Description
The PPT explains on Six Sigma Concepts.
Introduction To Six Sigma
To make customer happier and increase profits
Purpose 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
Allied Signal
Motorola
General Electric
Johnson & Johnson, Ford, Nissan, Honeywell
1985
1987
1992
1995
2002
Dr Mikel J Harry wrote a Paper relating early failures to quality
• • • • • • • •
Delighting Customers. Reducing Cycle Times. Keeping up with Technology Advances. Retaining People. Reducing Costs. Responding More Quickly. Structuring for Flexibility. Growing Overseas Markets.
Current Leadership Challenges
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?
• 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 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?
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 500 0 1996 1998 2000 2002
Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma.
6 Sigma Project Progress
Benefit
Overview of Six Sigma
6 SIGMA AS A PHILOSOPHY CHANGE THE WORLD TRANSFORM THE ORGANIZATION 6 SIGMA AS A PROCESS GROWTH
COSTS OUT
6 SIGMA AS A STATISTICAL TOOL PAIN, URGENCY, SURVIVAL
Overview of Six Sigma
It is a Philosophy – Anything less than ideal is an opportunity for improvement – Defects costs money – Understanding processes and improving them is the It is Statistics most efficient way to achieve lasting results – 6 Sigma processes will produce less than 3.4 defects per million opportunities It is a Process – To achieve this level of performance you need to: Define, Measure, Analyse, Improve and Control
Philosophy
• Know What’s Important to the Customer (CTQ) • Reduce Defects (DPMO) • Center Around Target (Mean) • Reduce Variation (Standard Deviation)
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
Y=
• • • • • • Y Dependent Output Effect Symptom Monitor
f(X)
• • • • • • X1 . . . Xn Independent Input-Process Cause Problem Control
The focus of Six sigma is to identify and control Xs
Two Processes
DMAIC
• Existing Processes
DMADV
• New Processes • DFSS • • • • • Define Measure Analyze Design Verify
• • • • •
Define Measure Analyze Improve Control
Key Concepts
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
Lost Opportunities
Hidden Costs: - Intangible - Difficult to Measure
The Hidden Factory
Average COPQ approximately 15% of Sales
COPQ v/s Sigma Level
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2 3 4 5 6
Cost of Quality % Sales
Sigma Level
CTQ (Critical-ToQuality)
• 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
• 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
• 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
• 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
DPO (Defect Per Opportunity)
• DPO multiplies by one million • Examples:
DPMO (Defect Per Million Opportunities)
– 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
• 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
Forms of Waste
1. 2. 3. 4. 5. 6. 7.
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
• Repairing a defect wastes time and resources (Hidden factory) Hidden
Rework Failure Investigation Operation 1 Test Operation 2
Factory Rework
Failure Investigation Test
Product
• Producing more than necessary or producing at faster rate than required
– Excess labor, space, money, handling
2. Waste of Overproduction
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
• 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
• 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
• Any movement of people, equipment, information that does not contribute value to product or service
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
Waste of untapped human potential. Waste of inappropriate systems Wasted energy and water Wasted materials Waste of customer time Waste of defecting customers
What is Sigma?
Have you ever…
• Shot a rifle? • Played darts?
What is the point of these sports? What makes them hard?
Have you ever…
• Shot a rifle? • Played darts?
Jack
Jill
Who is the better shooter?
Variability
• Deviation = distance between observations and the mean (or average)
Observations Deviations
8 7 10 8 9
Jack
10
9 8 8 7 averages 8.4
10 - 8.4 = 1.6
9 - 8.4 = 0.6 8 - 8.4 = -0.4 8 - 8.4 = -0.4 7 - 8.4 = -1.4 0.0
Jill
Variability
• Deviation = distance between observations and the mean (or average)
Observations
Deviations
Jack
7
7 7 6 6 averages 6.6
7 - 6.6 = 0.4
7 - 6.6 = 0.4 7 - 6.6 = 0.4 6 - 6.6 = -0.6 6 - 6.6 = -0.6 0.0
7 6 7 7 6
Jill
Variability
• Variance = average distance between observations and the mean squared
Observations Deviations Squared Deviations 2.56 0.36 0.16 0.16 1.96 1.0
8 7 10 8 9
Jack
10
9 8 8 7 averages 8.4
10 - 8.4 = 1.6
9 – 8.4 = 0.6 8 – 8.4 = -0.4 8 – 8.4 = -0.4 7 – 8.4 = -1.4 0.0
Jill
Variance
Variability
• Variance = average distance between observations and the mean squared
Observations Deviations Squared Deviations 0.16 0.16 0.16
Jack
7
7 7 6 6 averages 6.6
7 - 6.6 = 0.4
7 - 6.6 = 0.4 7 - 6.6 = 0.4 6 – 6.6 = -0.6 6 – 6.6 = -0.6 0.0
0.36
0.36 0.24
7 6 7 7 6
Jill
Variance
Variability
• Standard deviation = square root of variance
Average Jack Jill 8.4 6.6 Variance 1.0 0.24 Standard Deviation 1.0 0.4898979
Jill Jack
But what good is a standard deviation
Variability
The world tends to be bell-shaped
Even very rare outcomes are possible
Fewer in the “tails” (lower)
Most outcomes occur in the middle
Fewer Even very rare in the outcomes are “tails” possible (upper)
Variability
Here is why:
Even outcomes that are equally likely (like dice), when you add them up, become bell shaped
Add up the dots on the dice
0.2
Probability
0.15 0.1 0.05 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Sum of dots
1 die 2 dice 3 dice
“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
• 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
• Process and Control limits: – Statistical – Process limits are used for individual items – Control limits are used with averages – Limits = ? ± 3? – Define usual (common causes) & unusual (special causes) Specification limits: – Engineered – Limits = target ± tolerance – Define acceptable & unacceptable
•
Usual v/s Unusual, Acceptable v/s Defective
Another View
Off-Target Large Variation
LSL
USL
LSL
USL
On-Target Center Process
LSL
Reduce Spread
USL
LSL = Lower spec limit USL = Upper spec limit
The statistical view of a problem
More about limits
Poor quality: defects are common (Cpk<1) Good quality: defects are rare (Cpk>1)
? target ? target
Cpk measures “Process Capability”
If process limits and control limits are at the same location, Cpk = 1. Cpk ? 2 is exceptional.
Process capability
Good quality: defects are rare (Cpk>1) Poor quality: defects are common (Cpk<1)
= USL – x = 24 – 20 = .667 3? 3(2) = x - LSL = 20 – 15 = .833 3? 3(2)
Cpk = min
= = 3? = (UPL – x, or x – LPL)
14
15
20
24
26
A Six Sigma Process –
Predictably twice as good as what the customer wants
LSL
-6? +6?
USL
6? 1 ? 1 ? 1 ? 1 ? 1 ?
1?
1
2
3
4
5
6
7
8
9
10
11
12
3 ? v/s 6 ?
6 Sigma curve
LSL
USL
3 Sigma curve
1
2
3
4
5
6
7
8
9
10
11 12 13
14
15
16
Process shift allowed
1.5 SD 1.5 SD USL SD = 1
LSL
1
2
3
4
5
6
7
8
9
10
11 12 13
14
15
16
Six Sigma Measurement
Sigma
7
6
5
4 3
On one condition :
Calculate the defects and estimate the opportunities in the same way...
233 6210 66810 3.4 0.02
DPMO
Six Sigma Measurement
600,000 500,000 400,000 300,000 200,000 100,000 0 1.5 2.5 3.5 # of Sigmas 4.5 5.5
1.5s 2.0s 2.5s 3.0s 3.5s 4.0s 4.5s 5.0s 5.5s 6.0s
500,000 308,300 158,650 67,000 22,700 6,220 1,350 233 32 3.4
# of Defect per Million
Sigma numbers
Defects per million
Components of Six Sigma
Components
Two components of Six Sigma
1. Process Power
2. People Power
Process Power
P-D-C-A
Plan
Plan the change
Act
Act on what was learned
A
P
Check
C
D
Do
Implement the change on a small scale.
Check the results
Approach
Practical Problem
Statistical Problem
Statistical Solution Practical Solution
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
D Define
Identify and state the practical problem
M Measure A Analyze I Improve C Control
Validate the practical problem by collecting data Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution
Confirm and test the statistical solution
Convert the statistical solution to a practical solution
Define
D Define VoC - Who wants the project and why ?
M Measure A Analyze I Improve
The scope of project / improvement (SMART Objective)
Key team members / resources for the project
Critical milestones and stakeholder review
C Control
Budget allocation
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
D Define 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
M Measure
A Analyze I Improve C Control
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. C Control
M Measure A Analyze I Improve
Control
D Define
Don’t be too hasty to declare victory.
M Measure A Analyze I Improve
How will you maintain to gains made?
- Change policy & procedures - Change drawings - Change planning - Revise budget - Training
C Control
Omitting a step in DMAIC? Step Consequences if the step is omitted
1. Define
2. Measure 3. Analyze 4. Improve 5. Control
Tools for DMAIC
Define
What is wrong?
Measure
Data & Process capability
Analyze
When and where are the defects
Improve
How to get to six sigma
Control
Display key measures
? Benchmark ? Baseline ? Contract / Charter ? Kano Model ? Voice of the Customer ? Quality Function Deployment ? Process Flow Map ? Project Management ? “Management by Fact” – 4 What’s
? 7 Basic Tools ? Defect Metrics ? Data Collection, Forms, Plan, Logistics ? Sampling Techniques
? Cause & Effect Diagrams ? Failure Models & ? Effect Analysis ? Decision & Risk Analysis ? Statistical Inference ? Control Charts ? Capability ? Reliability Analysis ? Root Cause Analysis ? 5 Why’s ? Systems Thinking
? Design of Experiments ? Modelling ? Tolerancing ? Robust Design ? Process Map
Statistical Controls ? Control Charts ? Time Series Methods Non Statistical Controls ? Procedure adherence ? Performance Mgmt ? Preventive activities ? Poke yoke
Components
Two components of Six Sigma 1. Process Power
2. People Power
Tell me, I forget. Show me , I remember. Involve me, I understand.
6 ? Training
Master Black Belt
Mentor, trainer, and coach of Black Belts and others in the organization.
Champions
Black Belts
Leader of teams implementing the six sigma methodology on projects.
Delivers successful focused projects using the six sigma methodology and tools.
Green Belts
Team Members / Yellow Belts
Participates on and supports the project teams, typically in the context of his or her existing responsibilities.
Six Sigma Organization
Champion Black Belt Green Belt Green Belt Yellow Belt Yellow Belt Black Belt Green Belt Green Belt
Master Black Belt Black Belt Green Belt Yellow Belt Yellow Belt
6 ? Training
Position in Six Sigma Organisation Senior Executives
Typical Training
Executive overview 2/3 Days Champions Training - I 2 days
Expected Role Post Training Provide Leadership
Champions / Process owners
+
Champions Training –II 3 days
Process Mgmt. & Project champion
(Total 5 days)
Black-Belt
Week 1
Week 2
Week 3
Week 4
Training / Facilitation skills Project-work
Master Black-Belt -As Trainer -Coach teams -Facilitate improvement projects
Black-Belt
- Part
Green Belt
1 Week Green-Belt Training
1 / 2 Days core training on Six-Sigma
Project work
of project teams - Sometime lead the teams
- General process
Employees (Yellow-Belt)
control & improvement - Project Team Member
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
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
Master Black Belt
Roles Responsibilities - Enterprise Six Sigma expert - Highly proficient in using Six Sigma - Permanent full-time change methodology to achieve tangible business results. agent - Certified Black Belt with - Technical expert beyond Black Belt level additional specialized skills or on one or more aspects of process experience especially useful in improvement (e.g., advanced statistical project management, deployment of Six Sigma analysis, communications, program administration, across the enterprise teaching, project coaching) - Identifies high-leverage opportunities for applying the Six Sigma approach across the enterprise - Basic Black Belt training - Green Belt training - Coach / Mentor Black Belts
Black Belt
Roles Responsibilities - Six Sigma technical expert - Leads business process improvement projects where Six - Temporary, full-time change Sigma approach is indicated. agent (will return to other duties after completing a two to three - Successfully completes high-impact year tour of duty as a Black projects that result in tangible benefits Belt) to the enterprise - Demonstrated mastery of Black Belt body of knowledge - Demonstrated proficiency at achieving results through the application of the Six Sigma approach - Coach / Mentor Green Belts - Recommends Green Belts for Certification
Green Belt
Roles Responsibilities - Six Sigma Project originator - Recommends Six Sigma projects - Part-time Six Sigma change - Participates on Six Sigma project agent. Continues to perform teams normal duties while participating - Leads Six Sigma teams in local on Six Sigma project teams improvement projects - Six Sigma champion in local area
Yellow Belt
Roles Responsibilities - Learns and applies Six Sigma - Actively participates in team tasks tools to projects - Communicates well with other team members - Demonstrates basic improvement tool knowledge - Accepts and executes assignments as determined by team
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
• • • • 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
Project Selection
The first step to implement Six Sigma
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 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
• 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
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
• Hard Savings:
– Cost Reduction
• Energy Saving • Raw Material saving • Reduced Rejection, Waste, Repair
– Revenue Enhancement
• Increased production • Yield Improvement • Quality Improvement
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
Types of Savings
• Soft Savings:
– Customer Satisfaction / Loyalty – Employee Satisfaction
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
• 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
• Get Started • Look for low hanging fruits • Even poor usage of these tools will get results • Learn more about Six Sigma
doc_573823952.ppt
The PPT explains on Six Sigma Concepts.
Introduction To Six Sigma
To make customer happier and increase profits
Purpose 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
Allied Signal
Motorola
General Electric
Johnson & Johnson, Ford, Nissan, Honeywell
1985
1987
1992
1995
2002
Dr Mikel J Harry wrote a Paper relating early failures to quality
• • • • • • • •
Delighting Customers. Reducing Cycle Times. Keeping up with Technology Advances. Retaining People. Reducing Costs. Responding More Quickly. Structuring for Flexibility. Growing Overseas Markets.
Current Leadership Challenges
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?
• 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 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?
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 500 0 1996 1998 2000 2002
Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma.
6 Sigma Project Progress
Benefit
Overview of Six Sigma
6 SIGMA AS A PHILOSOPHY CHANGE THE WORLD TRANSFORM THE ORGANIZATION 6 SIGMA AS A PROCESS GROWTH
COSTS OUT
6 SIGMA AS A STATISTICAL TOOL PAIN, URGENCY, SURVIVAL
Overview of Six Sigma
It is a Philosophy – Anything less than ideal is an opportunity for improvement – Defects costs money – Understanding processes and improving them is the It is Statistics most efficient way to achieve lasting results – 6 Sigma processes will produce less than 3.4 defects per million opportunities It is a Process – To achieve this level of performance you need to: Define, Measure, Analyse, Improve and Control
Philosophy
• Know What’s Important to the Customer (CTQ) • Reduce Defects (DPMO) • Center Around Target (Mean) • Reduce Variation (Standard Deviation)
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
Y=
• • • • • • Y Dependent Output Effect Symptom Monitor
f(X)
• • • • • • X1 . . . Xn Independent Input-Process Cause Problem Control
The focus of Six sigma is to identify and control Xs
Two Processes
DMAIC
• Existing Processes
DMADV
• New Processes • DFSS • • • • • Define Measure Analyze Design Verify
• • • • •
Define Measure Analyze Improve Control
Key Concepts
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
Lost Opportunities
Hidden Costs: - Intangible - Difficult to Measure
The Hidden Factory
Average COPQ approximately 15% of Sales
COPQ v/s Sigma Level
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2 3 4 5 6
Cost of Quality % Sales
Sigma Level
CTQ (Critical-ToQuality)
• 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
• 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
• 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
• 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
DPO (Defect Per Opportunity)
• DPO multiplies by one million • Examples:
DPMO (Defect Per Million Opportunities)
– 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
• 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
Forms of Waste
1. 2. 3. 4. 5. 6. 7.
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
• Repairing a defect wastes time and resources (Hidden factory) Hidden
Rework Failure Investigation Operation 1 Test Operation 2
Factory Rework
Failure Investigation Test
Product
• Producing more than necessary or producing at faster rate than required
– Excess labor, space, money, handling
2. Waste of Overproduction
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
• 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
• 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
• Any movement of people, equipment, information that does not contribute value to product or service
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
Waste of untapped human potential. Waste of inappropriate systems Wasted energy and water Wasted materials Waste of customer time Waste of defecting customers
What is Sigma?
Have you ever…
• Shot a rifle? • Played darts?
What is the point of these sports? What makes them hard?
Have you ever…
• Shot a rifle? • Played darts?
Jack
Jill
Who is the better shooter?
Variability
• Deviation = distance between observations and the mean (or average)
Observations Deviations
8 7 10 8 9
Jack
10
9 8 8 7 averages 8.4
10 - 8.4 = 1.6
9 - 8.4 = 0.6 8 - 8.4 = -0.4 8 - 8.4 = -0.4 7 - 8.4 = -1.4 0.0
Jill
Variability
• Deviation = distance between observations and the mean (or average)
Observations
Deviations
Jack
7
7 7 6 6 averages 6.6
7 - 6.6 = 0.4
7 - 6.6 = 0.4 7 - 6.6 = 0.4 6 - 6.6 = -0.6 6 - 6.6 = -0.6 0.0
7 6 7 7 6
Jill
Variability
• Variance = average distance between observations and the mean squared
Observations Deviations Squared Deviations 2.56 0.36 0.16 0.16 1.96 1.0
8 7 10 8 9
Jack
10
9 8 8 7 averages 8.4
10 - 8.4 = 1.6
9 – 8.4 = 0.6 8 – 8.4 = -0.4 8 – 8.4 = -0.4 7 – 8.4 = -1.4 0.0
Jill
Variance
Variability
• Variance = average distance between observations and the mean squared
Observations Deviations Squared Deviations 0.16 0.16 0.16
Jack
7
7 7 6 6 averages 6.6
7 - 6.6 = 0.4
7 - 6.6 = 0.4 7 - 6.6 = 0.4 6 – 6.6 = -0.6 6 – 6.6 = -0.6 0.0
0.36
0.36 0.24
7 6 7 7 6
Jill
Variance
Variability
• Standard deviation = square root of variance
Average Jack Jill 8.4 6.6 Variance 1.0 0.24 Standard Deviation 1.0 0.4898979
Jill Jack
But what good is a standard deviation
Variability
The world tends to be bell-shaped
Even very rare outcomes are possible
Fewer in the “tails” (lower)
Most outcomes occur in the middle
Fewer Even very rare in the outcomes are “tails” possible (upper)
Variability
Here is why:
Even outcomes that are equally likely (like dice), when you add them up, become bell shaped
Add up the dots on the dice
0.2
Probability
0.15 0.1 0.05 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Sum of dots
1 die 2 dice 3 dice
“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
• 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
• Process and Control limits: – Statistical – Process limits are used for individual items – Control limits are used with averages – Limits = ? ± 3? – Define usual (common causes) & unusual (special causes) Specification limits: – Engineered – Limits = target ± tolerance – Define acceptable & unacceptable
•
Usual v/s Unusual, Acceptable v/s Defective
Another View
Off-Target Large Variation
LSL
USL
LSL
USL
On-Target Center Process
LSL
Reduce Spread
USL
LSL = Lower spec limit USL = Upper spec limit
The statistical view of a problem
More about limits
Poor quality: defects are common (Cpk<1) Good quality: defects are rare (Cpk>1)
? target ? target
Cpk measures “Process Capability”
If process limits and control limits are at the same location, Cpk = 1. Cpk ? 2 is exceptional.
Process capability
Good quality: defects are rare (Cpk>1) Poor quality: defects are common (Cpk<1)
= USL – x = 24 – 20 = .667 3? 3(2) = x - LSL = 20 – 15 = .833 3? 3(2)
Cpk = min
= = 3? = (UPL – x, or x – LPL)
14
15
20
24
26
A Six Sigma Process –
Predictably twice as good as what the customer wants
LSL
-6? +6?
USL
6? 1 ? 1 ? 1 ? 1 ? 1 ?
1?
1
2
3
4
5
6
7
8
9
10
11
12
3 ? v/s 6 ?
6 Sigma curve
LSL
USL
3 Sigma curve
1
2
3
4
5
6
7
8
9
10
11 12 13
14
15
16
Process shift allowed
1.5 SD 1.5 SD USL SD = 1
LSL
1
2
3
4
5
6
7
8
9
10
11 12 13
14
15
16
Six Sigma Measurement
Sigma
7
6
5
4 3
On one condition :
Calculate the defects and estimate the opportunities in the same way...
233 6210 66810 3.4 0.02
DPMO
Six Sigma Measurement
600,000 500,000 400,000 300,000 200,000 100,000 0 1.5 2.5 3.5 # of Sigmas 4.5 5.5
1.5s 2.0s 2.5s 3.0s 3.5s 4.0s 4.5s 5.0s 5.5s 6.0s
500,000 308,300 158,650 67,000 22,700 6,220 1,350 233 32 3.4
# of Defect per Million
Sigma numbers
Defects per million
Components of Six Sigma
Components
Two components of Six Sigma
1. Process Power
2. People Power
Process Power
P-D-C-A
Plan
Plan the change
Act
Act on what was learned
A
P
Check
C
D
Do
Implement the change on a small scale.
Check the results
Approach
Practical Problem
Statistical Problem
Statistical Solution Practical Solution
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
D Define
Identify and state the practical problem
M Measure A Analyze I Improve C Control
Validate the practical problem by collecting data Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution
Confirm and test the statistical solution
Convert the statistical solution to a practical solution
Define
D Define VoC - Who wants the project and why ?
M Measure A Analyze I Improve
The scope of project / improvement (SMART Objective)
Key team members / resources for the project
Critical milestones and stakeholder review
C Control
Budget allocation
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
D Define 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
M Measure
A Analyze I Improve C Control
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. C Control
M Measure A Analyze I Improve
Control
D Define
Don’t be too hasty to declare victory.
M Measure A Analyze I Improve
How will you maintain to gains made?
- Change policy & procedures - Change drawings - Change planning - Revise budget - Training
C Control
Omitting a step in DMAIC? Step Consequences if the step is omitted
1. Define
2. Measure 3. Analyze 4. Improve 5. Control
Tools for DMAIC
Define
What is wrong?
Measure
Data & Process capability
Analyze
When and where are the defects
Improve
How to get to six sigma
Control
Display key measures
? Benchmark ? Baseline ? Contract / Charter ? Kano Model ? Voice of the Customer ? Quality Function Deployment ? Process Flow Map ? Project Management ? “Management by Fact” – 4 What’s
? 7 Basic Tools ? Defect Metrics ? Data Collection, Forms, Plan, Logistics ? Sampling Techniques
? Cause & Effect Diagrams ? Failure Models & ? Effect Analysis ? Decision & Risk Analysis ? Statistical Inference ? Control Charts ? Capability ? Reliability Analysis ? Root Cause Analysis ? 5 Why’s ? Systems Thinking
? Design of Experiments ? Modelling ? Tolerancing ? Robust Design ? Process Map
Statistical Controls ? Control Charts ? Time Series Methods Non Statistical Controls ? Procedure adherence ? Performance Mgmt ? Preventive activities ? Poke yoke
Components
Two components of Six Sigma 1. Process Power
2. People Power
Tell me, I forget. Show me , I remember. Involve me, I understand.
6 ? Training
Master Black Belt
Mentor, trainer, and coach of Black Belts and others in the organization.
Champions
Black Belts
Leader of teams implementing the six sigma methodology on projects.
Delivers successful focused projects using the six sigma methodology and tools.
Green Belts
Team Members / Yellow Belts
Participates on and supports the project teams, typically in the context of his or her existing responsibilities.
Six Sigma Organization
Champion Black Belt Green Belt Green Belt Yellow Belt Yellow Belt Black Belt Green Belt Green Belt
Master Black Belt Black Belt Green Belt Yellow Belt Yellow Belt
6 ? Training
Position in Six Sigma Organisation Senior Executives
Typical Training
Executive overview 2/3 Days Champions Training - I 2 days
Expected Role Post Training Provide Leadership
Champions / Process owners
+
Champions Training –II 3 days
Process Mgmt. & Project champion
(Total 5 days)
Black-Belt
Week 1
Week 2
Week 3
Week 4
Training / Facilitation skills Project-work
Master Black-Belt -As Trainer -Coach teams -Facilitate improvement projects
Black-Belt
- Part
Green Belt
1 Week Green-Belt Training
1 / 2 Days core training on Six-Sigma
Project work
of project teams - Sometime lead the teams
- General process
Employees (Yellow-Belt)
control & improvement - Project Team Member
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
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
Master Black Belt
Roles Responsibilities - Enterprise Six Sigma expert - Highly proficient in using Six Sigma - Permanent full-time change methodology to achieve tangible business results. agent - Certified Black Belt with - Technical expert beyond Black Belt level additional specialized skills or on one or more aspects of process experience especially useful in improvement (e.g., advanced statistical project management, deployment of Six Sigma analysis, communications, program administration, across the enterprise teaching, project coaching) - Identifies high-leverage opportunities for applying the Six Sigma approach across the enterprise - Basic Black Belt training - Green Belt training - Coach / Mentor Black Belts
Black Belt
Roles Responsibilities - Six Sigma technical expert - Leads business process improvement projects where Six - Temporary, full-time change Sigma approach is indicated. agent (will return to other duties after completing a two to three - Successfully completes high-impact year tour of duty as a Black projects that result in tangible benefits Belt) to the enterprise - Demonstrated mastery of Black Belt body of knowledge - Demonstrated proficiency at achieving results through the application of the Six Sigma approach - Coach / Mentor Green Belts - Recommends Green Belts for Certification
Green Belt
Roles Responsibilities - Six Sigma Project originator - Recommends Six Sigma projects - Part-time Six Sigma change - Participates on Six Sigma project agent. Continues to perform teams normal duties while participating - Leads Six Sigma teams in local on Six Sigma project teams improvement projects - Six Sigma champion in local area
Yellow Belt
Roles Responsibilities - Learns and applies Six Sigma - Actively participates in team tasks tools to projects - Communicates well with other team members - Demonstrates basic improvement tool knowledge - Accepts and executes assignments as determined by team
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
• • • • 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
Project Selection
The first step to implement Six Sigma
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 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
• 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
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
• Hard Savings:
– Cost Reduction
• Energy Saving • Raw Material saving • Reduced Rejection, Waste, Repair
– Revenue Enhancement
• Increased production • Yield Improvement • Quality Improvement
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
Types of Savings
• Soft Savings:
– Customer Satisfaction / Loyalty – Employee Satisfaction
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
• 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
• Get Started • Look for low hanging fruits • Even poor usage of these tools will get results • Learn more about Six Sigma
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