Javier Garcia - Verdugo Sanchez - Six Sigma Training - W1 Six Sigma Introduction
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Six Sigma is a structured methodology that uses statistical methods to eliminate defects and reduce process variation. It is applied through projects led by specialists using the DMAIC cycle of Define, Measure, Analyze, Improve, and Control. The goals of Six Sigma are to fully meet customer needs economically and achieve breakthrough process improvement and profitability. It supports existing quality programs to make them more successful by providing a framework to consistently deliver precisely defined financial contributions.
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Javier Garcia - Verdugo Sanchez - Six Sigma Training - W1 Six Sigma Introduction
- 1. Introduction to Six Sigmagm Define Measure lAnalyse ImproveImprove Control Week 1 Knorr-Bremse Group When you never… were forced to manufacture a product outside the process capabilityp y discussed with a customer about the measurement method sorted parts to fulfill the specification limits grumbled about too many failures reworks and checksgrumbled about too many failures, reworks and checks discussed about late payments, wrong invoices, delayed hi t t l t it d dshipments, too less or too many items produced identified a cost reduction opportunity which you could not realized . . . than probably, you have Six Sigma already implemented Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 2/26 implemented
- 2. Six Sigma is ... ...a structured methodology for consistent and confident application of selected statistical methodsconsistent and confident application of selected statistical methods in teams lead by specialists trained for it to almost eliminate process variation and failures by processing well-chosen projects within a defined time frame in accordance with the company strategyp y gy and deliver precisely defined and controlled financial contributions. The goals of Six Sigma are: • To fulfil customer needs completely and economically • Breakthrough in process improvement and profitability Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 3/26 Breakthrough in process improvement and profitability Six Sigma as a new Philosophy SIX SIGMA Customer Team work TQM ISO / QS 9000 Fastness Safety Q Value Based Selling KVPy Performance Employees Lean / Kaizen / JIT EFQM Innovation R & D Programs Company values and programs are unified in the Six Sigma Philosophy Th h th l ill b f l Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 4/26 The way how the puzzle will be successful
- 3. Make Existing with Six Sigma Successful Zero defects ...Value up ...top+ The Six Sigma methodology supports the existing programs and values This gives all theand values. This gives all the quality initiatives the further framework to be successful Customer Team workTeam work Fastness Safetyaf ty Performance Employees Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 5/26 Innovation Six Sigma & the DMAIC Cycle Control Maintain DefineMaintain Improvements SPC Control Plans Project charter (SMART) Business Score Card QFD VOC D Documentation QFD + VOC Strategic Goals Project strategy C M Measure B li A l iImprove AI Baseline Analysis Process Map C + E Matrix M t S t Analyze Improve Adjustment to the Optimum FMEA Measurement System Process Capability Definition of critical Inputs FMEA S FMEA Statistical Tests Simulation Tolerancing Statistical Tests Multi-Vari Studies Regression Tolerancing Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 6/26
- 4. Sigma; a Measure of Variability 20 σ σ Standard Deviation M 15 σ σ Mean ency Point of Inflection Point of Inflection 10 Frequ 5 3027242118 0 3027242118 Measurement values of a process or product: µ Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 7/26 e.g. delivery time, process time, length, pressure, speed, acceleration, volt, etc. Six Sigma Means Customer Orientation Internal focus 30% Cost of poor quality 3σ Process 3σ Low delivery quality, high inventories Right First Time < 90% σσσ σσσ 3σ DefectsDefects σσσ σσσ 6σ Process µ Upper Specification Lower Specification 6σ• Customer oriented • 7% Cost of poor quality σσσσσσ • 7% Cost of poor quality • High delivery quality, low inventories • Right First Time 99.9%g t st e 99 9% • Integration of customers & suppliers • Efficient processes and flows Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 8/26 µLSL USL
- 5. “Three Sigma” Process Three Standard Deviations between Mean and customer specification 3σ D f tD f t σσσ σσσ DefectsDefects USLLSL µ (Upper Specification Limit)(Lower Specification Limit) The capability of a process can be characterized based on the metric Mean Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 9/26 µ and the amount of the Variation σ (Standard Deviation). “Six Sigma” Process Six Standard Deviations between Mean und customer specification 6σ σσσσσσ µ USLLSL (Upper Specification Limit)(Lower Specification Limit) The capability of a process can be characterized based on the metric Mean Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 10/26 µ and the amount of the Variation σ (Standard Deviation).
- 6. Example: Tube Manufacturing Customer requirement: 994 1006 mm LSL USL 994 - 1006 mm What is the process capability measured in Länge in mm 1006100410021000998996994 capability measured, in terms of sigma? Could you name reasonsCould you name reasons for the difference? 1006100410021000998996994 Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 11/26 Länge in mm Length in mm Sigma Score Comparison The number of the Standard deviations between the average value and the customer specification 6 5 “Best in the class” 5 4 Sigma 3 2 The most companies S Si D f t /Milli D f t f 1 Sigma measure Defects/Million Defect free Six Sigma 3.4 99.9997% 5 Sigma 230 99 977%5 Sigma 230 99.977% 4 Sigma 6,210 99.4% 3 Sigma 66 810 93% Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 12/26 3 Sigma 66,810 93%
- 7. Benchmark Metric Sigma The relation between Quality and Cost 30% 25% 2σ Cost of Quality 25% 20% 15% 2σ 3σ Continuous improvement 10% 5% 4σ Continuous improvement means cost reduction 5σ 6σ Right First Time 70 90 95 99 99.9 99.9997 % Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 13/26 The Cost Advantage of Optimized Processes Conventional cost of poor quality and losses are easy to recognize but this is only the tip of the icebergrecognize, but this is only the tip of the iceberg … Rework Warranty Inspection Reject/ Compensation DiscountScrap Additional Lost Sales (Tangible) Compensation Discount Technical Changes Long Inventory Turn Times Fixed Capital Lost Sales Lost Opportunities (Easy to overlook) Cost for Inadequate use Late Delivery Inadequate Material O d i / Pl i Image Loss Lost Opportunities Additional Performance Increase Cost for Prioritization of Company Assets Ordering / Planning g Additional hidden cost due to poor quality Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 14/26 Additional hidden cost due to poor quality
- 8. The Success of Six Sigma The Six Sigma Elements r nt n Sales ustomer evelopmen Logistic roductio Quality Finance Supplier C De L Pr F S LEANINGDESIGNING MASTERING Create valuable Products & Performance for the Customer Efficient Processes without Waiting Time Eliminate Defects & reduce Variabilityfor the Customer Waiting Time Price On time SIGMA / DPMO CapableValue Lean Optimized Products and Solutions CapableValue Lean Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 15/26 Optimized Products and Solutions Business Processes vs. Organization FinanceMfg LogisticsSales Materials Mgmt Customer Service Strategy, Business Plan, ObjectivesStrategy, Business Plan, Objectives ss FinanceMfg LogisticsSales Materials Mgmt Customer Service Strategy, Business Plan, ObjectivesStrategy, Business Plan, ObjectivesStrategy, Business Plan, ObjectivesStrategy, Business Plan, Objectives ssss FinanceMfg LogisticsSales MgmtService MeasuresMeasures me,me, chasechase suressures ivery,ivery, stst Application (Product) Development faction FinanceMfg LogisticsSales MgmtService MeasuresMeasures me,me, chasechase MeasuresMeasures me,me, chasechase suressures ivery,ivery, stst suressures ivery,ivery, stst Application (Product) Development faction rValueMrValueM stinTimstinTim eofPurceofPurc ier,Measier,Meas tive,Deltive,Del otalCosotalCos Order to Delivery Produce Products merSatis rValueMrValueM stinTimstinTim eofPurceofPurc rValueMrValueM stinTimstinTim eofPurceofPurc ier,Measier,Meas tive,Deltive,Del otalCosotalCos ier,Measier,Meas tive,Deltive,Del otalCosotalCos Order to Delivery Produce Products merSatis ustomerustomer JusJus ShareShare SupplSuppl DefectDefect ToTo Produce Products Credit and Collections Custom ustomerustomer JusJus ShareShare ustomerustomer JusJus ShareShare SupplSuppl DefectDefect ToTo SupplSuppl DefectDefect ToTo Produce Products Credit and Collections Custom CC Fi i l P f MFi i l P f M CCCC Fi i l P f MFi i l P f MFi i l P f MFi i l P f M Financial Success and Financial Performance MeasuresFinancial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow Financial Success Financial Performance MeasuresFinancial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow Financial Performance MeasuresFinancial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow Financial Success Customer Satisfaction are strongly linked. Experience shows that there is friction in C t i t d th h B i P M t Financial SuccessFinancial Success shows that there is friction in the daily business Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 16/26 Customer oriented through Business Process Management
- 9. A Detailed View Some of the elements are not yet fully developed FinancesCustomer Employees VisionControl Processes Metrics Strategy Analysis Action The DMAIC cycle includes all elements of the chain Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 17/26 The Reason for the Success of Six Sigma Measurable Success FinancesCustomer Employees Control VisionControl Processes Improve DefineMetrics Strategy Analysis Action MeasureAnalysis Success through an integrated approach… Larry Bossidy Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 18/26 Success through an integrated approach… Larry Bossidy
- 10. Example Automotive Efforts to increase the capability of processes are not new… • The SPC stage • The FMEA stage • The cpk > 1.33 stage Actual studies show: 60 % f l ll th 1 2• 60 % of cpk values are smaller than 1.2 • Most of the data sets are not normally distributed Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 19/26 y Improvement Strategies Innovation + CIP ... Steps back vs. Benchmark Innovation Benchmark CIP Do nothing Obviously improvement, but… Structured proceeding and use of Six Sigma tools makes CIP more successful. The innovation steps are getting bigger and time intervals tti ll t th ti Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 20/26 getting smaller at the same time.
- 11. Cost Reduction Programs Development of business sectors lity Protected! Assailable! Profitabil Monopoly position I ceandP position In competition New player Rise in prices Overcapacity Differentiation Pric Genetic engineering Price war Consolidation "Shakeout" PCs engineering Maglev train Time - years 0 5 10 PCs Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 21/26 y Cost Reduction Programs Selling price1. At the beginning of the live cycle Manufacturing cost Profit Market price2 X Years later Manufacturing cost Profit Market price2. .... X Years later Manufacturing cost Profit Cost reduction L TPM K i Eff ti Market price Lean, TPM, Kaizen Six Sigma CIP Effective Fast Big Steps Manufacturing cost Profit Big Steps Lasting Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 22/26
- 12. Cost Reduction Programs Restructuring Approach Product & Program arrangement CostCost Adjustment/ Simplification New business arrangement Product arrangement Design to cost Design to k t p Product- portfolio Country specific dj t t New products Product arrangement Operative market Complexity reduction SalesProcess optimization Sales increase adjustments New applications Sales Operative ProgramsBurden reduction in ancestral areas Restructured cost base Baseline Goal Cost base settlement is necessary for business growth Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 23/26 Cost base settlement is necessary for business growth Cost Reduction Programs The lever for cost reduction should be used always integrated 100% Sales Design to cost •Variants •Complexity Performance Efficiency •Product cycle Manufacturing Material cost Other factor cost S l C it l R & D Performance differences •Service life •Precision y Efficiency •Logistic cycle •Stock •Salary, Capital Admin Factor costProcess designProduct design (Total cost in %) New SituationActual Situation Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 24/26 (Total cost in %)
- 13. Cost Reduction Programs Where can you use Six Sigma for cost reduction? Customer orientedvity hain hain on kets B i oductiv pplyCh enueC nnovatio wmark Business improvements Pro Sup Rev In New Culture change Improvements in all areas will be achieved fast, lasting and effective through a Six Sigma structure Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 25/26 through a Six Sigma structure. Successful Positioning es omer pment stic ction ity nce lier Sale Custo Develop Logis Produc Qual Finan supp Technical Competence Methodical Competence Successful programs and j t d d t Social Competence projects need good team work and good coaching Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 26/26