Six sigma for managers


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Six sigma for managers

  1. 1. Six Sigma forSix Sigma forManagersManagers
  2. 2. 2www.exploreHR.orgContents :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 SigmaIf you find this presentation useful, please consider telling othersabout our site (
  3. 3. 3www.exploreHR.orgWhy Six Sigma?Why Six Sigma?
  4. 4. 4www.exploreHR.orgWhat is Sigma ?What is Sigma ?SigmaSigmaA term used in statistics to representstandard deviation, an indicator of thedegree of variation in a set of a process
  5. 5. 5www.exploreHR.orgWhat is Six Sigma?What is Six Sigma?SixSixSigmaSigmaA statistical concept that measures aprocess in terms of defects – at the sixsigma level, there 3.4 defects permillion opportunitiesA philosophy and a goal : as perfect aspractically possibleA methodology and a symbol of quality
  6. 6. 6www.exploreHR.orgSigma LevelSigma LevelSigma Level(ProcessCapability)Defects per MillionOpportunities2 308,5373 66,8074 6,2105 2336 3.4
  7. 7. 7www.exploreHR.orgSigma LevelSigma LevelSix Sigma =99,9997%
  8. 8. 8www.exploreHR.orgSigma LevelSigma Level• Every hour the postal servicewould lose 20,000 pieces of mail• Every day our drinking water wouldbe unsafe for almost 15 minutes• Every week there would be 5,000surgical operations that go wrongin some way• Every month we would be withoutelectricity for almost seven hoursWhy not FourSigma or99.379% ?
  9. 9. 9www.exploreHR.orgWhy Six Sigma?Why Six Sigma?MoneyCustomerSatisfactionGrowthQualityCompetitiveAdvantageEmployee Pride
  10. 10.• At GE, Six Sigma added more than $ 2 billion to theAt GE, Six Sigma added more than $ 2 billion to thebottom 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 10years of its Six Sigma effortyears of its Six Sigma effort• AlliedSignal reports saving $ 1,5 billion through SixAlliedSignal reports saving $ 1,5 billion through SixSigma.Sigma.Why Six Sigma?Why Six Sigma?
  11. 11. 11www.exploreHR.orgWhy Six Sigma?Why Six Sigma?Six Sigma is about practices that help youeliminate defects and always deliverproducts and services that meet customerspecifications
  12. 12. 12www.exploreHR.orgCost of Poor QualityCost of Poor QualityWhat 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 anddelays?delays?
  13. 13. 13www.exploreHR.orgCost of Poor QualityCost of Poor QualityWhat is cost of business lost becauseWhat is cost of business lost becausecustomers are dissatisfied with yourcustomers are dissatisfied with yourproducts or services?products or services?What is cost of opportunities lost becauseWhat is cost of opportunities lost becauseyou didn’t have time or the resources to takeyou didn’t have time or the resources to takeadvantage of them?advantage of them?
  14. 14. 14www.exploreHR.orgCritical-to-Quality (CTQ)Critical-to-Quality (CTQ)Elements of a process that significantly affectthe output of that process. Identifying theseelements is figuring out how to makeimprovements that can dramatically reducecosts and enhance quality.
  15. 15. 15www.exploreHR.orgSix Sigma PhasesSix Sigma Phases
  16. 16. 16www.exploreHR.orgDefine Measure AnalyzeImproveControlSix Sigma PhasesSix Sigma PhasesD M A I CD M A I C
  17. 17. 17www.exploreHR.orgDefineMeasureAnalyzeSix Sigma PhasesSix Sigma PhasesDefine the project goals and customer(internal and external) deliverablesMeasure the process to determine currentperformanceAnalyze and determine the root cause(s)of the defects
  18. 18. 18www.exploreHR.orgImproveControlSix Sigma PhasesSix Sigma PhasesControl future process performanceImprove the process by eliminating defects
  19. 19. 19www.exploreHR.orgSix Sigma PhasesSix Sigma PhasesDefine• Define Customers and Requirements (CTQs)• Develop Problem Statement, Goals andBenefits• 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.orgSix Sigma PhasesSix Sigma PhasesMeasure• 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 SigmaBaseline
  21. 21. 21www.exploreHR.orgSix Sigma PhasesSix Sigma PhasesAnalyze• Define Performance Objectives• Identify Value/Non-Value Added ProcessSteps• Identify Sources of Variation• Determine Root Cause(s)• Determine Vital Few xs, Y=f(x)Relationship
  22. 22. 22www.exploreHR.orgSix Sigma PhasesSix Sigma PhasesImprove• Perform Design of Experiments• Develop Potential Solutions• Define Operating Tolerances of PotentialSystem• Assess Failure Modes of PotentialSolutions• Validate Potential Improvement by PilotStudies• Correct/Re-Evaluate Potential Solution
  23. 23. 23www.exploreHR.orgSix Sigma PhasesSix Sigma PhasesControl• Define and Validate Monitoring and ControlSystem• Develop Standards and Procedures• Implement Statistical Process Control• Determine Process Capability• Develop Transfer Plan, Handoff to ProcessOwner• Verify Benefits, Cost Savings/Avoidance, ProfitGrowth• Close Project, Finalize Documentation• Communicate to Business, Celebrate
  24. 24. 24www.exploreHR.orgDefine Measure Analyze Improve ControlDeliverables :Deliverables :• Fully trained team is formed, supported, andcommitted to work on improvement project.• Team charter developed, customers identified andhigh impact characteristics (CTQs) defined, businessprocess mapped.
  25. 25. 25www.exploreHR.orgCheckpoints for ReadinessCheckpoints for ReadinessTeam 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 ControlTeam Charter :Team Charter :• Completed project management charter, including business case,problem and goal statements, project scope, milestones, roles andresponsibilities, communication plan.
  26. 26. 26www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessCustomersCustomers• Customer(s) identified and segmented according to their differentneeds and requirements.• Data collected and displayed to better understand customer(s) criticalneeds and requirements.Business Process MappingBusiness Process Mapping• Completed, verified, and validated high-level as is (not should be orcould be) business process map.• Completed SIPOC representation, describing the Suppliers, Inputs,Process, Outputs, and Customers.
  27. 27. 27www.exploreHR.orgDefine Measure Analyze Improve ControlDeliverables :Deliverables :• Key measures identified, data collection planned andexecuted, process variation displayed and communicated,performance baselined, sigma level calculated.
  28. 28. 28www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessKey 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 measurementsystems analysis.• Data collected on key measures that were identified.
  29. 29. 29www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessProcess Variation Displayed/CommunicatedProcess Variation Displayed/Communicated• Process variation components displayed/communicated usingsuitable 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.orgDefine Measure Analyze Improve ControlDeliverables :Deliverables :• Data and process analysis, root cause analysis,quantifying the gap/opportunity.
  31. 31. 31www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessData and Process AnalysisData and Process Analysis• Identify gaps between current performance and the goalperformance.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.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessQuantifying the Gap/OpportunityQuantifying the Gap/Opportunity• Determine the performance gap.• Display and communicate the gap/opportunity in financial terms.
  33. 33. 33www.exploreHR.orgDefine Measure Analyze Improve ControlDeliverables :Deliverables :• Generate (and test) possible solutions, select the bestsolutions, design implementation plan.
  34. 34. 34www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessGenerating (and Testing) Possible SolutionsGenerating (and Testing) Possible Solutions• Possible solutions generated and tested.
  35. 35. 35www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessSelecting 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 dataand analysis.• Project impact on utilizing the best solution(s).
  36. 36. 36www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessDesigning Implementation PlanDesigning Implementation Plan• Solution implementation plan established, including schedule/workbreakdown structure, resources, risk management plan,cost/budget, and control plan.• Contingency plan established.
  37. 37. 37www.exploreHR.orgDefine Measure Analyze Improve ControlDeliverables :Deliverables :• Documented and implemented monitoring plan,standardized process, documented procedures, responseplan established and deployed, transfer of ownership(project closure).
  38. 38. 38www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessMonitoring PlanMonitoring Plan• Control plan in place for sustaining improvements (short and long-term).Process StandardizationProcess Standardization• New process steps, standards, and documentation are ingrained intonormal operations.Documented ProceduresDocumented Procedures• Operating procedures are consistent.• Knowledge gained on process is shared and institutionalized.
  39. 39. 39www.exploreHR.orgDefine Measure Analyze Improve ControlCheckpoints for ReadinessCheckpoints for ReadinessResponse 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 processteam tasked with the responsibilities.
  40. 40. 40www.exploreHR.orgTools and Roles forTools and Roles forSix SigmaSix Sigma
  41. 41.• Creating flowcharts of the step in a process– operations, decision points, delays,movements, handoffs, rework, loops, andcontrols or inspections.• A process map is illustrated description ofhow a process work.Tools for Six SigmaTools for Six SigmaProcessProcessMappingMapping
  42. 42.• DOE is a structured, organized method fordetermining the relationship betweenfactors (Xs) affecting a process and theoutput of that process (Y).Tools for Six SigmaTools for Six SigmaDesign ofDesign ofExperimentsExperimentsor DOEor DOE
  43. 43.• A group of rows and columns, with one setof increments marked along the X(horizontal) axis and another set ofincrements marked along the Y (vertical)axis.• The purpose of using XY matrix is to studyand understand the relationship betweenwhat you are putting into a process andwhat your customer is getting out of it.• The XY matrix allows the team to identifygaps, areas for improvement.Tools for Six SigmaTools for Six SigmaXY MatrixXY Matrix
  44. 44.• The goal of this tool is to ensure that yourmeasurement system is statically confident– that it’s both accurate and precise eachand every time it is used.• Undertaken during Measure phase, yourMSA determines whether or not you cantake a certain measurement and repeat orreproduce it among different people whotake the same measurement.Tools for Six SigmaTools for Six SigmaMeasurementMeasurementSystemSystemAnalysisAnalysis
  45. 45.• Process capability tool is the measure of aprocess being able to meet specificationrequirements and fulfill customer CTQneeds on a long term basis.Tools for Six SigmaTools for Six SigmaProcessProcessCapabilityCapabilityToolTool
  46. 46.• Investigating a theory about the suspectedcause (s) of a particular effect in a processto determine if it is correct.• It’s a compass that points you directly tothe vital few factors that are most affectingyour process.Tools for Six SigmaTools for Six SigmaHypothesisHypothesisTestingTesting
  47. 47.• The manner in which a part or process canfail to meet a specification, creating adefect or non-conformance, and the impacton the customer if that failure mode is notprevented or corrected.Tools for Six SigmaTools for Six SigmaFailureFailureMode EffectMode EffectAnalysisAnalysis
  48. 48.• A detailed assessment and guide formaintaining all the positive changes you,your black belt, and the project team havemade.• It ensures that all your analysis and effortsstay in effect and that you have informationat your disposal to prevent backsliding or areturn to less than optimal performancestandard.Tools for Six SigmaTools for Six SigmaControlControlPlanPlan
  49. 49. 49www.exploreHR.orgChampionsChampions Are responsible for the Six Sigmaimplementation across the organization in anintegrated manner. Champions also act asmentor to Black Belts.Includes CEO and other key top managementteam members. They are responsible for settingup a vision for Six Sigma implementation.Key Roles for Six SigmaKey Roles for Six SigmaExecutiveExecutiveLeadershipLeadership
  50. 50. 50www.exploreHR.orgBlack BeltsBlack Belts Operate under Master Black Belts to apply SixSigma methodology to specific projects. Theyprimarily focus on Six Sigma project execution.Identified by champions, act as in-house expertcoach for the organization on Six Sigma. Theydevote 100% of their time to Six Sigma.Key Roles for Six SigmaKey Roles for Six SigmaMasterMasterBlack BeltsBlack Belts
  51. 51. 51www.exploreHR.orgAre the employees who take up Six Sigmaimplementation along with their other jobresponsibilities. They operate under the guidanceof Black Belts and support them in achieving theoverall results.Key Roles for Six SigmaKey Roles for Six SigmaGreen BeltsGreen Belts
  52. 52. 52www.exploreHR.orgSix 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 companyleadersleaders• 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.orgSix Sigma Do’sSix Sigma Do’s• Do be patient at the inception of you six SigmaDo be patient at the inception of you six Sigmainitiativeinitiative• 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.orgRecommended Further Readings:1. Greg Brue, Six Sigma for Managers, McGraw Hill2. George Eckes, Six Sigma for Everyone, John Wiley and Sons
  55. 55. 55www.exploreHR.orgEnd of Material