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Lean management and six sigma

Lean management focuses on eliminating waste and increasing customer value. The seven types of waste are overproduction, waiting, transportation, inappropriate processing, unnecessary inventory, defects, and unnecessary motion. Lean uses less of everything through techniques like just-in-time production to half human effort, space, tools, and new product development time. Six Sigma aims to reduce variation and defects through statistical analysis and defines quality as 3.4 defects per million opportunities. It uses the DMAIC methodology of define, measure, analyze, improve, and control to solve problems and drive process improvement. Various standards like ISO, OHSAS, SA8000, ISO 14000 and ISO 26000 provide frameworks for quality, health and safety, social accountability, and

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Lean Management
Lean • Philosophy and Practice of Eliminating Waste and Increasing Customer Value Principle Apply to Every Function / Activity
Lean WASTE • Activity or Output Adds Cost but Does Not Add Value as Perceived by the End-Use Customer
Providing ‘Value to the Customer’ (Lean thinking focuses primarily on customer) 1) Lean Operations: Value and waste 2) Lean Methodology: Checks for value and waste Difference between: Adding Value to a) Product / Service b) Customer E.g. Customer prefer a simple ‘Masala Dosa’ (value to the customer) with good taste at XXX Restaurant But no value to the customer, if we add Cheddar cheese over Masala Dosa or thin silver wafer or gold plating. All the above ingredients may add value to the product, not to the customer (Value Visualization)
Lean Production •“Uses less of everything compared with mass production (John Krafcik) • half human effort in factory; • half manufacturing space; • half investment in tools, • half engineering hours to develop a new product in half time.
Are Resources Scarce ? NO ! Waste is Abundant
VGD@IIPM
VGD@IIPM
Five Principles of Lean
VGD@IIPM
VGD@IIPM
VGD@IIPM (Mistake Proofing)
Steps to Achieve Lean Systems • Design a Simple Manufacturing System • Recognize room for improvement • Continuously improve lean manufacturing system design
1. Overproduction – Too much, too early or just in case. 2. Waiting – Materials or information are waiting to produce to next process and not moving or having value added 3. Transporting – Materials (or information) transported into, out of or around factory and transport cannot be fully eliminated, but aim is to minimize it. Seven (7) Waste
4. Inappropriate processing – Using machinery or equipment is inappropriate in terms of ‘capacity’ to perform an operation. 5. Unnecessary inventory – Ties up capital & space and prevents identification of problems 6. Defects – Product defects, rework defects, scrap defects or service defects. 7. Unnecessary motion – Ergonomics of the work place.
Seven Waste in Production • Defects • Transportation • Overproduction • Waiting • Processing • Movement • Inventory Scrap/Rework Product Movement Making more Product than can be Sold Operators Waiting Minimize Number of Steps Unnecessary Motion/ Money Sleeping 8. Eliminate Waste in Production !
Eight Wastes • Overproduction • Waiting • Transportation • Processing • Inventory • Movement • Defects • Behaviors Ohno - The Classic “7 Wastes” Emiliani - Eighth Waste
Batch-And-Queue • Producing Goods or Services in Large Quantities of Work are Processed Before Moving to the Next Step Producer Focus Vs. Customer Focus
MUDA • Wasteful activity and does not add value Two Types of MUDAs 1) ‘Mura’ – Un-evenness 2) ‘Muri’ – Over-burdening
Types of Muda • Mura (Unevenness): “Products batched together and pushed through a production plant” • Muri (Overburdening): “Processes and operators do not have Sufficient time to carry out work affects whole process flow”
• Produce more than demand or produce it before needed. • Visible as storage of material. • Producing to speculative demand. • Making more than, earlier than and faster than required by the next process. • Causes for overproduction waste include: • Just-in-case logic • Misuse of automation • Long process setup • Unlevel scheduling • Unbalanced work load • Over engineered Overproduction
• Machine to process eliminated • Principle: Maximize utilization/efficiency of worker than maximizing utilization of machines. • Causes of waiting waste include: • Unbalanced work load • Unplanned maintenance • Long process set-up times • Misuses of automation • Upstream quality problems • Unlevel scheduling Waiting
• Minimized by asking why a specific processing step is needed and product is produced. • Unnecessary processing steps • Causes for processing waste include: • Product changes without process changes • Just-in-case logic • True customer requirements undefined • Over processing to accommodate downtime • Lack of communications • Redundant approvals Processing waste
• Does not add any value to product. • Instead of improving transportation, should be minimized or eliminated (e.g. forming cells). • Causes of transportation waste includes: • Poor plant layout • Poor understanding of the process flow for production • Large batch sizes, long lead times, and large storage areas Transportation
• Workers, machines, and transport (e.g. due to inappropriate location of tools and parts) is waste. • Instead of automating wasted motion, operation itself should be improved. • Causes of motion waste include: • Poor people/machine effectiveness • Inconsistent work methods • Unfavorable facility or cell layout • Poor workplace organization and housekeeping • Extra "busy" movements while waiting Motion
• Pure waste. • Prevent defects instead of finding and repairing defects. • Causes of processing waste include: • Weak process control • Poor quality • Unbalanced inventory level • Deficient planned maintenance • Inadequate education/training/work instructions • Product design • Customer needs not understood Making defective products
• Not taking advantage of people's abilities • Causes of people waste include: • Old guard thinking, politics, the business culture • Poor hiring practices • Low or no investment in training • Low pay, high turnover strategy Under-utilizing people:
VGD@IIPM Operational Aspects of LEAN
Group Work
Lean Management (Seven Wastes) Types of Wastes Wastes Observed Suggestions to Overcome 1) Over production 2) Waiting 3) Transporting
Types of Wastes Wastes Observed Suggestions to Overcome 4) Inappropriate Processing 5) Unnecessary Inventory 6) Defects 7) Unnecessary Motion Lean Management (Seven Wastes) (Contd…)
Example of Lean Management (Seven Wastes) Types of Wastes Wastes Observed Suggestions to Overcome 1) Over production Labour & quality of leaf Proper harvesting & manufacturing schedule 2) Waiting Delay in withering, rolling, fermentation & drying – reduces the quality of made tea Automation & accurate time schedule 3) Transporting Overloading & pressing of harvesting leaf leads to breakage Proper stacking during transportation
Types of Wastes Wastes Observed Suggestions to Overcome 4) Inappropriate Processing Made tea-moisture level above 5% leads to microbial growth & coarseness drying 5) Unnecessary Inventory Hydroscopic- observes moisture & quality detoriation Vacuum packaging 6) Defects Improper cutting, iron content & fiber in made tea TPM & machinery management 7) Unnecessary Motion Labour & energy loss Modification in process layout Lean Management (Seven Wastes) (Contd…)
ISO Standards • ISO 9001 – QMS - Requirements. • ISO 9004 – QMS - Guidelines for performance improvements. • ISO 9000 - QMS - Fundamentals & vocabulary • ISO 9002 & ISO 9003 - Incorporated into ISO 9001:2000
VGD@IIPM ISO 14000 • Environmental Management System
OHSAS (18001) Applicability • Applied to any type of business. • Used by organization of all sizes of nature of their activities of location. • Recognized by employers, employees, customers, suppliers, insurers, shareholders, community, contractors and regulatory agencies. • Proactive and preventive by identification of hazards. • Evaluate and control work related risks.
SA 8000 • Standard for workplace conditions and system for independently verifying factories compliance. • Key issues like child labour, compensation, discrimination, forced labour, working hours-health & safety, freedom of association and disciplinary practices.
Advantages of SA 8000 • Remove inconsistencies among workplace. • Social accountability to promote business contract with MNC. • Guarantee basic rights of workers. • Provide framework for independent verification of the ethical production of all goods. • Companies to demonstrate their commitment to best practice in the ethical manufacture.
Customer Relationship Management (CRM) • Develop collaborative relationship between buyer and customer • Focus on customer delight and profits • Better customer service • Develop loyalty
5Ss 1S 2S 3S 4S 5S Japanese Word SEIRI SEITON SEISO SEIKETSU SHITSUKE English Meaning Sort out unnecessary items in workplace and discard them Arrange necessary items in good order to pick them easily for use Clean workplace completely so that there is no dust Maintain high standards of housekeeping and workplace organization at all times Train people to follow good housekeeping discipline autonomously 5S - Japanese Word
VGD@IIPM
VGD@IIPM 5Ss 1S 2S 3S 4S 5S Japanese Word SEIRI (Sort) SEITON (Straighten) SEISO (Shine) SEIKETSU (Standardize) SHITSUKE (Sustain) English Meaning Sort out unnecessary items in the workplace and discard them Arrange necessary items in good order that can be easily picked up for use Clean the workplace completely so that there is no dust Maintain high standards of housekeeping and workplace organization at all times Train people to follow good housekeeping discipline autonomously Meaning of 5S
5S Examples
ISO 22000 • Integration of ISO 9000 & HACCP • Applicable to all types of organization within food chain
ISO 26000 • Global social responsibility standard • Representation of stakeholders, industry, government, labour, consumer, NGO
 Replacement & enhancement of ISO 27000 & BS 7799 standard contents  Harmonized with other ISO standards ISO 28000 Objective “Model for establishing, implementing, operating, monitoring, reviewing, maintaining and improving an Information Security Management System (I-SMS)”
Supply Chain -- Security Management Systems (SMS) package which establishes:  Security system  protects people  Goods, infrastructure, Equipment  Transportation ISO 28000 It specifies to establish: implement, maintain, improve the audit security management system Package includes ISO 28000:2007, ISO 28001:2007, ISO 28003:2007 and ISO 28004:2007
Six Sigma {Quality Management Systems}
VGD@IIPM
SIX SIGMA  Statistical concept measures a process in terms of defects (SIX sigma) level- 3.4  defects per million opportunities But, it is much more! ("Delivering Tomorrow's Performance Today“)
VGD@IIPM
VGD@IIPM Philosophy  Reduce variation in business and make customer-focused, data driven decisions  Translate customer needs into operational measurements
Six Sigma  Customer first & uses facts and data to derive better solution  Target: •Improving customer satisfaction •Reducing cycle time •Reducing defects
VGD@IIPM
Objectives of Six Sigma  Critical to quality (CTQ): attributes important to customer  Defect (D): failure to deliver a product/service as required by customer  Process Capability (PC): process can deliver the quality  Variation (V): perception of the customer, how he/she sees and feels about the quality of the product  Stable Operations (SO): guarantee a process consistent and predictable with recued variation
Six Sigma Methods Production Design Service Purchase HRM Administration Quality Depart. Management M & S IT Where can Six Sigma be applied?
3 Sigma Vs. 6 Sigma 3 Sigma Company 6 Sigma Company • Spends 15-25% of sales dollars on cost of failure • Spends 5% of sales dollars on cost of failure • Inspection to find defects • don’t produce defects • Does not have a disciplined approach to gather and analyze data • Use Measure, Analyze, Improve, Control (MAIC) and Measure, Analyze, Design (MAD) • Benchmarks against their competition • Benchmarks against the best in the world • Believes 99% is good enough • Believes 99% is unacceptable • Define CTQs internally • Defines CTQs externally
Non-Liner Decrease 2 3 4 5 6 308,537 66,811 6,210 233 3.4 s PPM Process Capability Defects per Million Opportunities * Includes 1.5s shift Focusing on s requires thorough process understanding and break-through thinking Focusing on s requires thorough process understanding and break-through thinking 0 10 20 30 40 50 60 70 80 1 2 3 4 5 6 Process Sigma %Change 0 100000 200000 300000 400000 500000 600000 700000 800000 PPM From 1 to 2 From 3 to 4 From 4 to 5 From 5 to 6 % ChangePPM
WHEN SIX SIGMA BE USED?  Depends on the type of business, “Processes generate lot of negative (customer) feedback,  Customers internal or external, components of Six Sigma considered to study and rectify problem.”
Change Management: Two Alternative Approaches Activity Centered Programs Result Oriented Programs Change Management Source: Schaffer and Thomson, HBR, Jan-Feb. 1992
μ σ What’s in a name?  Greek letter representing standard deviation of population of data.  Measure of variation (data spread)
Variation  Process does not produce same result (“Y”) every time.  Appear in all processes.  Directly affects customer Customers do not feel averages! -10 -5 0 5 10 15 20
Measuring Process Performance (Pizza delivery example. . .)  Customers want pizza delivered fast!  Guarantee = “30 minutes or less”  Measured performance found an average delivery time of 23.5 minutes?  On-time performance is great, right?  Customers must be happy with us, right?
How often delivering on time? Answer: Look at the variation!  Managing by average doesn’t tell the whole story.  Average and variation together show what’s s x 30 min. or less 0 10 20 30 40 50
Process Improvement Goals  Companies want to increase Return On Investment (ROI)
DMAIC Six-Sigma - A “Roadmap” for improvement
Training (1 week)Training (1 week) Work on project (3 weeks) Work on project (3 weeks) ReviewReview Define Throughput time projectThroughput time project 4 months (full time)4 months (full time) Example of a Classic Training strategy
DMAIC? (Define, Measure, Analyze, Improve, Control)  Logical and structured approach to problem solving and process improvement.  Iterative process (continuous improvement)  Quality tool focus on change management
Implementation of Six Sigma  Greek letter Sigma σ - Standard deviation.  Standard deviation: How much variation exists in a set of data, a group of items, or a process/service.  Deliver: 68 percent of service on time, process at "2 sigma" level.  Deliver: 93 percent on time, sounds goods, but operating at only "3 sigma" level of performance.  99.4 percent on time, operating at "4 sigma" level  Six Sigma performed service at 99.9997 percent of the time.
VGD@IIPM Learning from ManufacturingLearning from Manufacturing
Relevance of Six Sigma in Industry Companies Advantage Citibank General Electric Wipro Corp. Cost reduction from 5 to 10 times $ 400 - 500 million savings Eight fold gain over the investment Other Companies Allied Signal, Kodak, Motorola, Texas, Cisco / Telco, Taj Hotels
Six Sigma in Banks ICICI HDFC • Customer deliveries • Account opening • Turnaround time • Card / Cheque • Time taken for credit approval
Difference between Sigma’s Cases 1. Wrong drug prescriptions in Hospitals 2. Unsafe drinking water supply by Water Supply Board 99.73 (4.2 sigma) 54000/yr 2 hrs/month 99.9997 (6 Sigma) One/25 yrs One second / 16 yrs
99.9% is already VERY GOOD But what could happen at a quality level of 99.9% (i.e., 1000 ppm), in our everyday lives (about4.6 )? • More than 3000 newborns accidentally falling from the hands of nurses or doctors each year • 4000 wrong medical prescriptions each year • 400 letters per hour which never arrive at their destination • Two long or short landings at American airports each day How good is good enough?
Six Sigma Levels  Identified at three levels:  Metric  Methodology  Philosophy M2P
Six Sigma Metrics Defects Per Unit (DPU):Total number of defects / total number of product units Total Opportunities (TO): Total number of Units X Opportunities Defects Per Opportunities (DPO): Total number of defects / total opportunity Defects Per Million Opportunities (DPMP):
Metric  3.4 Defects Per Million Opportunities (DPMO)  DPMO allows to take complexity of product/process into account  Refers to statistics. The +-6 standard deviations (sigmas) away from the standard mean  Most companies are within 3 standard deviations of mean
Methodology  Higher the sigma value, better process is capable of producing defect free results. • Six sigma range must have a quality product 99 . 9999998 % of time.
Six Sigma Companies
Six Themes of Six Sigma • Genuine Focus on the Customer • Data and Fact-Driven Management • Process are where the Action is • Proactive Management • Boundaryless Collaboration • Drive for Perfection
1. Genuine Focus on the Customer • Understanding reality of customer • Customer focus is top priority • "Sigma" improvement developed on customer satisfaction and value 2. Data and Fact-Driven Management • Management by fact than opinions and assumptions • Measures key variable for better performance 3. Process are where the Action is • Manager to master in process dimension to build competitive advantage in delivering value to customer
4. Proactive Management • Acting in advance of events than reacting to it (e.g., HACCP) 5. Boundaryless Collaboration • Break down barriers and improve team work up, down and across organization 6. Drive for Perfection • Aim for perfection and tolerate failure
Six Sigma Roles
Define Measure Analyze Improve Control • Establish Team Charter • Identify Sponsor and Team Resources • Administrator Pre-Work • Confirm Team Goal • Define Current State • Collect and Display Data • Determine Process Capability and Speed • Determine Sources of Variation and Time Bottlenecks • Generate Ideas • Conduct Experiments • Create Straw Models • Conduct B’s and C’s • Develop Action Plans • Implement • Develop Control Plan • Monitor Performance • Mistake- Proof Process DMAIC Process and Its Tools {Define phase for formation of project team}
DMADV {Methodology for new product or service}  Define the project  Measure the opportunity  Analyze the process options  Design the process  Verify the performance
Six Sigma Roles  Champion: Business leader rovides overall strategic direction for Six Sigma project team. Individual serves as liaison between management and project team; facilitates the acquisition of resources and support for the project.  Master Black Belts: Quality leaders responsible for strategy, training, mentoring and deployment of Six Sigma.  Black Belts: Six Sigma experts who work projects across the business.  Green Belts: Fully-trained individuals work projects in their job.
Definitions and Tools Six Sigma: Coined by Motorola describe improvement initiatives which express process capability in parts per million. Process with a sigma level of six generates a maximum defect probability of 3.4 parts per million. Champions: Executives and managers with significant overall business responsibility. Selection of individuals with ultimate responsibility for the business ensures black belts to support they need to succeed. Black belt (BB): Process improvement team leader who is trained and certified in Six Sigma methodology and tools who is responsible for successful project execution. Master black belt (MBB): An expert in Six Sigma techniques and application. MBBs play a key role in training and coaching of BBs. Green belt (GB): Like black belt but not a full-time role. DMAIC: Acronym describing the phases of a Six Sigma project – define, measure, analyze, improve and control.
Who are the Players ?  Consultants (e.g., Six Sigma Academy) did initial training which is all done internally now.  Six Sigma Leaders: Champions responsible for selection and monitoring of projects and delivering support to the belts.  Master Black Belts (MBBs): Black belts with a minimum of one extra year of advanced tool learning, business/leadership training, and teaching experience.  Black Belts (BBs): Professionals who lead major projects  Green Belts (GBs): Professionals receive fundamental learning's in the six sigma tools and specify tool training that relate to their project or functional processes.
TechnicalTechnical SkillsSkills SoftSoft SkillsSkills StatisticiansStatisticians MasterMaster BlackBlack BeltsBeltsBlackBlack BeltsBelts Quality ImprovementQuality Improvement FacilitatorsFacilitators BBBBBBBB MBBMBB
Key Concepts of Six Sigma • Critical to Quality: Attributes most important to the customer • Defect: Failure 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
Six Sigma Breakthrough Strategy Players for RBEDS Six Sigma Title Executive Team Champion Master Black Belt Black Belt Green Belt Leaders of Extension RPC & Rubber Board Experts Deputy RPC Development Officers Assistant Development Officer Senior Field Officer / Field Officer One champion per group One master black belt for every 30 black belt
Six Sigma Quality?  Originated at Motorola in early 80’s  Motorola win the 1988 MBNQA  Methodology for disciplined quality improvement  Juran principles apply  Doesn’t use “Quality” in name  With the inclusion of Six Sigma into a sound business system, the major ingredients of a Total Quality Management System are usually in place  Uses a modified Deming Wheel (PDCA)
VGD@IIPM
Six Sigma Process Capability SIGMA DPMO* COPQ** CAPABILITY 6 sigma 3.4 <10% of sales World Class 5 sigma 230 10 to 15% of sales 4 sigma 6200 15 to 20% of sales Industry average 3 sigma 67,000 20 to 30% of sales 2 sigma 310,000 30 to 40% of sales Noncompetitive 1 sigma 700,000 * Defects Per Million Opportunities ** Cost of Poor Quality
Measurement System: How Do We Arrive At Sigma Level ? Identify the CTQs Define Defect Opportunities Look for Defects in Products or Services Arrive at DPO Convert DPMO to Sigma Level Sigma Level Defects Per Million of Opportunity 2 308,537 3 66,807 4 6,210 5 233 6 3,4 DPMOZ
Refer Sigma Table Z % Measurement System: How Do We Arrive At Sigma Level ? Identify the CTQs Points or steps that effects Product Quality Define Defect Opportunities CTQs if not followed will become defects Look for Defects in Products or Services Number of defects per opportunity Arrive at DPO Sigma = Total No. of defects Total Product x Type of defects Convert DPMO to Sigma Level DPO x 10,00,000 How to Calculate Six Sigma ? CTQ=Critical to Quality
Measurement System: How Do We Arrive At Sigma Level ? Identify the CTQs • “Critical to Quality” characteristics or the Customer Requirements for a Product or Service Define Defect Opportunities • Any step in the process where a Defect could occur in a CTQ Look for Defects in Products or Services •Count Defects or failures to meet CTQ requirements in all process steps Arrive at DPO • Defects Per Million Opportunities Convert DPMO to Sigma Level •Use the SIGMA TABLE Sigma level Defects per Million of Opportunity 2 308,537 3 66,807 4 6,210 5 233 6 3,4 DPMOZ
VGD@IIPM Measurement System: How Do We Arrive At Sigma Level by PGDM-ABPM students
VGD@IIPM Measurement System: How Do We Arrive At Sigma Level for Improving Film Industry in India No. of Films = 2000 Identify the CTQs • Quality of film • Acceptability of all types of audience • Limited no. of films per year • Different subjects • Cost-effective film making Define Defect Opportunities • Promoting violence (sex & communal social disturbance) • Limited audience • Films on same subject • High ticket cost • Unhealthy competition Look for Defects in Products or Services • Promoting violence - 200 • Limited audience - 500 • Films on same subject-250 • High ticket cost -100 • Unhealthy competition-100 Total - 1150 Arrive at DPO = 1150/2000 * 5 = 1150/10,000 = 0.115 Convert DPMO to Sigma Level 0.115 * 10,00,000 = 1,15,000 2.75 89 % %Z Refer Sigma Table
Measurement System: How Do We Arrive At Sigma Level for Transport Service in Bangalore ? No. of Buses = 2000 Identify the CTQs • Timeliness • Comfort • Safety • Cost • Travel Time Define Defect Opportunities • Late arrival • Crowd • Rash driving • Variations in cost • Improper time Management Look for Defects in Products or Services • Late arrival - 50 • Crowd - 100 • Rash driving - 15 • Variations in cost- 20 • Improper time - 200 Management Total - 385 Arrive at DPO Sigma= 385/2000 * 5 = 385/10,000 = 0.0385 Convert DPMO to Sigma Level 0.0385 * 10,00,000 = 38,5001.8 38,500 % Sigma Level Defects Per Million of Opportunity DPMOZ
VGD@IIPM • Maturity at harvest e.g., Gladiolus (1-5 buds showing colour) • Care at transportation • Storage at cool temperature (5- 120 c) • Water balance (time between harvesting & place in the water) Measurement System: How Do We Arrive At Sigma Level for Floriculture Export ? Total cut flower = 10,000/day Identify the CTQs Define Defect Opportunities • Less freshness or failure to bloom • Physical damages • Low storage life • Wilt Look for Defects in Products or Services • Less freshness - 200 • Physical damages - 400 • Low storage life - 300 • Wilt - 200 -------- 1100 -------- Arrive at DPO Sigma = 1100 = 0.0275 4 x 10000 Convert to DPMO 0.0275 x 10,00,000 = 27,500 Refer Sigma Table 96.96 3.375 Z %
VGD@IIPM Measurement System: How Do We Arrive at Sigma Level for Rubber Producer’s Society? Total growers = 120 Total No. of sheets = 12,000 Identify the CTQs • Frequent washing of utensils with formalin or lysol • Avoid prolonged dripping of wet sheet before smoke • Use of exact quantity of sodium bisulphide • High temperature in smoke house Define Defect Opportunities • Inadequate washing leads to pinhead bubbles • Prolonged dripping leads to rust formation • Storing in humid atmosphere or concrete floor leads to mould growth • Excessive use of sodium bisulphide • High temperature in smoke house Look for Defects in Products or Services .Inadequate washing - 15 .Prolonged dripping - 10 .Stored in humid - 25 atmosphere .Excessive use of sodium - 25 bisulphide .High temperature -10 in smoke house Total = 85 Arrive at DPO Sigma = 15+10+25+25+10 = 85 12,000x5 60000 =0.0014 Convert DPMO to Sigma Level = 0.0014 x 10,00,000 = 1416.6 4.5 99.87 Refer Sigma Table Z % B.N. The overall sigma percentage is 99.87. Refer sigma column on the Table no. 1 to identify the level of six sigma (i.e., Z value). For example, level of six sigma for 99.87 is 4.5.
VGD@IIPM
VGD@IIPM
Six Sigma for IIPM Housekeeping Services Define Measure Analysis Improve Control Figure out what a defect would be • Leaving streaks on the window • Not cleaning the doors/window properly Find out why, how & how often this defects occur • Less time given for cleaning doors, window, floor (8.30 a.m. to 9.30 a.m.) • Workers are not very effective Time taken and efficiency of each worker was measured • Identify particular employee is better at cleaning Better employee’s working process was taken as standard Company teaches new employees the correct techniques to wash the windows
The Six Sigma Players... High Level Roll-Out Guidelines Phase One Phase Two Phase Three Phase Four Phase Five Phase Six Business units select champions and Master black belts. The number identified depends on the business priorities, but the rule of thumb is 1 champion per business group and 1 master black belt for every 30 black belts. Champions and master black belts are trained in six sigma breakthrough strategy. A deployment plan is developed and presented by each business group. Champions and master black belts identify the first “wave” of projects, and select black belts and cross-functional teams. Master black belts receive additional training. They are “trained to train” black belts and others who will be applying the breakthrough strategy. Black belts begin training and the first wave of projects is launched. Experienced black belts being training green belts. General Awareness Training and Communica- tion
CHAMPIONS Create the vision of six sigma for the company Define the path to implement six sigma across the organization Develop a comprehensive training plan for implementing the breakthrough strategy Carefully select high-impact projects Support development of ‘statistical thinking’ Ask black belts many questions to ensure that they are properly focused Realize the gains by supporting six sigma projects through allocation of resources and removal of roadblocks Hold the ground by implementing black belt recommendations Make sure that project opportunities are acted upon by the organization’s leadership and the finance department Recognize people for their efforts Champion training is one week MASTER BLACK BELTS Understand the big business picture Partner with the champions Get certified as master black belts Develop and deliver training to various levels of the organization Assist in the identification of projects Coach and support black belts in project work Participate in project reviews to offer technical expertise Help train and certify black belts Take on leadership of major programs Facilitate sharing of best practices across the corporation Master black belt training consists of two one-week sessions The Roles of Six Sigma Breakthrough Strategy Players
BLACK BELTS Act as breakthrough strategy experts and be breakthrough strategy enthusiasts Stimulate champion thinking Identify the barriers Lead and direct teams in project execution Report progress to appropriate leadership levels Solicit help from champions when needed Influence without direct authority Determine the most effective tools to apply Prepare a detailed project assessment during the measurement phase Get input from knowledgeable operators, first-line supervisors, and team leaders Teach and coach breakthrough strategy methods and tools Manage project risk Ensure that the results are sustained. GREEN BELTS Function as green belts on a part-time basis, while performing their regular duties Participate on black belt project teams in the context of their existing responsibilities Learn the six sigma methodology as it applies to a particular project Continue to learn and practice the six sigma methods and tools after project completion Green belt training consists of two three- day sessions with three weeks in between. The Roles of Six Sigma Breakthrough Strategy Players
Black Belts Perform the Following Tasks Mentor Teach Coach Transfer Discover Identify Influence Cultivate a network of six sigma individuals at the local organization or site Provide formal training of local personnel in new strategies and tools Provide one-to-one support to local personnel Pass on new strategies and tools in the form of training, workshops, case studies, and local symposia Find application opportunities for six sigma strategies and tools, both internal and external (e.g., suppliers and customers) Highlight/surface business opportunities through partnerships with other organizations Sell the organization on the use of six sigma
Summary  Process methodology focus on quantitatively measuring a process in order to control and improve upon it  Strives for 3.4 Defects Per Million Opportunities (DPMO) within six standard deviations of mean
What is Six Sigma Quality?  Goal is near elimination of defects from any process, product, or service.  Numerical goal 3.467 defects per million opportunities.  Juran once concluded that in the US, close to 1/3 of the work done consisted of redoing what had already been done.  Depending on the industry, ost of Poor Quality (COPQ) could be 20 to 40% of total effort!
Six Sigma  Improvement projects integrated with the goals of the organization.  “divide and conquer” approach as opposed to Continuous Process Improvement.  Implementation is top-down.  Uses concept of “belts” for levels of competency in Six Sigma implementation:  MBB = Master Black Belt  BB = Black Belt  GB = Green Belt Strategy includes: Define Measure Analyze Improve Control
Importance of Six Sigma Focus on improving productivity and quality by reducing impact of “Hidden Factor” leads to high Cost of Poor Quality (COPQ). Statistical and quality tool to increase capacity, reduce cost and improve yields without spending significant capital.
2 Sigma Level Service Efficiency AfterBefore AfterBefore 4 Sigma Level Service Efficiency AfterBefore
Six Sigma Breakthrough Strategy Players for RBEDS Six Sigma Title Executive Team Champion Master Black Belt Black Belt Green Belt Leaders of Extension RPC & Rubber Board Experts Deputy RPC Development Officers Assistant Development Officer Senior Field Officer / Field Officer One champion per group One master black belt for every 30 black belt
Lean management and six sigma

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Lean management and six sigma

  • 1.
  • 2.
    Lean • Philosophy andPractice of Eliminating Waste and Increasing Customer Value Principle Apply to Every Function / Activity
  • 3.
    Lean WASTE • Activity orOutput Adds Cost but Does Not Add Value as Perceived by the End-Use Customer
  • 4.
    Providing ‘Value tothe Customer’ (Lean thinking focuses primarily on customer) 1) Lean Operations: Value and waste 2) Lean Methodology: Checks for value and waste Difference between: Adding Value to a) Product / Service b) Customer E.g. Customer prefer a simple ‘Masala Dosa’ (value to the customer) with good taste at XXX Restaurant But no value to the customer, if we add Cheddar cheese over Masala Dosa or thin silver wafer or gold plating. All the above ingredients may add value to the product, not to the customer (Value Visualization)
  • 5.
    Lean Production •“Uses lessof everything compared with mass production (John Krafcik) • half human effort in factory; • half manufacturing space; • half investment in tools, • half engineering hours to develop a new product in half time.
  • 8.
    Are Resources Scarce? NO ! Waste is Abundant
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
    Steps to AchieveLean Systems • Design a Simple Manufacturing System • Recognize room for improvement • Continuously improve lean manufacturing system design
  • 16.
    1. Overproduction –Too much, too early or just in case. 2. Waiting – Materials or information are waiting to produce to next process and not moving or having value added 3. Transporting – Materials (or information) transported into, out of or around factory and transport cannot be fully eliminated, but aim is to minimize it. Seven (7) Waste
  • 17.
    4. Inappropriate processing– Using machinery or equipment is inappropriate in terms of ‘capacity’ to perform an operation. 5. Unnecessary inventory – Ties up capital & space and prevents identification of problems 6. Defects – Product defects, rework defects, scrap defects or service defects. 7. Unnecessary motion – Ergonomics of the work place.
  • 18.
    Seven Waste inProduction • Defects • Transportation • Overproduction • Waiting • Processing • Movement • Inventory Scrap/Rework Product Movement Making more Product than can be Sold Operators Waiting Minimize Number of Steps Unnecessary Motion/ Money Sleeping 8. Eliminate Waste in Production !
  • 19.
    Eight Wastes • Overproduction •Waiting • Transportation • Processing • Inventory • Movement • Defects • Behaviors Ohno - The Classic “7 Wastes” Emiliani - Eighth Waste
  • 20.
    Batch-And-Queue • Producing Goodsor Services in Large Quantities of Work are Processed Before Moving to the Next Step Producer Focus Vs. Customer Focus
  • 21.
    MUDA • Wasteful activityand does not add value Two Types of MUDAs 1) ‘Mura’ – Un-evenness 2) ‘Muri’ – Over-burdening
  • 22.
    Types of Muda •Mura (Unevenness): “Products batched together and pushed through a production plant” • Muri (Overburdening): “Processes and operators do not have Sufficient time to carry out work affects whole process flow”
  • 33.
    • Produce morethan demand or produce it before needed. • Visible as storage of material. • Producing to speculative demand. • Making more than, earlier than and faster than required by the next process. • Causes for overproduction waste include: • Just-in-case logic • Misuse of automation • Long process setup • Unlevel scheduling • Unbalanced work load • Over engineered Overproduction
  • 34.
    • Machine toprocess eliminated • Principle: Maximize utilization/efficiency of worker than maximizing utilization of machines. • Causes of waiting waste include: • Unbalanced work load • Unplanned maintenance • Long process set-up times • Misuses of automation • Upstream quality problems • Unlevel scheduling Waiting
  • 35.
    • Minimized byasking why a specific processing step is needed and product is produced. • Unnecessary processing steps • Causes for processing waste include: • Product changes without process changes • Just-in-case logic • True customer requirements undefined • Over processing to accommodate downtime • Lack of communications • Redundant approvals Processing waste
  • 36.
    • Does notadd any value to product. • Instead of improving transportation, should be minimized or eliminated (e.g. forming cells). • Causes of transportation waste includes: • Poor plant layout • Poor understanding of the process flow for production • Large batch sizes, long lead times, and large storage areas Transportation
  • 37.
    • Workers, machines,and transport (e.g. due to inappropriate location of tools and parts) is waste. • Instead of automating wasted motion, operation itself should be improved. • Causes of motion waste include: • Poor people/machine effectiveness • Inconsistent work methods • Unfavorable facility or cell layout • Poor workplace organization and housekeeping • Extra "busy" movements while waiting Motion
  • 38.
    • Pure waste. •Prevent defects instead of finding and repairing defects. • Causes of processing waste include: • Weak process control • Poor quality • Unbalanced inventory level • Deficient planned maintenance • Inadequate education/training/work instructions • Product design • Customer needs not understood Making defective products
  • 39.
    • Not takingadvantage of people's abilities • Causes of people waste include: • Old guard thinking, politics, the business culture • Poor hiring practices • Low or no investment in training • Low pay, high turnover strategy Under-utilizing people:
  • 40.
  • 41.
  • 42.
    Lean Management (SevenWastes) Types of Wastes Wastes Observed Suggestions to Overcome 1) Over production 2) Waiting 3) Transporting
  • 43.
    Types of WastesWastes Observed Suggestions to Overcome 4) Inappropriate Processing 5) Unnecessary Inventory 6) Defects 7) Unnecessary Motion Lean Management (Seven Wastes) (Contd…)
  • 44.
    Example of LeanManagement (Seven Wastes) Types of Wastes Wastes Observed Suggestions to Overcome 1) Over production Labour & quality of leaf Proper harvesting & manufacturing schedule 2) Waiting Delay in withering, rolling, fermentation & drying – reduces the quality of made tea Automation & accurate time schedule 3) Transporting Overloading & pressing of harvesting leaf leads to breakage Proper stacking during transportation
  • 45.
    Types of WastesWastes Observed Suggestions to Overcome 4) Inappropriate Processing Made tea-moisture level above 5% leads to microbial growth & coarseness drying 5) Unnecessary Inventory Hydroscopic- observes moisture & quality detoriation Vacuum packaging 6) Defects Improper cutting, iron content & fiber in made tea TPM & machinery management 7) Unnecessary Motion Labour & energy loss Modification in process layout Lean Management (Seven Wastes) (Contd…)
  • 46.
    ISO Standards • ISO9001 – QMS - Requirements. • ISO 9004 – QMS - Guidelines for performance improvements. • ISO 9000 - QMS - Fundamentals & vocabulary • ISO 9002 & ISO 9003 - Incorporated into ISO 9001:2000
  • 47.
  • 48.
    OHSAS (18001) Applicability •Applied to any type of business. • Used by organization of all sizes of nature of their activities of location. • Recognized by employers, employees, customers, suppliers, insurers, shareholders, community, contractors and regulatory agencies. • Proactive and preventive by identification of hazards. • Evaluate and control work related risks.
  • 49.
    SA 8000 • Standardfor workplace conditions and system for independently verifying factories compliance. • Key issues like child labour, compensation, discrimination, forced labour, working hours-health & safety, freedom of association and disciplinary practices.
  • 50.
    Advantages of SA8000 • Remove inconsistencies among workplace. • Social accountability to promote business contract with MNC. • Guarantee basic rights of workers. • Provide framework for independent verification of the ethical production of all goods. • Companies to demonstrate their commitment to best practice in the ethical manufacture.
  • 51.
    Customer Relationship Management (CRM) •Develop collaborative relationship between buyer and customer • Focus on customer delight and profits • Better customer service • Develop loyalty
  • 52.
    5Ss 1S 2S 3S 4S 5S Japanese Word SEIRI SEITON SEISO SEIKETSU SHITSUKE English Meaning Sortout unnecessary items in workplace and discard them Arrange necessary items in good order to pick them easily for use Clean workplace completely so that there is no dust Maintain high standards of housekeeping and workplace organization at all times Train people to follow good housekeeping discipline autonomously 5S - Japanese Word
  • 53.
  • 54.
    VGD@IIPM 5Ss 1S 2S 3S 4S 5S Japanese Word SEIRI (Sort) SEITON (Straighten) SEISO (Shine) SEIKETSU (Standardize) SHITSUKE (Sustain) English Meaning Sortout unnecessary items in the workplace and discard them Arrange necessary items in good order that can be easily picked up for use Clean the workplace completely so that there is no dust Maintain high standards of housekeeping and workplace organization at all times Train people to follow good housekeeping discipline autonomously Meaning of 5S
  • 55.
  • 56.
    ISO 22000 • Integrationof ISO 9000 & HACCP • Applicable to all types of organization within food chain
  • 57.
    ISO 26000 • Globalsocial responsibility standard • Representation of stakeholders, industry, government, labour, consumer, NGO
  • 58.
     Replacement &enhancement of ISO 27000 & BS 7799 standard contents  Harmonized with other ISO standards ISO 28000 Objective “Model for establishing, implementing, operating, monitoring, reviewing, maintaining and improving an Information Security Management System (I-SMS)”
  • 59.
    Supply Chain --Security Management Systems (SMS) package which establishes:  Security system  protects people  Goods, infrastructure, Equipment  Transportation ISO 28000 It specifies to establish: implement, maintain, improve the audit security management system Package includes ISO 28000:2007, ISO 28001:2007, ISO 28003:2007 and ISO 28004:2007
  • 60.
  • 61.
  • 62.
    SIX SIGMA  Statisticalconcept measures a process in terms of defects (SIX sigma) level- 3.4  defects per million opportunities But, it is much more! ("Delivering Tomorrow's Performance Today“)
  • 63.
  • 64.
    VGD@IIPM Philosophy  Reduce variationin business and make customer-focused, data driven decisions  Translate customer needs into operational measurements
  • 65.
    Six Sigma  Customerfirst & uses facts and data to derive better solution  Target: •Improving customer satisfaction •Reducing cycle time •Reducing defects
  • 66.
  • 68.
    Objectives of SixSigma  Critical to quality (CTQ): attributes important to customer  Defect (D): failure to deliver a product/service as required by customer  Process Capability (PC): process can deliver the quality  Variation (V): perception of the customer, how he/she sees and feels about the quality of the product  Stable Operations (SO): guarantee a process consistent and predictable with recued variation
  • 69.
  • 70.
    3 Sigma Vs.6 Sigma 3 Sigma Company 6 Sigma Company • Spends 15-25% of sales dollars on cost of failure • Spends 5% of sales dollars on cost of failure • Inspection to find defects • don’t produce defects • Does not have a disciplined approach to gather and analyze data • Use Measure, Analyze, Improve, Control (MAIC) and Measure, Analyze, Design (MAD) • Benchmarks against their competition • Benchmarks against the best in the world • Believes 99% is good enough • Believes 99% is unacceptable • Define CTQs internally • Defines CTQs externally
  • 71.
    Non-Liner Decrease 2 3 4 5 6 308,537 66,811 6,210 233 3.4 s PPM Process Capability Defectsper Million Opportunities * Includes 1.5s shift Focusing on s requires thorough process understanding and break-through thinking Focusing on s requires thorough process understanding and break-through thinking 0 10 20 30 40 50 60 70 80 1 2 3 4 5 6 Process Sigma %Change 0 100000 200000 300000 400000 500000 600000 700000 800000 PPM From 1 to 2 From 3 to 4 From 4 to 5 From 5 to 6 % ChangePPM
  • 72.
    WHEN SIX SIGMABE USED?  Depends on the type of business, “Processes generate lot of negative (customer) feedback,  Customers internal or external, components of Six Sigma considered to study and rectify problem.”
  • 73.
    Change Management: TwoAlternative Approaches Activity Centered Programs Result Oriented Programs Change Management Source: Schaffer and Thomson, HBR, Jan-Feb. 1992
  • 74.
    μ σ What’s in aname?  Greek letter representing standard deviation of population of data.  Measure of variation (data spread)
  • 75.
    Variation  Process doesnot produce same result (“Y”) every time.  Appear in all processes.  Directly affects customer Customers do not feel averages! -10 -5 0 5 10 15 20
  • 76.
    Measuring Process Performance (Pizza deliveryexample. . .)  Customers want pizza delivered fast!  Guarantee = “30 minutes or less”  Measured performance found an average delivery time of 23.5 minutes?  On-time performance is great, right?  Customers must be happy with us, right?
  • 77.
    How often deliveringon time? Answer: Look at the variation!  Managing by average doesn’t tell the whole story.  Average and variation together show what’s s x 30 min. or less 0 10 20 30 40 50
  • 78.
    Process Improvement Goals Companies want to increase Return On Investment (ROI)
  • 80.
    DMAIC Six-Sigma - A“Roadmap” for improvement
  • 81.
    Training (1 week)Training(1 week) Work on project (3 weeks) Work on project (3 weeks) ReviewReview Define Throughput time projectThroughput time project 4 months (full time)4 months (full time) Example of a Classic Training strategy
  • 82.
    DMAIC? (Define, Measure, Analyze,Improve, Control)  Logical and structured approach to problem solving and process improvement.  Iterative process (continuous improvement)  Quality tool focus on change management
  • 83.
    Implementation of SixSigma  Greek letter Sigma σ - Standard deviation.  Standard deviation: How much variation exists in a set of data, a group of items, or a process/service.  Deliver: 68 percent of service on time, process at "2 sigma" level.  Deliver: 93 percent on time, sounds goods, but operating at only "3 sigma" level of performance.  99.4 percent on time, operating at "4 sigma" level  Six Sigma performed service at 99.9997 percent of the time.
  • 84.
  • 85.
    Relevance of SixSigma in Industry Companies Advantage Citibank General Electric Wipro Corp. Cost reduction from 5 to 10 times $ 400 - 500 million savings Eight fold gain over the investment Other Companies Allied Signal, Kodak, Motorola, Texas, Cisco / Telco, Taj Hotels
  • 86.
    Six Sigma inBanks ICICI HDFC • Customer deliveries • Account opening • Turnaround time • Card / Cheque • Time taken for credit approval
  • 87.
    Difference between Sigma’s Cases 1.Wrong drug prescriptions in Hospitals 2. Unsafe drinking water supply by Water Supply Board 99.73 (4.2 sigma) 54000/yr 2 hrs/month 99.9997 (6 Sigma) One/25 yrs One second / 16 yrs
  • 88.
    99.9% is alreadyVERY GOOD But what could happen at a quality level of 99.9% (i.e., 1000 ppm), in our everyday lives (about4.6 )? • More than 3000 newborns accidentally falling from the hands of nurses or doctors each year • 4000 wrong medical prescriptions each year • 400 letters per hour which never arrive at their destination • Two long or short landings at American airports each day How good is good enough?
  • 89.
    Six Sigma Levels Identified at three levels:  Metric  Methodology  Philosophy M2P
  • 90.
    Six Sigma Metrics DefectsPer Unit (DPU):Total number of defects / total number of product units Total Opportunities (TO): Total number of Units X Opportunities Defects Per Opportunities (DPO): Total number of defects / total opportunity Defects Per Million Opportunities (DPMP):
  • 91.
    Metric  3.4 DefectsPer Million Opportunities (DPMO)  DPMO allows to take complexity of product/process into account  Refers to statistics. The +-6 standard deviations (sigmas) away from the standard mean  Most companies are within 3 standard deviations of mean
  • 92.
    Methodology  Higher thesigma value, better process is capable of producing defect free results. • Six sigma range must have a quality product 99 . 9999998 % of time.
  • 93.
  • 94.
    Six Themes ofSix Sigma • Genuine Focus on the Customer • Data and Fact-Driven Management • Process are where the Action is • Proactive Management • Boundaryless Collaboration • Drive for Perfection
  • 95.
    1. Genuine Focuson the Customer • Understanding reality of customer • Customer focus is top priority • "Sigma" improvement developed on customer satisfaction and value 2. Data and Fact-Driven Management • Management by fact than opinions and assumptions • Measures key variable for better performance 3. Process are where the Action is • Manager to master in process dimension to build competitive advantage in delivering value to customer
  • 96.
    4. Proactive Management •Acting in advance of events than reacting to it (e.g., HACCP) 5. Boundaryless Collaboration • Break down barriers and improve team work up, down and across organization 6. Drive for Perfection • Aim for perfection and tolerate failure
  • 97.
  • 98.
    Define Measure AnalyzeImprove Control • Establish Team Charter • Identify Sponsor and Team Resources • Administrator Pre-Work • Confirm Team Goal • Define Current State • Collect and Display Data • Determine Process Capability and Speed • Determine Sources of Variation and Time Bottlenecks • Generate Ideas • Conduct Experiments • Create Straw Models • Conduct B’s and C’s • Develop Action Plans • Implement • Develop Control Plan • Monitor Performance • Mistake- Proof Process DMAIC Process and Its Tools {Define phase for formation of project team}
  • 99.
    DMADV {Methodology for newproduct or service}  Define the project  Measure the opportunity  Analyze the process options  Design the process  Verify the performance
  • 100.
    Six Sigma Roles Champion: Business leader rovides overall strategic direction for Six Sigma project team. Individual serves as liaison between management and project team; facilitates the acquisition of resources and support for the project.  Master Black Belts: Quality leaders responsible for strategy, training, mentoring and deployment of Six Sigma.  Black Belts: Six Sigma experts who work projects across the business.  Green Belts: Fully-trained individuals work projects in their job.
  • 101.
    Definitions and Tools SixSigma: Coined by Motorola describe improvement initiatives which express process capability in parts per million. Process with a sigma level of six generates a maximum defect probability of 3.4 parts per million. Champions: Executives and managers with significant overall business responsibility. Selection of individuals with ultimate responsibility for the business ensures black belts to support they need to succeed. Black belt (BB): Process improvement team leader who is trained and certified in Six Sigma methodology and tools who is responsible for successful project execution. Master black belt (MBB): An expert in Six Sigma techniques and application. MBBs play a key role in training and coaching of BBs. Green belt (GB): Like black belt but not a full-time role. DMAIC: Acronym describing the phases of a Six Sigma project – define, measure, analyze, improve and control.
  • 102.
    Who are thePlayers ?  Consultants (e.g., Six Sigma Academy) did initial training which is all done internally now.  Six Sigma Leaders: Champions responsible for selection and monitoring of projects and delivering support to the belts.  Master Black Belts (MBBs): Black belts with a minimum of one extra year of advanced tool learning, business/leadership training, and teaching experience.  Black Belts (BBs): Professionals who lead major projects  Green Belts (GBs): Professionals receive fundamental learning's in the six sigma tools and specify tool training that relate to their project or functional processes.
  • 103.
  • 104.
    Key Concepts ofSix Sigma • Critical to Quality: Attributes most important to the customer • Defect: Failure 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
  • 105.
    Six Sigma BreakthroughStrategy Players for RBEDS Six Sigma Title Executive Team Champion Master Black Belt Black Belt Green Belt Leaders of Extension RPC & Rubber Board Experts Deputy RPC Development Officers Assistant Development Officer Senior Field Officer / Field Officer One champion per group One master black belt for every 30 black belt
  • 106.
    Six Sigma Quality? Originated at Motorola in early 80’s  Motorola win the 1988 MBNQA  Methodology for disciplined quality improvement  Juran principles apply  Doesn’t use “Quality” in name  With the inclusion of Six Sigma into a sound business system, the major ingredients of a Total Quality Management System are usually in place  Uses a modified Deming Wheel (PDCA)
  • 107.
  • 108.
    Six Sigma ProcessCapability SIGMA DPMO* COPQ** CAPABILITY 6 sigma 3.4 <10% of sales World Class 5 sigma 230 10 to 15% of sales 4 sigma 6200 15 to 20% of sales Industry average 3 sigma 67,000 20 to 30% of sales 2 sigma 310,000 30 to 40% of sales Noncompetitive 1 sigma 700,000 * Defects Per Million Opportunities ** Cost of Poor Quality
  • 109.
    Measurement System: How DoWe Arrive At Sigma Level ? Identify the CTQs Define Defect Opportunities Look for Defects in Products or Services Arrive at DPO Convert DPMO to Sigma Level Sigma Level Defects Per Million of Opportunity 2 308,537 3 66,807 4 6,210 5 233 6 3,4 DPMOZ
  • 110.
    Refer Sigma Table Z % Measurement System: HowDo We Arrive At Sigma Level ? Identify the CTQs Points or steps that effects Product Quality Define Defect Opportunities CTQs if not followed will become defects Look for Defects in Products or Services Number of defects per opportunity Arrive at DPO Sigma = Total No. of defects Total Product x Type of defects Convert DPMO to Sigma Level DPO x 10,00,000 How to Calculate Six Sigma ? CTQ=Critical to Quality
  • 111.
    Measurement System: How DoWe Arrive At Sigma Level ? Identify the CTQs • “Critical to Quality” characteristics or the Customer Requirements for a Product or Service Define Defect Opportunities • Any step in the process where a Defect could occur in a CTQ Look for Defects in Products or Services •Count Defects or failures to meet CTQ requirements in all process steps Arrive at DPO • Defects Per Million Opportunities Convert DPMO to Sigma Level •Use the SIGMA TABLE Sigma level Defects per Million of Opportunity 2 308,537 3 66,807 4 6,210 5 233 6 3,4 DPMOZ
  • 112.
    VGD@IIPM Measurement System: How DoWe Arrive At Sigma Level by PGDM-ABPM students
  • 113.
    VGD@IIPM Measurement System: How DoWe Arrive At Sigma Level for Improving Film Industry in India No. of Films = 2000 Identify the CTQs • Quality of film • Acceptability of all types of audience • Limited no. of films per year • Different subjects • Cost-effective film making Define Defect Opportunities • Promoting violence (sex & communal social disturbance) • Limited audience • Films on same subject • High ticket cost • Unhealthy competition Look for Defects in Products or Services • Promoting violence - 200 • Limited audience - 500 • Films on same subject-250 • High ticket cost -100 • Unhealthy competition-100 Total - 1150 Arrive at DPO = 1150/2000 * 5 = 1150/10,000 = 0.115 Convert DPMO to Sigma Level 0.115 * 10,00,000 = 1,15,000 2.75 89 % %Z Refer Sigma Table
  • 114.
    Measurement System: How DoWe Arrive At Sigma Level for Transport Service in Bangalore ? No. of Buses = 2000 Identify the CTQs • Timeliness • Comfort • Safety • Cost • Travel Time Define Defect Opportunities • Late arrival • Crowd • Rash driving • Variations in cost • Improper time Management Look for Defects in Products or Services • Late arrival - 50 • Crowd - 100 • Rash driving - 15 • Variations in cost- 20 • Improper time - 200 Management Total - 385 Arrive at DPO Sigma= 385/2000 * 5 = 385/10,000 = 0.0385 Convert DPMO to Sigma Level 0.0385 * 10,00,000 = 38,5001.8 38,500 % Sigma Level Defects Per Million of Opportunity DPMOZ
  • 115.
    VGD@IIPM • Maturity atharvest e.g., Gladiolus (1-5 buds showing colour) • Care at transportation • Storage at cool temperature (5- 120 c) • Water balance (time between harvesting & place in the water) Measurement System: How Do We Arrive At Sigma Level for Floriculture Export ? Total cut flower = 10,000/day Identify the CTQs Define Defect Opportunities • Less freshness or failure to bloom • Physical damages • Low storage life • Wilt Look for Defects in Products or Services • Less freshness - 200 • Physical damages - 400 • Low storage life - 300 • Wilt - 200 -------- 1100 -------- Arrive at DPO Sigma = 1100 = 0.0275 4 x 10000 Convert to DPMO 0.0275 x 10,00,000 = 27,500 Refer Sigma Table 96.96 3.375 Z %
  • 116.
    VGD@IIPM Measurement System: How DoWe Arrive at Sigma Level for Rubber Producer’s Society? Total growers = 120 Total No. of sheets = 12,000 Identify the CTQs • Frequent washing of utensils with formalin or lysol • Avoid prolonged dripping of wet sheet before smoke • Use of exact quantity of sodium bisulphide • High temperature in smoke house Define Defect Opportunities • Inadequate washing leads to pinhead bubbles • Prolonged dripping leads to rust formation • Storing in humid atmosphere or concrete floor leads to mould growth • Excessive use of sodium bisulphide • High temperature in smoke house Look for Defects in Products or Services .Inadequate washing - 15 .Prolonged dripping - 10 .Stored in humid - 25 atmosphere .Excessive use of sodium - 25 bisulphide .High temperature -10 in smoke house Total = 85 Arrive at DPO Sigma = 15+10+25+25+10 = 85 12,000x5 60000 =0.0014 Convert DPMO to Sigma Level = 0.0014 x 10,00,000 = 1416.6 4.5 99.87 Refer Sigma Table Z % B.N. The overall sigma percentage is 99.87. Refer sigma column on the Table no. 1 to identify the level of six sigma (i.e., Z value). For example, level of six sigma for 99.87 is 4.5.
  • 117.
  • 118.
  • 119.
    Six Sigma forIIPM Housekeeping Services Define Measure Analysis Improve Control Figure out what a defect would be • Leaving streaks on the window • Not cleaning the doors/window properly Find out why, how & how often this defects occur • Less time given for cleaning doors, window, floor (8.30 a.m. to 9.30 a.m.) • Workers are not very effective Time taken and efficiency of each worker was measured • Identify particular employee is better at cleaning Better employee’s working process was taken as standard Company teaches new employees the correct techniques to wash the windows
  • 120.
    The Six SigmaPlayers... High Level Roll-Out Guidelines Phase One Phase Two Phase Three Phase Four Phase Five Phase Six Business units select champions and Master black belts. The number identified depends on the business priorities, but the rule of thumb is 1 champion per business group and 1 master black belt for every 30 black belts. Champions and master black belts are trained in six sigma breakthrough strategy. A deployment plan is developed and presented by each business group. Champions and master black belts identify the first “wave” of projects, and select black belts and cross-functional teams. Master black belts receive additional training. They are “trained to train” black belts and others who will be applying the breakthrough strategy. Black belts begin training and the first wave of projects is launched. Experienced black belts being training green belts. General Awareness Training and Communica- tion
  • 121.
    CHAMPIONS Create the visionof six sigma for the company Define the path to implement six sigma across the organization Develop a comprehensive training plan for implementing the breakthrough strategy Carefully select high-impact projects Support development of ‘statistical thinking’ Ask black belts many questions to ensure that they are properly focused Realize the gains by supporting six sigma projects through allocation of resources and removal of roadblocks Hold the ground by implementing black belt recommendations Make sure that project opportunities are acted upon by the organization’s leadership and the finance department Recognize people for their efforts Champion training is one week MASTER BLACK BELTS Understand the big business picture Partner with the champions Get certified as master black belts Develop and deliver training to various levels of the organization Assist in the identification of projects Coach and support black belts in project work Participate in project reviews to offer technical expertise Help train and certify black belts Take on leadership of major programs Facilitate sharing of best practices across the corporation Master black belt training consists of two one-week sessions The Roles of Six Sigma Breakthrough Strategy Players
  • 122.
    BLACK BELTS Act asbreakthrough strategy experts and be breakthrough strategy enthusiasts Stimulate champion thinking Identify the barriers Lead and direct teams in project execution Report progress to appropriate leadership levels Solicit help from champions when needed Influence without direct authority Determine the most effective tools to apply Prepare a detailed project assessment during the measurement phase Get input from knowledgeable operators, first-line supervisors, and team leaders Teach and coach breakthrough strategy methods and tools Manage project risk Ensure that the results are sustained. GREEN BELTS Function as green belts on a part-time basis, while performing their regular duties Participate on black belt project teams in the context of their existing responsibilities Learn the six sigma methodology as it applies to a particular project Continue to learn and practice the six sigma methods and tools after project completion Green belt training consists of two three- day sessions with three weeks in between. The Roles of Six Sigma Breakthrough Strategy Players
  • 123.
    Black Belts Performthe Following Tasks Mentor Teach Coach Transfer Discover Identify Influence Cultivate a network of six sigma individuals at the local organization or site Provide formal training of local personnel in new strategies and tools Provide one-to-one support to local personnel Pass on new strategies and tools in the form of training, workshops, case studies, and local symposia Find application opportunities for six sigma strategies and tools, both internal and external (e.g., suppliers and customers) Highlight/surface business opportunities through partnerships with other organizations Sell the organization on the use of six sigma
  • 124.
    Summary  Process methodologyfocus on quantitatively measuring a process in order to control and improve upon it  Strives for 3.4 Defects Per Million Opportunities (DPMO) within six standard deviations of mean
  • 125.
    What is SixSigma Quality?  Goal is near elimination of defects from any process, product, or service.  Numerical goal 3.467 defects per million opportunities.  Juran once concluded that in the US, close to 1/3 of the work done consisted of redoing what had already been done.  Depending on the industry, ost of Poor Quality (COPQ) could be 20 to 40% of total effort!
  • 127.
    Six Sigma  Improvementprojects integrated with the goals of the organization.  “divide and conquer” approach as opposed to Continuous Process Improvement.  Implementation is top-down.  Uses concept of “belts” for levels of competency in Six Sigma implementation:  MBB = Master Black Belt  BB = Black Belt  GB = Green Belt Strategy includes: Define Measure Analyze Improve Control
  • 128.
    Importance of SixSigma Focus on improving productivity and quality by reducing impact of “Hidden Factor” leads to high Cost of Poor Quality (COPQ). Statistical and quality tool to increase capacity, reduce cost and improve yields without spending significant capital.
  • 129.
    2 Sigma LevelService Efficiency AfterBefore AfterBefore 4 Sigma Level Service Efficiency AfterBefore
  • 130.
    Six Sigma BreakthroughStrategy Players for RBEDS Six Sigma Title Executive Team Champion Master Black Belt Black Belt Green Belt Leaders of Extension RPC & Rubber Board Experts Deputy RPC Development Officers Assistant Development Officer Senior Field Officer / Field Officer One champion per group One master black belt for every 30 black belt

Editor's Notes

  • #63 Six Sigma is a methodology that provides businesses with the tools to improve the capability of their business processes. This increase in performance and decrease in process variation leads to defect reduction and vast improvement in profits, employee morale and quality of product.
  • #65 Data is key here. Six Sigma has it’s foundation in Statistics and measurements
  • #67 Lean has traditionally focused on cycle time reduction, inventory reduction, reduction of floor space, by the elimination of the 7 hidden wastes. Six Sigma has traditionally focuses on variance reduction (the elimination of “noise factors”) to improve quality. The goal of both is to produce a financial benefit.
  • #83 Define process goals in terms of key critical parameters (i.e. critical to quality or critical to production) on the basis of customer requirements or Voice Of Customer (VOC) Measure the current process performance in context of goals Analyze the current scenario in terms of causes of variations and defects Improve the process by systematically reducing variation and eliminating defects Control future performance of the process DMAIC is a basic component of the Six Sigma methodology- a way to improve work processes by eliminating defects. The Six Sigma methodology is widely used in many top corporations in the United States and around the world. It is normally defined as a set of practices that improve efficiency and eliminate defects. Six Sigma has been around for more than 20 years and heavily influenced by TQM (total quality management) and Zero Defect principles. In its methodology, it asserts that in order to achieve high quality manufacturing and business processes, continued efforts must be made to reduce variations.
  • #85 Initial skepticism was fueled somewhat by our learning from manufacturing. However, the bigger skepticism came from our own history with performance improvement.... Flavor of the Month... Bottom up rather than top down... No commitment from the top...
  • #93 Recall from Elementary Statistics the standard deviation graph
  • #107 &amp;gt;Juran said that “all quality improvement occurs on a project-by-project basis and in no other way” . This philosophy is considered an essential element in Six Sigma. By not using “quality” or “statistics” in the name, it is perceived to be a business system that improves bottom line and only brings in technical details as needed; TQM is perceived to be a technical quality system owned by technical specialists rather than all employees. &amp;gt;Uses a simple but effective management structure and this in truly a strength. By contrast, TQM required a complex and rigid management structure of many levels.
  • #126 Why is this so difficult for software and software services? Remember, SS started in Motorola’s manufacturing divisions where the concept of Statistical Process Control (SPC) was already adopted. We refuse to adopt SPC for software projects because we continue to believe that it doesn’t apply. However, if we are going to continue to use the term “process” then we should also use SPC in order to measure and improve those same processes. Most IT shops haven’t a clue as to how well they are doing now.