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Introduction To Six Sigma

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Introduction to Six Sigma

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Introduction To Six Sigma

  1. 1. QualityGurus.com Introduction to Six SigmaIntroduction to Six Sigma Purpose of six sigma : To make customer happier and increase profits
  2. 2. QualityGurus.com Origin of Six SigmaOrigin of Six Sigma • 1987 Motorola Develops Six Sigma – Raised Quality Standards • Other Companies Adopt Six Sigma – GE • Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training. • Dow Chemical, Dupont, Honeywell, Whirlpool
  3. 3. QualityGurus.com Time LineTime Line 20021995199219871985 Dr Mikel J Harry wrote a paper relating early failures to quality Motorola Allied Signal General Electric Johnson & Johnson, Ford, Nissan, Honeywell
  4. 4. QualityGurus.com Pilot’s Six Sigma PerformancePilot’s Six Sigma Performance Width of landing strip 1/2 Width of landing strip If pilot always lands within 1/2 the landing strip width, we say that he has Six Sigma capability.
  5. 5. QualityGurus.com Current Leadership ChallengesCurrent Leadership Challenges • 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. QualityGurus.com Six Sigma— Benefits?Six Sigma— Benefits? • Generated sustained success • Project selection tied to organizational strategy – Customer focused – Profits • Project outcomes / benefits tied to financial reporting system. • Full-time Black Belts in a rigorous, project-oriented method. • Recognition and reward system established to provide motivation.
  7. 7. QualityGurus.com What can it do?What can it do? • Motorola: – 5-Fold growth in Sales – Profits climbing by 20% pa – Cumulative savings of $14 billion over 11 years • General Electric: – $2 billion savings in just 3 years – The no.1 company in the USA • Bechtel Corporation: – $200 million savings with investment of $30 million
  8. 8. QualityGurus.com GE Six Sigma EconomicsGE Six Sigma Economics 1996 1998 2000 2002 0 500 1000 1500 2000 2500 1996 Cost Benefit (in millions) Source: GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma.
  9. 9. QualityGurus.com Overview of Six SigmaOverview of Six Sigma PAIN, URGENCY, SURVIVAL COSTS OUT GROWTH TRANSFORM THE ORGANIZATION CHANGE THE WORLD 6 SIGMA AS A STATISTICAL TOOL 6 SIGMA AS A PHILOSOPHY 6 SIGMA AS A PROCESS
  10. 10. QualityGurus.com Overview of Six SigmaOverview of Six Sigma It is a Philosophy – Anything less than ideal is an opportunity for improvement – Defects costs money – Understanding processes and improving them is the most efficient way to achieve lasting results It is a Process – To achieve this level of performance you need to: Define, Measure, Analyse, Improve and Control It is Statistics – 6 Sigma processes will produce less than 3.4 defects per million opportunities
  11. 11. QualityGurus.com Management involvement?Management involvement? • Executives and upper management drive the effort through: – Understanding Six Sigma – Significant financial commitments – Actively selecting projects tied to strategy – Setting up formal review process – Selecting Champions – Determining strategic measures
  12. 12. QualityGurus.com Management involvement?Management involvement? • Key issues for Leadership: – How will leadership organize to support Six Sigma ? (6 σ council, Director 6 σ, etc) – Transition rate to achieve 6 σ. – Level of resource commitment. – Centralized or decentralized approach. – Integration with current initiatives e.g. QMS – How will the progress be monitored?
  13. 13. QualityGurus.com PhilosophyPhilosophy • Know What’s Important to the Customer (CTQ) • Reduce Defects (DPMO) • Centre Around Target (Mean) • Reduce Variation (Standard Deviation)
  14. 14. QualityGurus.com Critical ElementsCritical Elements • Genuine Focus on the Customer • Data and Fact Driven Management • Process Focus • Proactive management • Boundary-less Collaboration • Drive for Perfection; Tolerance for failure
  15. 15. QualityGurus.com Data Driven DecisionData Driven Decision Y X1 . . . Xn Dependent Independent Output Input-Process Effect Cause Symptom Problem Monitor Control f(X)f(X)Y=Y=
  16. 16. QualityGurus.com Two ProcessesTwo Processes • DefineDefine • MeasureMeasure • AnalyzeAnalyze • ImproveImprove • ControlControl • DefineDefine • MeasureMeasure • AnalyzeAnalyze • DesignDesign • VerifyVerify DMAICDMAIC DMADVDMADV • Existing ProcessesExisting Processes • New ProcessesNew Processes • DFSSDFSS
  17. 17. QualityGurus.com Key ConceptsKey Concepts
  18. 18. QualityGurus.com COPQ (Cost of Poor Quality)COPQ (Cost of Poor Quality) - Lost Opportunities - The Hidden Factory - More Setups - Expediting Costs - Lost Sales - Late Delivery - Lost Customer Loyalty - Excess Inventory - Long Cycle Times - Costly Engineering Changes Average COPQ approximately 15% of Sales Hidden Costs: - Intangible - Difficult to Measure Traditional Quality Costs: - Tangible - Easy to Measure - Inspection - Warranty - Scrap - Rework - Rejects
  19. 19. QualityGurus.com COPQ vs. Sigma LevelCOPQ vs. Sigma Level 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2 3 4 5 6 CostofQuality%Sales Sigma Level
  20. 20. QualityGurus.com ProcessProcess • A Process is a group of steps, tasks, or activities, which take inputs (People, Material, Information …..) and in some way change them to produce an output (Service, Product……) XsXs YsYsStep-1Step-1 Step-2Step-2 Step-3Step-3 InputInput ProcessProcess OutputOutput
  21. 21. QualityGurus.com CTQ (Critical-To-Quality)CTQ (Critical-To-Quality) • CTQ characteristics for the process, service or process • 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
  22. 22. QualityGurus.com Defective and DefectDefective and Defect • A nonconforming unit is a defective unit • Defect is nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction. • A defect does not necessarily make the unit defective • Examples: – Scratch on water bottle – (However if customer wants a scratch free bottle, then this will be defective bottle)
  23. 23. QualityGurus.com Defect OpportunityDefect Opportunity • Circumstances in which CTQ can fail to meet. • Number of defect opportunities relate to complexity of unit. • Complex units – Greater opportunities of defect than simple units • Examples: – A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15
  24. 24. QualityGurus.com DPO (Defect Per Opportunity)DPO (Defect Per Opportunity) • Number of defects divided by number of defect opportunities • Examples: – In previous case (15 defect opportunities), if 10 units have 2 defects. – Defects per unit = 2 / 10 = 0.2 – DPO = 2 / (15 x 10) = 0.0133333
  25. 25. QualityGurus.com DPMO (Defect Per Million Opportunities)DPMO (Defect Per Million Opportunities) • DPO multiplies by one million • Examples: – In previous case (15 defect opportunities), if 10 units have 2 defects. – Defects per unit = 2 / 10 = 0.2 – DPO = 2 / (15 x 10) = 0.0133333 – DPMO = 0.013333333 x 1,000,000 = 13,333 Six Sigma performance is 3.4 DPMO 13,333 DPMO is 3.7 Sigma
  26. 26. QualityGurus.com What is Sigma?What is Sigma?
  27. 27. QualityGurus.com Have you ever…Have you ever… • Shot a rifle? • Played darts? What is the point of these sports? What makes them hard?
  28. 28. QualityGurus.com Have you ever…Have you ever… • Shot a rifle? • Played darts? Who is the better shooter? Jack Jill
  29. 29. QualityGurus.com Variability - JackVariability - Jack • Deviation = distance between observations and the mean (or average) Jill Jack 8 7 10 8 9 Observations Deviations 10 10 - 8.4 = 1.6 9 9 - 8.4 = 0.6 8 8 - 8.4 = -0.4 8 8 - 8.4 = -0.4 7 7 - 8.4 = -1.4 averages 8.4 0.0
  30. 30. QualityGurus.com Variability - JackVariability - Jack • Variance = average distance between observations and the mean squared Jill Jack 8 7 10 8 9 Observations Deviations 10 10 - 8.4 = 1.6 9 9 - 8.4 = 0.6 8 8 - 8.4 = -0.4 8 8 - 8.4 = -0.4 7 7 - 8.4 = -1.4 averages 8.4 0.0 Squared Deviations 2.56 0.36 0.16 0.16 1.96 1.0
  31. 31. QualityGurus.com Variability - JillVariability - Jill • Deviation = distance between observations and the mean (or average) Jill 7 6 7 7 6 Jack Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 - 6.6 = -0.6 6 6 - 6.6 = -0.6 averages 6.6 0.0
  32. 32. QualityGurus.com Variability - JillVariability - Jill • Variance = average distance between observations and the mean squared Jill 7 6 7 7 6 Jack Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 - 6.6 = -0.6 6 6 - 6.6 = -0.6 averages 6.6 0.0 Squared Deviations 0.16 0.16 0.16 0.36 0.36 0.24
  33. 33. QualityGurus.com Standard deviationStandard deviation • Standard deviation = square root of variance Jack Jill Average Variance Standard Deviation Jack 8.4 1.0 1.0 Jill 6.6 0.24 0.4898979 But what good is a standard deviation
  34. 34. QualityGurus.com VariabilityVariability The world tends to be bell-shaped Most outcomes occur in the middle Fewer in the “tails” (upper) Even very rare outcomes are possible Even very rare outcomes are possible Fewer in the “tails” (upper) QualityGurus.com
  35. 35. QualityGurus.com ““Normal” bell shaped curveNormal” bell shaped curve Normal distributions are divide up into 3 standard deviations on each side of the mean
  36. 36. QualityGurus.com Causes of VariabilityCauses of Variability • 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
  37. 37. QualityGurus.com LimitsLimits • 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 (special causes) • Specification limits: – Engineered – Limits = target ± tolerance – Define acceptable & unacceptable
  38. 38. QualityGurus.com Usual vs. Unusual, Acceptable vs. DefectiveUsual vs. Unusual, Acceptable vs. Defective Another View LSL USL Off-Target USLLSL Large Variation Center Process Reduce Spread The statistical view of a problem On-Target USLLSL LSL = Lower spec limit USL = Upper spec limit LSL = Lower spec limit USL = Upper spec limit
  39. 39. QualityGurus.com More about limitsMore about limits Good quality: defects are rare (Cpk>1) Poor quality: defects are common (Cpk<1) Cpk measuresmeasures “Process Capability” If process limits and control limits are at the same location, Cpk = 1. LSL and USL = Lower and Upper Specification Limits / LPL and UPL = Lower and Upper Process Limits μ target μ target
  40. 40. QualityGurus.com A Six Sigma ProcessA Six Sigma Process • Predictably twice as good as what the customer wants 1 122 3 4 5 6 7 8 9 10 11 1σ 1σ 1σ 1σ 1σ1σ 6 σLSL USL +6 σ −6σ
  41. 41. QualityGurus.com Process shift allowedProcess shift allowed 2 3 4 5 6 7 8 9 1210 111 LSL USL SD = 1 1.5 SD 1.5 SD
  42. 42. QualityGurus.com Six Sigma MeasurementSix Sigma Measurement 3 4 5 6 7 66810 6210 233 3.4 0.02 Sigma DPMO
  43. 43. QualityGurus.com Six Sigma MeasurementSix Sigma Measurement 0 100,000 200,000 300,000 400,000 500,000 600,000 1.5 2.5 3.5 4.5 5.5 # of Sigmas #ofDefectperMillion Sigma Defects numbers per million 1.5 σ 500,000 2.0 σ 308,300 2.5 σ 158,650 3.0 σ 67,000 3.5 σ 22,700 4.0 σ 6,220 4.5 σ 1,350 5.0 σ 233 5.5 σ 32 6.0 σ 3.4
  44. 44. QualityGurus.com Components of Six SigmaComponents of Six Sigma
  45. 45. QualityGurus.com Components of Six SigmaComponents of Six Sigma • Two components of Six Sigma – Process Power – People Power
  46. 46. QualityGurus.com Process PowerProcess Power
  47. 47. QualityGurus.com ApproachApproach Practical Problem Statistical Problem Statistical Solution Practical Solution
  48. 48. QualityGurus.com DMAIC - simplifiedDMAIC - simplified • Define – What is important? • Measure – How are we doing? • Analyze – What is wrong? • Improve – Fix what’s wrong • Control – Ensure gains are maintained to guarantee performance
  49. 49. QualityGurus.com DMAIC approachDMAIC approach D Define M Measure A Analyze I Improve C Control Identify and state the practical problem Validate the practical problem by collecting data Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution Confirm and test the statistical solution Convert the statistical solution to a practical solution
  50. 50. QualityGurus.com DefineDefine D Define M Measure A Analyze I Improve C Control VoCVoC - Who wants the project and why ? The scope of project / improvement (SMART Objective) Key team members / resources for the project Critical milestones and stakeholder review Budget allocation
  51. 51. QualityGurus.com MeasureMeasure D Define M Measure A Analyze I Improve C Control Ensure measurement system reliability Prepare data collection plan Collect 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 ?
  52. 52. QualityGurus.com AnalyzeAnalyze D Define M Measure A Analyze I Improve C Control How well or poorly processes are working compared with - Best possible (Benchmarking) - Competitor’s Shows you maximum possible result Don’t focus on symptoms, find the root cause
  53. 53. QualityGurus.com ImproveImprove D Define M Measure A Analyze I Improve C Control 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.
  54. 54. QualityGurus.com ControlControl D Define M Measure A Analyze I Improve C Control Don’t be too hasty to declare victory. How will you maintain to gains made? - Change policy & procedures - Change drawings - Change planning - Revise budget - Training
  55. 55. QualityGurus.com People PowerPeople Power Tell me, I forget. Show me , I remember. Involve me, I understand.
  56. 56. QualityGurus.com 66 σσ TrainingTraining Master Black Belt Black Belts Green Belts Team Members / Yellow Belts Champions Mentor, trainer, and coach of Black Belts and others in the organization. Leader of teams implementing the six sigma methodology on projects. Delivers successful focused projects using the six sigma methodology and tools. Participates on and supports the project teams, typically in the context of his or her existing responsibilities.
  57. 57. QualityGurus.com Champions ChampionChampion • Plans improvement projects • Charters or champions chartering process • Identifies, sponsors and directs Six Sigma projects • Holds regular project reviews in accordance with project charters • Includes Six Sigma requirements in expense and capital budgets
  58. 58. QualityGurus.com Champions ChampionChampion • Identifies and removes organizational and cultural barriers to Six Sigma success. • Rewards and recognizes team and individual accomplishments (formally and informally) • Communicates leadership vision • Monitors and reports Six Sigma progress • Validates Six Sigma project results • Nominates highly qualified Black Belt and/or Green Belt candidates
  59. 59. QualityGurus.com Master Black BeltMaster Black Belt • Enterprise Six Sigma expert • Permanent full-time change agent • Certified Black Belt with additional specialized skills or experience especially useful in deployment of Six Sigma across the enterprise Master Black Belt
  60. 60. QualityGurus.com Master Black BeltMaster Black Belt • Highly proficient in using Six Sigma methodology (e.g., advanced statistical analysis, project management, communications, program administration, teaching, project coaching) • Identifies high-leverage opportunities for applying the Six Sigma • Basic Black Belt training • Green Belt training • Coach / Mentor Black Belts Master Black Belt
  61. 61. QualityGurus.com Black BeltBlack Belt • Six Sigma technical expert • Temporary, full-time change agent (will return to other duties after completing a two to three year tour of duty as a Black Belt) Blac k Belts
  62. 62. QualityGurus.com Black BeltBlack Belt • Leads business process improvement projects where Six Sigma approach is indicated. • Successfully completes high-impact projects that result in tangible benefits to the enterprise • Demonstrated mastery of Black Belt body of knowledge • Demonstrated proficiency at achieving results through the application of the Six Sigma approach • Coach / Mentor Green Belts • Recommends Green Belts for Certification Blac k Belts
  63. 63. QualityGurus.com Green BeltGreen Belt • Six Sigma Project originator • Part-time Six Sigma change agent. Continues to perform normal duties while participating on Six Sigma project teams • Six Sigma champion in local area • Recommends Six Sigma projects • Participates on Six Sigma project teams • Leads Six Sigma teams in local improvement projects Green Belts
  64. 64. QualityGurus.com Yellow BeltYellow Belt • Learns and applies Six Sigma tools to projects • Actively participates in team tasks • Communicates well with other team members • Demonstrates basic improvement tool knowledge • Accepts and executes assignments as determined by team Team Members / Yellow Belts
  65. 65. QualityGurus.com Financial AnalystFinancial Analyst • Validates the baseline status for each project. • Validates the sustained results / savings after completion of the project. • Compiles overall investment vs. benefits on Six Sigma for management reporting. • Will usually be the part of Senior Leadership Team.
  66. 66. QualityGurus.com Project SelectionProject Selection
  67. 67. QualityGurus.com Sources of ProjectsSources of Projects • External Sources: – Voice of Customer • What are we falling short of meeting customer needs? • What are the new needs of customers? – Voice of Market • What are market trends, and are we ready to adapt? – Voice of Competitors • What are we behind our competitors?
  68. 68. QualityGurus.com Sources of ProjectsSources of Projects • Internal Sources: – Voice of Process • Where are the defects, repairs, reworks? • What are the major delays? • What are the major wastes? – Voice of Employee • What concerns or ideas have employees or managers raised? • What are we behind our competitors?
  69. 69. QualityGurus.com Harvesting the Fruit of Six SigmaHarvesting the Fruit of Six Sigma - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Sweet Fruit Design for Repeatability Process Enhancement Bulk of Fruit Process Characterization and Optimization Low Hanging Fruit Seven Basic Tools Ground Fruit Logic and Intuition - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
  70. 70. QualityGurus.com What Qualifies as a Six Sigma ProjectWhat Qualifies as a Six Sigma Project • Three basic qualifications: – There is a gap between current and desired / needed performance. – The cause of problem is not clearly understood. – The solution is not pre-determined, nor is the optimal solution apparent.

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