Six Sigma Overview by Operational Excellence Consulting

5,730 views

Published on

In today's competitive environment, organizations must delight their customers and relentlessly look for new ways to exceed their expectations. To accomplish this, Six Sigma Quality has to become a part of an organization’s culture. Six Sigma provides a rigorous and structured approach to help organizations improve their performance in meeting their customers' requirements.

This training presentation introduces you to the Six Sigma philosophy, methodology and tools and the infrastructure for successful Six Sigma deployment without too much of statistical jargon. It includes applications of Six Sigma in manufacturing, process and service industries, step-by-step DMAIC improvement approach, phase description and deliverables, and roles of the Leadership team, Champion, Process Owner, Black Belt and Green Belt.

OBJECTIVES

Explain how Six Sigma improves business performance
Describe the Six Sigma philosophy and approach to continuous improvement
Define process variability
Describe the DMAIC improvement methodology
Recognize which Six Sigma tools to use for a particular problem
Identify Six Sigma roles and responsibilities, project selection and project management to realize the benefits

CONTENTS

Overview of Six Sigma
Key Concepts of Six Sigma
Applications of Six Sigma in Manufacturing, Process & Service Industries
Six Sigma DMAIC Methodology
Six Sigma Toolkit
Organizing for Six Sigma
Project Selection and Management
Critical Success Factors

To download this complete presentation, please go to: http://www.oeconsulting.com.sg

Published in: Business
4 Comments
25 Likes
Statistics
Notes
No Downloads
Views
Total views
5,730
On SlideShare
0
From Embeds
0
Number of Embeds
28
Actions
Shares
0
Downloads
0
Comments
4
Likes
25
Embeds 0
No embeds

No notes for slide

Six Sigma Overview by Operational Excellence Consulting

  1. 1. 1© Operational Excellence Consulting. All rights reserved.
  2. 2. 2© Operational Excellence Consulting. All rights reserved. Program Objectives By the end of this program, you will be able to: • Explain how Six Sigma improves business performance • Describe the Six Sigma philosophy and approach to continuous improvement • Define process variability • Describe the DMAIC improvement methodology • Recognize which Six Sigma tools to use for a particular problem • Identify Six Sigma roles and responsibilities, project selection and project management to realize the benefits
  3. 3. 3© Operational Excellence Consulting. All rights reserved. Program Outline • Overview of Six Sigma • Key Concepts of Six Sigma • Applications of Six Sigma in Industries • Six Sigma DMAIC Methodology • Six Sigma Toolkit • Organizing for Six Sigma • Project Selection and Management • Critical Success Factors NOTE: As this is a PREVIEW, only selected slides are shown. To download the complete presentation, please visit: http://www.oeconsulting.com.sg
  4. 4. 4© Operational Excellence Consulting. All rights reserved. What is Six Sigma? • It is a methodology for continuous improvement • It is a methodology for creating products/ processes that perform at high standards • It is a set of statistical and other quality tools arranged in unique way • It is a way of knowing where you are and where you could be! • It is a Quality philosophy and a management technique
  5. 5. 5© Operational Excellence Consulting. All rights reserved. What Six Sigma IS NOT • A standard • A certification • Another metric like percentage • Automation
  6. 6. 6© Operational Excellence Consulting. All rights reserved. Myths of Six Sigma • Only works in manufacturing industry • Only interested in bottom line – ignores the customer • Creates a parallel organization • Requires large resources • Just another quality program
  7. 7. 7© Operational Excellence Consulting. All rights reserved. Six Sigma is a measure of excellence • Six Sigma is a statistical measure of quality, which reflects process capability • It set the goal of achieving capability levels of 3.4 defects per million opportunities • Focuses on driving out variation in business processes - this is what the customer feels! • Sigma (s) is the Greek symbol used for Standard Deviation of a population © Max Zornada (2005) Slide 7
  8. 8. 8© Operational Excellence Consulting. All rights reserved. Origin of Six Sigma • Six Sigma was developed by Motorola in 1987  Raised quality standards • GE adopted Six Sigma in 1995 • Other companies have adopted Six Sigma since its inception  AlliedSignal, Siebel, Bombardier, Lockheed Martin, Kodak, Sony, Nokia, Siemens, BBA, Seagate, Compaq, Toshiba, AmEx...
  9. 9. 9© Operational Excellence Consulting. All rights reserved. Why is Six Sigma Important? Improves customer satisfaction by eliminating and reducing defects* Greater Profits *Any product or service that does not meet customer expectation is a defect.
  10. 10. 10© Operational Excellence Consulting. All rights reserved. Quality engineering and administration Inspection/test (materials, equipment, labor) Expediting Scrap Rework Rejects Warranty claims Maintenance and service Cost to customer Excess inventory Additional labor hours Longer cycle times Quality audits Vendor control Lost customer loyalty Improvement program costs Process control Opportunity cost if sales greater than plant capacity We See Only the Tip of the Iceberg Poor quality costs a typical company 15-20% of sales annually Less Visible Visible
  11. 11. 11© Operational Excellence Consulting. All rights reserved. The Problem-Solving Continuum Intuition, Gut Feel, ‘I think’ Raw Data Gathered and Evaluated Graphs/Charts Generated and Used to Evaluate Data Advanced Statistical Tools Used to Evaluate Data Very Simple More Complex Decision-Making Growth Path: Using simple methods on complex problems is a very risky approach Types of Problems
  12. 12. 12© Operational Excellence Consulting. All rights reserved. Benefits of Six Sigma • Improves customer relationships by addressing “defects” • Defines a measurable way to track performance improvements • Focuses our attention on process management at all levels of the organization • Improves the efficiency and effectiveness of processes by aligning them with customers’ needs • Delivers financial benefits to the business by eliminating the cost of poor quality
  13. 13. 13© Operational Excellence Consulting. All rights reserved. Lean & Six Sigma • Lean improves the “flow” by eliminating waste • Six Sigma improves the process by reducing variation Combining Lean with Six Sigma results in smooth and steady flow
  14. 14. 14© Operational Excellence Consulting. All rights reserved. Traditional process analysis starts by examining the process inside the organization. Six Sigma first looks at the market/customers and asks how defects can be minimized in their terms. Six Sigma Business Improvement Concept • Disciplined management-by-fact problem solving • Methodology for optimizing the value chain • Measurement of performance excellence Market Variation in the Output of Processes Causes Defects Process Inputs Business ProcessSuppliers Critical Customer Requirements Process Outputs Root Cause Analysis of Defects Leads to Permanent Defect Reduction Defects
  15. 15. 15© Operational Excellence Consulting. All rights reserved. Key Concepts of Six Sigma • Critical to Quality: Attributes most important to the customer • Defect: Failing to deliver what the customer wants • Process Capability: What your process can deliver • Variation: What the customer sees and feels • Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels • Design for Six Sigma: Designing to meet customer needs and process capability
  16. 16. © Operational Excellence Consulting. All rights reserved. “85% of the reasons for failure to meet customer expectations are related to deficiencies in systems and processes… rather than the employee.” - Dr. W. Edwards Deming
  17. 17. 17© Operational Excellence Consulting. All rights reserved. Problem-Solving Objective Sigma Identifies Off-Target Or Completely Unpredictable Variation And Corrects It Center Process Reduce Spread X X X X X X X X X X X X XX X X XXxx X X X Xxx XX X XX X X X XX X X X X XX X XX X Off-Target Unpredictable On-Target
  18. 18. 18© Operational Excellence Consulting. All rights reserved. Variability affects your costs and your customers’ experience Understanding the nature of process variation is critical since customers feel the effects of process variation as well as the process average Unhappy Customer Excess Cost USLLSL
  19. 19. 19© Operational Excellence Consulting. All rights reserved. How to Manage Process Variation Target LSL USL Target Defects LSL USL Center Process Reduce Spread Process Off Target Excessive Variation Target LSL USL Defects
  20. 20. 20© Operational Excellence Consulting. All rights reserved. Focus of Six Sigma Focus on the x-y relationship • y • Dependent • Output • Effect • Symptom • Monitor • x1 . . . xN • Independent • Input - Process • Cause • Problem • Control Process/Product Output (y) is a Function of Process Input Variables (x’s) Capability = y = f (Variation) f(x)
  21. 21. 21© Operational Excellence Consulting. All rights reserved. What is Six Sigma Quality? • To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities (DPMO) • An "opportunity" is defined as a chance for non- conformance, or not meeting the required specifications • This means we need to be nearly flawless in executing our key processes
  22. 22. 22© Operational Excellence Consulting. All rights reserved. A 6 Sigma Process © Max Zornada (2005) Slide 22 Customer TargetLower Specification Limit Upper Specification Limit 6s 0.00034% of points will be outside of the specification limits, i.e. defects (= 3.4 parts per million out of spec.) = 99.99966% of data inside the limits (Cp = 2) 0.00017% 1.7 ppm 0.00017% 1.7 ppm 6s
  23. 23. 23© Operational Excellence Consulting. All rights reserved. Sigma Level, DPMO & Financial Impact Sigma Level Percent Defective Percentage Yield Defects per Million Opportunities (DPMO) Cost of Poor Quality (as % of Sales) Remarks 1s 69% 31% 691,462 40 – 50% Bankruptcy 2s 31% 69% 308,538 30 – 40% Bankruptcy 3s 6.7% 93.3% 66,807 20 – 30% 4s 0.62% 99.38% 6,210 15 – 20% Current standard 5s 0.023% 99.977% 233 10 – 15% 6s 0.00034% 99.99966% 3.4 < 10% World-class Each Sigma shift generates a 10% savings of COPQ!
  24. 24. 24© Operational Excellence Consulting. All rights reserved. Is 99% (3.8s) good enough? 99.99967% Good – At 6s 20,000 lost mails per hour 7 lost mails per hour Unsafe drinking water almost 15 minutes each day One minute of unsafe drinking water every seven months 5,000 incorrect surgical operations per week 1.7 incorrect surgical operations per week 2 short or long landings at most major airports daily One short or long landing at major airports every five years 200,000 wrong drug prescriptions each year 68 wrong drug prescriptions each year Source: Example quoted from GE Book of Knowledge - copyright GE Real World: What is Sigma Performance?
  25. 25. 25© Operational Excellence Consulting. All rights reserved. The Concept of ‘Outside-In’ To improve processes, look outward first – to the requirements defined by the customer . . . . Outside-In Thinking: External needs drive internal processes This is the essence of Customer Satisfaction
  26. 26. 26© Operational Excellence Consulting. All rights reserved. X’s Independent Variables Causes (f) = Process INPUT OUTPUT Y’s Dependent Variables Effects THE OUTPUT IS A FUNCTION OF THE INPUT: Y = f(X) Basic Equation of a Process CONTROL the X’s, monitor the Y’s
  27. 27. 27© Operational Excellence Consulting. All rights reserved. The Blending Approach of Six Sigma Translate Translate Practical Problem Analytical Problem Analytical SolutionPractical Solution Analyze Begin with... Y = f(X) Validate
  28. 28. 28© Operational Excellence Consulting. All rights reserved. Reduce Process Defects and Variation Where we are . . . Where we’d like to be . . . Observation IndividualValue 9181716151413121111 175 150 125 100 75 50 _ X=98.5 UCL=160.1 LCL=36.8 75 125 I Chart of BEFORE Observation IndividualValue 9181716151413121111 175 150 125 100 75 50 _ X=100.2 UCL=113.4 LCL=86.9 75 125 I Chart of AFTER • Process defects create waste • Excessive cycle times and bottlenecks are waste • Variation drives inconsistency, which is also waste TARGET: 100, +/- 25 Use DATA to determine the x’s causing waste
  29. 29. 29© Operational Excellence Consulting. All rights reserved. Six Sigma Improvement Frameworks • DMAIC  Define - Measure - Analyze - Improve - Control  Use it to improve an existing process • DMADV (or DFSS*)  Define - Measure - Analyze - Design - Verify  Use it to design new products/services or redesign existing products/services  Use it to design a new process *DFSS = Design for Six Sigma
  30. 30. 30© Operational Excellence Consulting. All rights reserved. Six Sigma DMAIC Approach Six Sigma DMAIC Roadmap Improve Measure Analyze Define Control Define the problem or opportunity Measure the current performance and capability Analyse to identify root causes Improve by implementing potential solutions Control by standardizing solution and monitoring performance
  31. 31. 31© Operational Excellence Consulting. All rights reserved. DMAIC Improvement Methodology Measure Performance Define Opportunity Analyze Opportunity Improve Performance Control Performance  Identify the critical business issues and concerns  Understand the current process and it’s customers  Characterize the Y and potential Xs  Collect data for process elements  Verify/quantify important Xs  Identify factors (Xs) that have an influence on the business issue.  Implement solutions to improve Y  Adjusted the factors that influence the business concerns  Manage important Xs and monitor the Y over time  Mange routine or day-to-day operations for these critical factors  DMAIC allows for the utilization of multiple tools and techniques when improving processes; including statistics and Lean techniques.  The Control Phase allows teams to develop a process to ensure improvement results will be sustained over the long-term Each step in the DMAIC process is required and results in deliverables that ensures the team is focused on key process performance measures
  32. 32. 32© Operational Excellence Consulting. All rights reserved. DMAIC & Applicable Tools – OverviewTools&TechniquesPhase • Voice of customer • CTQ Trees • QFD • Cost of poor quality • Kano analysis • Prioritization matrix • Stakeholder analysis • SIPOC process map • Identify KPIs • Operational definitions • Financial analysis • Project charter • Project plan • Data collection methods/plans • Sampling plan • Measurement system analysis • Gage R&R • Attribute R&R • Normal distribution • Process stability • Capability analysis • Graphical techniques • Sigma levels • Review of project goals and plan • Detailed process mapping • Brainstorming • 5 whys • Fishbone diagram • Cause & effect matrix • Affinity diagrams • FMEA • Graphical analysis • Hypothesis testing • Multi-vari analysis • Correlation and regression • Brainstorming • Error proofing • Benchmarking • Assessment criteria • Prioritization matrix • Pugh matrix • Design of experiments • Solution screening • Fishbone diagram • FMEA • Process capability • Pilot studies • SPC • Control plans • Gage control plans • KPI trees • Standardized processes • Hypothesis testing • Mistake proofing • Responsibility/ accountability audits • Preventive maintenance • Project report • Closure action log • Financial validation • Transition plan to process owner CONTROLIMPROVEANALYZEMEASUREDEFINE
  33. 33. 33© Operational Excellence Consulting. All rights reserved. DMAIC Storyboard
  34. 34. 34© Operational Excellence Consulting. All rights reserved. Six Sigma Project Organization Deployment Leader Leadership Team Process Owner Champion (Political Leader) MBB (Technical Leader) Green Belt Black Belt
  35. 35. 35© Operational Excellence Consulting. All rights reserved. Role of Black Belts • Is responsible for leading, executing, and completing DMAIC projects • Teaches team members the Six Sigma methodology and tools • Assists in identifying project opportunities and refining project details and scope • Reports progress to the project champions and process owners • Transfers knowledge to other Black Belts and the organization • Mentors Green Belts
  36. 36. 36© Operational Excellence Consulting. All rights reserved. Role of Green Belts • Is trained in the subset of the Six Sigma methodology and tools • Works small scope projects, typically in his/her respective work area • Can be an effective team member on a Black Belt team
  37. 37. 37© Operational Excellence Consulting. All rights reserved. Aligning the Right People to the Project TimeRequired/SkillLevel GreenBelt BlackBelt
  38. 38. 38© Operational Excellence Consulting. All rights reserved. Deployment Approach Black Belt Projects • Broad Scope  Cross-Geography  Cross-Organization  Impact large number of people • 9-12 Month Duration • Benefits > $200K Green Belt Projects • Specific Scope  Single Process or Geography  Drives Six Sigma into the DNA of the Organization • 4-6 Month Duration • Benefits > $50K GREEN BELT PROJECTS SPECIFIC SCOPE FASTER RESULTS SMALLER BENEFITS BLACK BELT PROJECTS BROADER SCOPE SLOWER RESULTS LARGER BENEFITS Six Sigma 2-Pronged Approach 4-6 Months 9-12 Months
  39. 39. © Operational Excellence Consulting. All rights reserved. About Operational Excellence Consulting
  40. 40. 40© Operational Excellence Consulting. All rights reserved. About Operational Excellence Consulting • Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. • The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. • OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg
  41. 41. © Operational Excellence Consulting. All rights reserved. To download this presentation, please visit us at: www.oeconsulting.com.sg END OF PREVIEW

×