Chapter 10

1. Chapter 10 Principles of Six Sigma

2. Key IdeaIntroduction Although we view quality improvement tools and techniques from the perspective of Six Sigma, it is important to understand that they are simply a collection of methods that have been used successfully in all types of quality management and improvement initiatives, from generic TQM efforts, to ISO 9000, and in Baldrige processes.

3. Six Sigma • A simple quality metric • An overall strategy to quality improvement

4. Six-Sigma Metrics • Defect– any mistake or error that is passed on to a customer • Defects per unit (DPU) = number of defects discovered  number of units produced • Defects per million opportunities (dpmo) = DPU  1,000,000  opportunities for error

5. Six-Sigma Quality • Ensuring that process variation is half the design tolerance (Cp = 2.0) while allowing the mean to shift as much as 1.5 standard deviations, resulting in at most 3.4 dpmo.

6. k-Sigma Quality Levels

7. Six Sigma(Chapter 3) • Based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities • Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric

8. Key Idea(Chapter 3) Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.

9. Key Concepts of Six Sigma (1 of 2) (Chapter 3) • Think in terms of key business processes, customer requirements, and overall strategic objectives. • Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources. • Emphasize such quantifiable measures as defects per million opportunities (dpmo)that can be applied to all parts of an organization

10. Key Concepts of Six Sigma (2 of 2) (Chapter 3) • Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability. • Provide extensive training followed by project team deployment • Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams. • Set stretch objectives for improvement.

11. Key Idea Although originally developed for manufacturing in the context of tolerance-based specifications, the Six Sigma concept has been operationalized to any process and has come to signify a generic quality level of at most 3.4 defects per million opportunities.

12. Projects as Value-Creation Processes • Projects - temporary work structures that start up, produce products or services, and then shut down. • Project management – all activities associated with planning, scheduling, and controlling projects

13. Six Sigma Project Teams • Champions – senior managers who promote Six Sigma • Master Black Belts – highly trained experts responsible for strategy, training, mentoring, deployment, and results. • Black Belts – Experts who perform technical analyses • Green Belts – functional employees trained in introductory Six Sigma tools • Team Members – Employees who support specific projects

14. Key IdeaProject Management Successful project managers have four key skills: a bias toward task completion, technical and administrative credibility, interpersonal and political sensitivity, and leadership ability.

15. Project Life Cycle Management (1 of 2) • Project Quality Initiation: Define directions, priorities, limitations, and constraints. • Project Quality Planning: Create a blueprint for the scope of the project and resources needed to accomplish it. • Project Quality Assurance: Use appropriate, qualified processes to meet technical project design specifications.

16. Project Life Cycle Management (2 of 2) • Project Quality Control: Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked. • Project Quality Closure: Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers.

17. The Definition of a “Project” Performance Required performance Target Cost Cumulative Budget limit Due Date Time (“schedule”)

18. Problem Solving • Problem: any deviation between what “should be” and what “is” that is important enough to need correcting • Problem Solving: the activity associated with changing the state of what “is” to what “should be”

19. Quality Problem Types • Conformance problems • Unstructured performance problems • Efficiency problems • Product design problems • Process design problems

20. Project Selection • One of the more difficult challenges in Six Sigma is the selection of the most appropriate problem to attack. • Two ways to generate projects: • Top-down • Bottom-up

21. Key Factors in Six Sigma Project Selection • Financial return, as measured by costs associated with quality and process performance, and impacts on revenues and market share • Impacts on customers and organizational effectiveness • Probability of success • Impact on employees • Fit to strategy and competitive advantage

22. Problem Solving Process • Redefining and analyzing the problem • Generating ideas • Evaluating and selecting ideas • Implementing ideas

23. Key IdeaProblem Solving A structured problem-solving process provides all employees with a common language and a set of tools to communicate with each other, particularly as members of cross-functional teams.

24. DMAIC Methodology • Define • Measure • Analyze • Improve • Control DMAIC

25. Define • Describe the problem in operational terms • Drill down to a specific problem statement (project scoping) • Identify customers and CTQs, performance metrics, and cost/revenue implications

26. Measure • Key data collection questions • What questions are we trying to answer? • What type of data will we need to answer the question? • Where can we find the data? • Who can provide the data? • How can we collect the data with minimum effort and with minimum chance of error?

27. Analyze • Focus on why defects, errors, or excessive variation occur • Seek the root cause • 5-Why technique • Experimentation and verification

28. Improve • Idea generation • Brainstorming • Evaluation and selection • Implementation planning

29. Control • Maintain improvements • Standard operating procedures • Training • Checklist or reviews • Statistical process control charts

30. Tools for Six-Sigma and Quality Improvement • Elementary statistics • Advanced statistics • Product design and reliability • Measurement • Process control • Process improvement • Implementation and teamwork

31. Design for Six Sigma • Focus on optimizing product and process performance • Features • A high-level architectural view of the design • Use of CTQs with well-defined technical requirements • Application of statistical modeling and simulation approaches • Predicting defects, avoiding defects, and performance prediction using analysis methods • Examining the full range of product performance using variation analysis of subsystems and components

32. Six Sigma in Services and Small Organizations • Six Sigma is equally applicable to services. However, services have some unique characteristics.

33. Key IdeaSix Sigma in Services All Six Sigma projects have three key characteristics: a problem to be solved, a process in which the problem exists, and one or more measures that quantify the gap to be closed and can be used to monitor progress.

34. Key Six Sigma Metrics in Services • Accuracy • Cycle time • Cost • Customer satisfaction

35. Lean Production and Six Sigma • The 5S’s: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). • Visual controls • Efficient layout and standardized work • Pull production • Single minute exchange of dies (SMED) • Total productive maintenance • Source inspection • Continuous improvement

36. Traditional Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance 100% “optimal level” of quality

37. Modern Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance 100%