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Introduction to SIX - SIGMA. Presented by : http://www.QualityGurus.com. Agenda. Participants Introduction. Your Name Department Your job profile Your exposure to Quality Management/ Six Sigma. Ground Rules. Program success depends on your participation. Actively participate.

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introduction to six sigma

Introduction toSIX - SIGMA

Presented by : http://www.QualityGurus.com

participants introduction
Participants Introduction
  • Your Name
  • Department
  • Your job profile
  • Your exposure to Quality Management/ Six Sigma
ground rules
Ground Rules
  • Program success depends on your participation. Actively participate.
  • Please avoid cross-talks.
  • Observe specified timings.
  • Please keep your mobile phones switched off.
  • Feel free to ask question at any point of time.

- Restrict question to specific issue being discussed, while general

questions can be discussed during Q & A session.

  • Enjoy the program !
introduction to six sigma1
Introduction to Six Sigma

Purpose of six sigma :

To make customer happier and increase profits

origin of six sigma
Origin of Six Sigma
  • 1987 Motorola Develops Six Sigma
    • Raised Quality Standards
  • Other Companies Adopt Six Sigma
    • GE
      • Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training.
    • Dow Chemical, DuPont, Honeywell, Whirlpool
time line
Time Line

Allied Signal

Johnson & Johnson,

Ford, Nissan,

Honeywell

Motorola

General Electric

1985

1987

1992

1995

2002

Dr Mikel J Harry wrote a

Paper relating early failures to quality

pilot s six sigma performance

Width of landing strip

1/2 Width

of landing

strip

If pilot always lands

within 1/2 the landing strip width, we say that he has Six-sigma capability.

Pilot’s Six-Sigma Performance
current leadership challenges
Current Leadership Challenges
  • Delighting Customers.
  • Reducing Cycle Times.
  • Keeping up with Technology Advances.
  • Retaining People.
  • Reducing Costs.
  • Responding More Quickly.
  • Structuring for Flexibility.
  • Growing Overseas Markets.
six sigma benefits
Six Sigma— Benefits?
  • Generated sustained success
  • Project selection tied to organizational strategy
    • Customer focused
    • Profits
  • Project outcomes / benefits tied to financial reporting system.
  • Full-time Black Belts in a rigorous, project-oriented method.
  • Recognition and reward system established to provide motivation.
management involvement
Management involvement?
  • Executives and upper management drive the effort through:
    • Understanding Six Sigma
    • Significant financial commitments
    • Actively selecting projects tied to strategy
    • Setting up formal review process
    • Selecting Champions
    • Determining strategic measures
management involvement1
Management Involvement?
  • Key issues for Leadership:
    • How will leadership organize to support Six Sigma ? (6  council, Director 6 , etc)
    • Transition rate to achieve 6 .
    • Level of resource commitment.
    • Centralized or decentralized approach.
    • Integration with current initiatives e.g. QMS
    • How will the progress be monitored?
what can it do
What can it do?

Motorola:

  • 5-Fold growth in Sales
  • Profits climbing by 20% pa
  • Cumulative savings of $14 billion over 11 years

General Electric:

  • $2 billion savings in just 3 years
  • The no.1 company in the USA

Bechtel Corporation:

  • $200 million savings with investment of $30 million
ge six sigma economics

(in millions)

2500

2000

1500

Cost

1000

Benefit

500

0

1996

1996

1998

2000

2002

GE Six Sigma Economics

6 Sigma Project Progress

Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma.

overview of six sigma

CHANGE

THE WORLD

6 SIGMA AS A

PHILOSOPHY

TRANSFORM THE

ORGANIZATION

6 SIGMA AS

A PROCESS

GROWTH

COSTS OUT

6 SIGMA AS A

STATISTICAL TOOL

PAIN, URGENCY, SURVIVAL

Overview of Six Sigma
overview of six sigma1
Overview of Six Sigma

It is a Process

  • To achieve this level of performance you need to:

Define, Measure, Analyse, Improve and Control

It is a Philosophy

  • Anything less than ideal is an opportunity for improvement
  • Defects costs money
  • Understanding processes and improving them is the most efficient way to achieve lasting results

It is Statistics

  • 6 Sigma processes will produce less than 3.4 defects per million opportunities
philosophy
Philosophy
  • Know What’s Important to the Customer (CTQ)
  • Reduce Defects (DPMO)
  • Center Around Target (Mean)
  • Reduce Variation (Standard Deviation)
critical elements
Critical Elements
  • Genuine Focus on the Customer
  • Data and Fact Driven Management
  • Process Focus
  • Proactive management
  • Boundary-less Collaboration
  • Drive for Perfection; Tolerance for failure
data driven decision
Data Driven Decision

f(X)

Y=

  • Y
  • Dependent
  • Output
  • Effect
  • Symptom
  • Monitor
  • X1 . . . Xn
  • Independent
  • Input-Process
  • Cause
  • Problem
  • Control

The focus of Six sigma is to identify and control Xs

two processes
Two Processes

DMAIC

DMADV

  • Existing Processes
  • New Processes
  • DFSS
  • Define
  • Measure
  • Analyze
  • Improve
  • Control
  • Define
  • Measure
  • Analyze
  • Design
  • Verify
copq cost of poor quality
COPQ (Cost of Poor Quality)

- Inspection

- Warranty

- Scrap

- Rework

- Rejects

  • Traditional Quality Costs:
  • Tangible
  • Easy to Measure

- More Setups

- Expediting Costs

- Lost Sales

- Late Delivery

- Lost Customer Loyalty

- Excess Inventory

- Long Cycle Times

- Costly Engineering Changes

  • Hidden Costs:
  • Intangible
  • Difficult to Measure

- Lost Opportunities

- The Hidden Factory

Average COPQ approximately 15% of Sales

copq v s sigma level
COPQ v/s Sigma Level

Cost of Quality % Sales

Sigma Level

ctq critical to quality
CTQ (Critical-To-Quality)
  • CTQ characteristics for the process, service or process
  • Measure of “What is important to Customer”
  • 6 Sigma projects are designed to improve CTQ
  • Examples:
    • Waiting time in clinic
    • Spelling mistakes in letter
    • % of valves leaking in operation
defective and defect
Defective and Defect
  • A nonconforming unit is a defective unit
  • Defect is nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction.
  • A defect does not necessarily make the unit defective
  • Examples:
    • Scratch on water bottle
    • (However if customer wants a scratch free bottle, then this will be defective bottle)
defect opportunity
Defect Opportunity
  • Circumstances in which CTQ can fail to meet.
  • Number of defect opportunities relate to complexity of unit.
  • Complex units – Greater opportunities of defect than simple units
  • Examples:
    • A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15
dpo defect per opportunity
DPO (Defect Per Opportunity)
  • Number of defects divided by number of defect opportunities
  • Examples:
    • In previous case (15 defect opportunities), if 10 units have 2 defects.
    • Defects per unit = 2 / 10 = 0.2
    • DPO = 2 / (15 x 10) = 0.0133333
dpmo defect per million opportunities
DPMO (Defect Per Million Opportunities)
  • DPO multiplies by one million
  • Examples:
    • In previous case (15 defect opportunities), if 10 units have 2 defects.
    • Defects per unit = 2 / 10 = 0.2
    • DPO = 2 / (15 x 10) = 0.0133333
    • DPMO = 0.013333333 x 1,000,000 = 13,333

Six Sigma performance is 3.4 DPMO

13,333 DPMO is 3.7 Sigma

yield
Yield
  • Proportion of units within specification divided by the total number of units.
  • Examples:
    • If 10 units have 2 defectives
    • Yield = (10 – 2) x 100 /10 = 80 %
  • Rolled Through Yield (RTY)
    • Y1 x Y2 x Y3 x ……. x Yn
    • E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54
what are the forms of waste
What are the forms of waste?
  • Waste of Correction
  • Waste of Overproduction
  • Waste of processing
  • Waste of conveyance (or transport)
  • Waste of inventory
  • Waste of motion
  • Waste of waiting
1 waste of correction
1. Waste of correction
  • Repairing a defect wastes time and resources (Hidden factory)

Hidden

Factory

Rework

Rework

Failure

Investigation

Failure

Investigation

Product

Operation

1

Test

Operation

2

Test

2 waste of overproduction
2. Waste of Overproduction
  • Producing more than necessary or producing at faster rate than required
    • Excess labor, space, money, handling
3 waste of processing
3. Waste of processing
  • Processing that does not provide value to the product
    • Excess level of approvals
    • Tying memos that could be handwritten
    • Cosmetic painting on internals of equipment
    • Paint thickness more than specific values
4 waste of conveyance
4. Waste of conveyance
  • Unnecessary movement of material from one place to other to be minimized because -
    • It adds to process time
    • Goods might get damaged
  • Convey material and information ONLY when and where it is needed.
5 waste of inventory
5. Waste of inventory
  • Any excess inventory is drain on an organization.
    • Impact on cash flow
    • Increased overheads
    • Covers Quality and process issues
  • Examples
    • Spares, brochures, stationary, …
6 waste of motion
6. Waste of Motion
  • Any movement of people, equipment, information that does not contribute value to product or service
7 waste of waiting
7. Waste of Waiting
  • Idle time between operations
  • Period of inactivity in a downstream process because an upstream activity does not deliver on time.
  • Downstream resources are then often used in activities that do not add value, or worst result in overproduction.
some more sources of waste
Some more sources of Waste
  • Waste of untapped human potential.
  • Waste of inappropriate systems
  • Wasted energy and water
  • Wasted materials
  • Waste of customer time
  • Waste of defecting customers
have you ever
Have you ever…
  • Shot a rifle?
  • Played darts?

What is the point of these sports?

What makes them hard?

have you ever1

Jack

Jill

Have you ever…
  • Shot a rifle?
  • Played darts?

Who is the better shooter?

variability

8

7

10

8

9

Jack

Jill

Variability
  • Deviation = distance between observations and the mean (or average)
variability1

Jack

7

6

7

7

6

Jill

Variability
  • Deviation = distance between observations and the mean (or average)
variability2

8

7

10

8

9

Jack

Jill

Variability
  • Variance = average distance between observations and the mean squared

Variance

variability3

Jack

7

6

7

7

6

Jill

Variability
  • Variance = average distance between observations and the mean squared

Variance

variability4

?

But what good is a standard deviation

Variability
  • Standard deviation = square root of variance

Jack

Jill

variability5

Even very rare

outcomes are

possible

Even very rare

outcomes are

possible

Fewer

in the

“tails”

(upper)

Fewer

in the

“tails”

(lower)

Most outcomes

occur in the

middle

Variability

The world tends to be bell-shaped

variability6
Variability

Here is why:

Even outcomes that are equally likely (like dice), when you add them up, become bell shaped

slide50

“Normal” bell shaped curve

Normal distributions are divide up

into 3 standard deviations on

each side of the mean

Once your that, you

know a lot about

what is going on

?

And that is what a standard deviation

is good for

causes of variability
Causes of Variability
  • Common Causes:
    • Random variation within predictable range (usual)
    • No pattern
    • Inherent in process
    • Adjusting the process increases its variation
  • Special Causes
    • Non-random variation (unusual)
    • May exhibit a pattern
    • Assignable, explainable, controllable
    • Adjusting the process decreases its variation
limits
Limits
  • Process and Control limits:
    • Statistical
    • Process limits are used for individual items
    • Control limits are used with averages
    • Limits = μ ± 3σ
    • Define usual (common causes) & unusual (special causes)
  • Specification limits:
    • Engineered
    • Limits = target ± tolerance
    • Define acceptable & unacceptable
usual v s unusual acceptable v s defective
Usual v/s Unusual, Acceptable v/s Defective

Another View

Off-Target

Large Variation

LSL

USL

LSL

USL

On-Target

Center

Process

Reduce

Spread

LSL = Lower spec limit

USL = Upper spec limit

LSL

USL

The statistical view of a problem

more about limits
More about limits

Poor quality: defects are common (Cpk<1)

Good quality: defects are rare (Cpk>1)

μ

target

μ

target

Cpkmeasures “Process Capability”

If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.

process capability

14 20 26

15 24

Process capability

Good quality: defects are rare (Cpk>1)

Poor quality: defects are common (Cpk<1)

=

USL – x

24 – 20

3(2)

=

.667

=

Cpk = min

=

x - LSL

20 – 15

3(2)

=

.833

=

=

=

3σ = (UPL – x, or x – LPL)

slide56

USL

LSL

1

1

1

1

1

1

-6

+6

6

1

2

3

4

5

6

7

8

9

10

11

12

A Six Sigma Process –Predictably twice as good as what the customer wants

3 s v s 6 s
3 s v/s 6 s

6 Sigma curve

LSL

USL

3 Sigma curve

1

3

4

5

6

8

9

10

11

12

13

14

15

16

2

7

process shift allowed
Process shift allowed

1.5 SD

1.5 SD

LSL

USL

SD = 1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

six sigma measurement

Sigma

7

6

5

4

0.02

DPMO

3

3.4

233

6210

66810

Six Sigma Measurement

On one condition :

Calculate the defects and estimate the opportunities in the same way...

six sigma measurement1

Sigma Defects

numbers per million

1.5s 500,000

2.0s 308,300

2.5s 158,650

3.0s 67,000

3.5s 22,700

4.0s 6,220

4.5s 1,350

5.0s 233

5.5s 32

6.0s 3.4

Six Sigma Measurement
components
Components

Two components of Six Sigma1. Process Power2. People Power

p d c a
P-D-C-A

Plan

Act

A

P

Plan the change

Act on what was learned

C

D

Check

Do

Check the results

Implement the change on a small scale.

approach
Approach

Practical

Problem

Statistical

Problem

Statistical

Solution

Practical

Solution

dmaic simplified
DMAIC - simplified
  • Define
    • What is important?
  • Measure
    • How are we doing?
  • Analyze
    • What is wrong?
  • Improve
    • Fix what’s wrong
  • Control
    • Ensure gains are maintained to guarantee performance
dmaic approach
DMAIC approach

D

Define

Identify and state the practical problem

M

Measure

Validate the practical problem by collecting data

A

Analyze

Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution

I

Improve

Confirm and test the statistical solution

C

Control

Convert the statistical solution to a practical solution

define
Define

D

Define

VoC - Who wants the project and why ?

M

Measure

The scope of project / improvement (SMART Objective)

A

Analyze

Key team members / resources for the project

I

Improve

Critical milestones and stakeholder review

C

Control

Budget allocation

measure
Measure

D

Define

Ensure measurement system reliability

- Is tool used to measure the output variable flawed ?

M

Measure

A

Analyze

Prepare data collection plan

  • - How many data points do you need to collect ?
  • How many days do you need to collect data for ?
  • What is the sampling strategy ?
  • Who will collect data and how will data get stored ?
  • What could the potential drivers of variation be ?

I

Improve

C

Control

Collect data

analyze
Analyze

D

Define

M

Measure

How well or poorly processes are working compared with

- Best possible (Benchmarking)

- Competitor’s

Shows you maximum possible result

Don’t focus on symptoms, find the root cause

A

Analyze

I

Improve

C

Control

improve
Improve

D

Define

  • Present recommendations to process owner.
  • Pilot run
  • Formulate Pilot run.
  • Test improved process (run pilot).
  • Analyze pilot and results.
  • Develop implementation plan.
  • Prepare final presentation.
  • Present final recommendation to Management Team.

M

Measure

A

Analyze

I

Improve

C

Control

control
Control

D

Define

Don’t be too hasty to declare victory.

M

Measure

A

Analyze

How will you maintain to gains made?

I

Improve

  • - Change policy & procedures
  • - Change drawings
  • Change planning
  • Revise budget
  • Training

C

Control

tools for dmaic
Tools for DMAIC

Improve

How to get

to six sigma

Measure

Data & Process

capability

Analyze

When and where

are the defects

Control

Display

key measures

Define

What is wrong?

components1
Components

Two components of Six Sigma1. Process Power2. People Power

Tell me, I forget. Show me , I remember. Involve me, I understand.

6 s training
6 s Training

Mentor, trainer, and coach of Black Belts and others

in the organization.

Master

Black Belt

Leader of teams implementing the six sigma

methodology on projects.

Black Belts

Champions

Delivers successful focused projects using

the six sigma methodology and tools.

Green Belts

Participates on and supports the project teams, typically in the context of his or her existing responsibilities.

Team Members /

Yellow Belts

6 s training1
6 s Training

Position in Six Sigma Organisation

Typical Training

Expected Role Post Training

Executive overview

2/3 Days

Senior

Executives

Champions /

Process owners

Black-Belt

Green Belt

Employees

(Yellow-Belt)

Provide Leadership

Champions Training –II

3 days

Champions Training - I

2 days

+

Process Mgmt. & Project

champion

(Total 5 days)

Training /

Facilitation skills

Master Black-Belt

-As Trainer

-Coach teams

-Facilitateimprovement projects

Week

1

Week

2

Week

3

Week

4

Project-work

Black-Belt

  • Part of project teams
  • Sometime lead the teams

Project work

1 Week Green-Belt Training

  • General process control & improvement
  • Project Team Member

1 / 2 Days core training on

Six-Sigma

champion
Champion
  • Plans improvement projects
  • Charters or champions chartering process
  • Identifies, sponsors and directs Six Sigma projects
  • Holds regular project reviews in accordance with project charters
  • Includes Six Sigma requirements in expense and capital budgets
champion1
Champion
  • Identifies and removes organizational and cultural barriers to Six Sigma success.
  • Rewards and recognizes team and individual accomplishments (formally and informally)
  • Communicates leadership vision
  • Monitors and reports Six Sigma progress
  • Validates Six Sigma project results
  • Nominates highly qualified Black Belt and/or Green Belt candidates
financial analyst
Financial Analyst
  • Validates the baseline status for each project.
  • Validates the sustained results / savings after completion of the project.
  • Compiles overall investment vs. benefits on Six Sigma for management reporting.
  • Will usually be the part of Senior Leadership Team.
thought of the day
Thought of the day
  • We don't know what we don't know
  • We can't act on what we don't know
  • We won't know until we search
  • We won't search for what we don't question
  • We don't question what we don't measure
  • Hence, We just don't know
slide87
Project Selection

The first step to implement Six Sigma

sources of projects
Sources of Projects
  • External Sources:
    • Voice of Customer
      • What are we falling short of meeting customer needs?
      • What are the new needs of customers?
    • Voice of Market
      • What are market trends, and are we ready to adapt?
    • Voice of Competitors
      • What are we behind our competitors?
sources of projects1
Sources of Projects
  • Internal Sources:
    • Voice of Process
      • Where are the defects, repairs, reworks?
      • What are the major delays?
      • What are the major wastes?
    • Voice of Employee
      • What concerns or ideas have employees or managers raised?
      • What are we behind our competitors?
project selection
Project Selection
  • As a team List down at least 20 improvement projects related to your work areas …….

A Problem Statement should be SMART:

  • Specific - It does not solve world hunger
  • Measurable - It has a way to measure success
  • Achievable - It is possible to be successful
  • Relevant - It has an impact that can be quantified
  • Timely - It is near term not off in the future
harvesting the fruit of six sigma
Harvesting the Fruit of Six Sigma

Sweet Fruit

Design for Repeatability

Process Enhancement

Bulk of Fruit

Process Characterization

and Optimization

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Low Hanging Fruit

Seven Basic Tools

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Ground Fruit

Logic and Intuition

types of savings
Types of Savings
  • Hard Savings:
    • Cost Reduction
      • Energy Saving
      • Raw Material saving
      • Reduced Rejection, Waste, Repair
    • Revenue Enhancement
      • Increased production
      • Yield Improvement
      • Quality Improvement
slide93

Types of Savings

  • Hard Savings:
    • Cash flow improvement
      • Reduced cash tied up in inventory
      • Reduced late receivables, early payables
      • Reduced cycle time
    • Cost and Capital avoidance
      • Optimizing the current system / resources
      • Reduced maintenance costs
slide94

Types of Savings

  • Soft Savings:
    • Customer Satisfaction / Loyalty
    • Employee Satisfaction
cost of implementing
Cost of implementing
  • Direct Payroll
    • Full time (Black Belts, Master Black Belts)
  • Indirect Payroll
    • Time by executives, team members, data collection
  • Training and Consulting
    • Black Belt course, Overview for Mgmt etc.
  • Improvement Implementation Costs
    • Installing new solution, IT driven solutions etc.
what qualifies as a six sigma project
What Qualifies as a Six Sigma Project
  • Three basic qualifications:
    • -There is a gap between current and desired / needed performance.
    • The cause of problem is not clearly understood.
    • The solution is not pre-determined, nor is the optimal solution apparent.

How many projects out of 20 now

qualify as Six sigma projects?

way forward
Way forward
  • Get Started
  • Look for low hanging fruits
  • Even poor usage of these tools will get results
  • Learn more about Six Sigma