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Six sigma introduction
Six Sigma is a method for process improvement that aims to reduce defects. It uses statistical tools and a DMAIC framework of Define, Measure, Analyze, Improve, and Control. The goal is to drive processes to near perfection with as few as 3.4 defects per million opportunities. Adopting Six Sigma requires training staff at all levels and selecting projects that can generate significant savings. While implementation presents challenges, many companies have achieved billions in savings through Six Sigma's systematic approach to reducing variation and defects.
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Six sigma introduction
- 1. Six Sigma Breakthrough Strategy or YourWorse Nightmare? Jeffrey T. Gotro, Ph.D. Director of Research & Development Ablestik Laboratories
- 2. 2 Agenda ƒ What isSix Sigma? ƒ What are the challenges? ƒ What are the rewards? ƒ Summary and Questions
- 3. 3 Six Sigma hasmany meanings „ A Symbol „ A Measure „ A Benchmark or Goal „ A Method σ
- 4. 4 Six Sigma: ASymbol „ σ is a Statistical Symbol for Standard Deviation „ Standard Deviation is a Measure of Variability
- 5. 5 Six Sigma: AMeasure „ The “Sigma Level” of a process can be used to express its capability { How well it performs with respect to customer requirements. „ Defects per million opportunities
- 6. 6 Doing the math 6Sigma = 3.4 defects per million 5 Sigma = 230 defects per million 4 Sigma = 6,210 defects per million 3 Sigma = 66,800 defects per million 2 Sigma = 308,000 defects per million 1 Sigma = 690,000 defects per million
- 7. 7 Some Examples toIllustrate Typical Defect Rates 2 3 4 5 6 7 10K 1K 100 10 (230 ppm) Purchased Material Lot Reject Rate (0.43 ppm) Payroll Processing Journal Vouchers Wire Transfers Air Line Baggage Handling Order Write-up IRS - Tax Advice (phone-in) Best in Class Domestic Airline Flight Fatality Rate Average Company Restaurant Bills Doctor Prescription Writing (6,210 ppm) (3.4 ppm) (66,800 ppm) Defects per Million Opportunities 100K 1 SIGMA (with ±1.5 Sigma Shift)
- 8. 8 Six Sigma: ABenchmark or Goal „ The specific value of 6 Sigma (as opposed to 4 or 5 Sigma) is a benchmark for process excellence. „ Adopted by leading organizations as a goal for process capability. „ Delivering nearly defect-free products and services „ Focus on variation reduction
- 9. 9 Six Sigma: AMethod „ A well defined process and toolkit used for: { Product/Service Design { Product & Process Improvement
- 10. 10 DMAIC Approach 0 5 10 15 20 25 30 35 40 - 1 0 - 8 - 6 - 4 - 2 0 2 4 6 8 1 0 1 2 1 4 1 6 1 8 2 0 2 2 2 4 2 6 2 8 3 0 3 2 3 4 3 6 3 8 4 0 Chronic Waste ChronicWaste Sporadic Spike (Special Cause) Define Measure/Analyze Control Improve Defect Rate Time Common Cause Variation
- 11. 11 DMAIC Approach Select customer-focusedproblem, document business impact, determine project deliverables, complete project charter, form multidisciplinary team Define Develop factual understanding of current process, locate current problem sources, establish “as-is” process baseline, measure baseline process capability Measure Identify potential defect root causes and sources of variation, investigate using experiments and statistics, verify root causes Analyze Use design of experiments to develop solutions. Eliminate the verified root cause(s), or reduce sources of variation, demonstrate with data Improve Implement methods to hold the gains such as SOP’s and statistical process controls (SPC). Control
- 12. 12 Six Sigma DMAICTools Define Measure Analyze Improve Control • Project Scope • Project Charter • Business Impact • Voice of the Customer (VOC) • Affinity Diagram • Kano Model • CTQ Tree diagram • Process Map • Data Collection • Control Charts • Pareto Charts • Prioritization Matrix • Measurement System Analysis • Process Capability • Yields (RTY) • Multivari Analysis • Cause & Effect Matrix • FMEA • Hypothesis testing • ANOVA • Noise Variables • Scatter plots • Design of Experiments • Brainstorming & Creativity tools • Design of Experiments (DOE) • Full Factorial • Fractional Factorial • Response Surface • Pilot Trials • Implementation Plan • Statistical Process Control (SPC) • Standard Operating procedures (SOP) • Data Collection & sampling plans • Control Plans • Measurement Systems Analysis (recheck) • Project summary & lessons learned
- 13. 13 All Work isa Process Requirements Requirements Supplier Process Value-added tasks Customer Inputs Output Feedback Feedback S. I. P. O. C.
- 14. 14 What is aprocess? Controllable Inputs (X’s) Key Process Outputs (Y’s) Noise Inputs Process Y = f (X)
- 15. 15 Visualizing Process Capability 4 3 2 1 0 -1 -2 -3 -4 0.4 0.3 0.2 0.1 0.0 Lower Spec. Limit Upper Spec. Limit Cust.Tolerance Cp=1 Process Capability
- 16. 16 Visualizing Process Capability 8 6 4 2 0 -2 - 4 - 6 - 8 0 .4 0 .3 0 .2 0 .1 0 .0 Lower Spec Limit Upper Spec. Limit Cust. Tolerance Cp=2
- 17. 17 Visualizing Process Capability 8 6 4 2 0 -2 -4 -6 -8 0.4 0.3 0.2 0.1 0.0 Lower Spec Limit Upper Spec. Limit Cust.Tolerance Process Capability Change the process to fit in the original specification window
- 18. 18 Process Drift Cp =1.33 Cpk = 1.33 1.33 5.33 4.0 2.67 1.33 -1.33 -2.67 -4.0 -5.33 0 0.4 0.3 0.2 0.1 0.0 Lower Spec. Limit Upper Spec. Limit Cust. Tolerance Process is Centered Between the Specification Limits
- 19. 19 Process Drift Cp =1.33 Cpk = 0.83 0.83 0 0.4 0.3 0.2 0.1 0.0 5.33 4.0 2.67 1.33 -1.33 -2.67 -4.0 -5.33 Lower Spec. Limit Upper Spec. Limit Cust. Tolerance Process has Drifted Between the Specification Limits
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- 21. 21 Unstable Process Thur LSL USL UnstableProcess • Mean shifts present • Excess variation (σ changes) • Special causes of variation are present, • Process output is not stable over time and is not predictable Fri Time Wed Tue Mon
- 22. 22 Stable process: • Variationreduced (lower σ) • Process is centered in spec window • Mean shifts reduced • Only common cause variation is present • Process output is stable/predictable • The process is termed “in statistical control.” Time LSL USL Stable Process
- 23. 23 History of SixSigma „ Originated at Motorola in the early 80’s „ Doesn’t use “Quality” in the name „ Uses a modification of the Deming Plan-Do- Check-Act (PDCA) cycle „ Adopted widely in the 90’s by major corporations including AlliedSignal (now Honeywell), GE, Kodak, and a growing list of small, medium, and large companies.
- 24. 24 Training for SixSigma „ Executives { 8 hour Six Sigma overview and implementation roadmap development. „ Champion { 30 hour course, overview of DMAIC, Tools overview { Focus on developing project selection skills „ Black Belt { 160 hours of classroom, total of four months to train { Required to have a project „ Green Belt { 30-80 hours depending on training philosophy { May or may not have to complete a project
- 25. 25 Identifying Six SigmaProjects Basic Project Criteria • Problem in key business activity • Large financial impact • Can measure and quantify performance yes Easy to Fix? Quick Hit no Solution Available? yes Other Initiative • Process focus • Analyze Y = f(x) • Reduce variation & defects • Complex relationships no Six Sigma Project
- 26. 26 Project Focus „ Projectsare chartered by Champions and business leaders „ Led by Black Belts „ Assisted by Green Belts „ Each experienced Black Belt can typically handle between 4-6 projects per year „ Typical financial impact is approximately $175,000 per project „ Experienced Black Belt can generate about $1M in savings per year
- 27. 27 Why adopt SixSigma? „ Concept has been around for 16 years, proven track record at big companies. „ Has shown the most endurance and return on investment of any improvement initiative. „ Starting to be implemented in small and medium- sized corporations. „ Provides a comprehensive set of philosophies, tools, methods, and fundamental concepts leading to quantifiable business results. „ Involves the entire organization; from CEO, CFO, Champions, Black Belts, Green Belts, and workers.
- 28. 28 What are theChallenges? „ Takes careful preparation and a commitment to fundamental change efforts required. „ Training – key for all levels in the organization „ It is not a quick fix nor a “one-size-fits-all” approach. „ Statistical analysis is not generally part of the engineering discipline in most companies. „ Tendency to work on too many projects at once. Resource limitations are real! „ Need to manage expectations on payback time, typically takes 9-12 months from roll-out to start seeing quantifiable financial gains.
- 29. 29 What are theRewards „ Increased value to the customers and shareholders. „ Improved reliability and predictability of products and services. „ Significant reduction in defects. „ Institutionalization of a “process” mindset. „ Increased competitive advantage.
- 30. 30 Some Results… „ Motorola– 10 years; $11 Billion Savings „ AlliedSignal - $1.5 Billion estimated savings „ General Electric – started efforts in 1995 { 1998: $1.2 Billion less $450 Million in costs… net benefits = $750 Million { 1999 Annual Report: more than $2 Billion net benefits { 2001: 6,000 projects completed; $3 Billion in savings
- 31. 31 Six Sigma Summary „Disciplined & Systematic Approach { Process orientation, drive for variation reduction { Focus on quantitative methods and tools { Focus on control to hold the gains { Uses a new metric for defects (sigma, DPMO, ppm) „ Results oriented management leadership, using data-driven decision making „ Significant training & organizational learning
- 32. 32 Six Sigma Summary „Success happens “one project at a time” „ Good project selection leads to large financial impact „ Implementation is hard work, not magic. Expect bumps in the road, stay the course, results will happen „ Six Sigma is “A journey not a destination”
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