on Six Sigma projectteams- Leads Six Sigma teams in localimprovement projects
  62. 62. Roles Responsibilities- Learns and applies Six Sigmatools to projects- Actively participates in team tasks- Communicates well with other teammembers- Demonstrates basic improvement toolknowledge- Accepts and executes assignments asdetermined by team
  63. 63. • Hard Savings:– Cost Reduction• Energy Saving• Raw Material saving• Reduced Rejection, Waste, Repair– Revenue Enhancement• Increased production• Yield Improvement• Quality Improvement
  64. 64. • 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 costsTypes of Savings
  65. 65. • Soft Savings:– Customer Satisfaction / Loyalty– Employee SatisfactionTypes of Savings
  66. 66. • Direct Payroll– Full time (Black Belts, Master Black Belts)• Indirect Payroll– Time by executives, team members, datacollection• Training and Consulting– Black Belt course, Overview for Mgmt etc.• Improvement Implementation Costs– Installing new solution, IT driven solutions etc.
  67. 67. • Three basic qualifications:– -There is a gap between current and desired /needed performance.– The cause of problem is not clearlyunderstood.– The solution is not pre-determined, nor isthe optimal solution apparent.How many projects out of 20 nowqualify as Six sigma projects?

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