Introduction to Six Sigma

Six Sigma is a disciplined, data-driven methodology to eliminate defects in a process A way to assess performance of a process
Devised at Motorola in 1987 Higher the process sigma, the fewer the defects

Focused on customer requirements

Internal, but especially external customers Track Defects (aka CTQs) that affect satisfaction, loyalty, revenue, market share

Origin of Six Sigma

1987 Motorola Develops Six Sigma
Raised Quality Standards

Other Companies Adopt Six Sigma

GE 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

Six Sigma

A scientific and practical method to achieve improvements in a company

Scientific: Structured approach. Assuming quantitative data. Show me the money

Show me the data

Practical: Emphasis on financial result. Start with the voice of the customer.

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 6 Sigma processes will achieve lasting results 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 Whats Important to the Customer (CTQ) Reduce Defects (DPMO) Center Around Target (Mean) Reduce Variation (Standard Deviation)

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 Improve Control

Define Measure Analyze Design Verify

Where can Six Sigma be applied?

Service Management
Purchase

Design

Administration

Six Sigma Methods

Production

Quality Depart. HRM

IT

M&S

Is Six Sigma New?

The basic premise of Six Sigma started in 1600 B.C. by Egyptian physicians and is noted on the Edwin Smith papyrus. It essentially says: Make no remedy without first understanding the cause.

Juran, Deming, Shewhart, and Crosby simply restated this principle.

Key Concepts

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

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

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)

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
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

Examples of what Six Sigma means in business

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

Financial Aspects Benefits of 6s approach w.r.t. financials

s-level Defect rate Costs of poor quality Status of the (ppm) company 6 3.4 < 10% of turnover World class 5 233 10-15% of turnover 4 6210 15-20% of turnover Current standard 3 66807 20-30% of turnover 2 308537 30-40% of turnover Bankruptcy

Statistical background
Some Key measure

Target = m

Statistical background
Control limits +/ - 3 s

Target = m

Statistical background
Required Tolerance LSL +/ - 3 s USL

Target = m

Statistical background
Tolerance LSL +/ - 3 s USL

Target = m +/ - 6 s
Six-Sigma

Statistical background
Tolerance LSL +/ - 3 s USL

1350 pp m

1350 pp m

Target = m +/ - 6 s

Statistical background
Tolerance LSL +/ - 3 s USL

0.001 pp m

1350 pp m

1350 pp m

0.001 pp m

Target = m +/ - 6 s

Statistical background
Tolerance
LSL

1. 5 s

USL

0 ppm

3. 4 ppm

66807 ppm

3. 4 ppm

+/ - 6 s

Performance Standards

s
2 3 4 5 6

PPM
308537 66807 6210 233 3.4

Yield
69.1% 93.3% 99.38% 99.977% 99.9997%

Current standard

World Class

Process performance

Defects per million

Long term yield

Reduce Process Variation & Centering

Off-Target Too Much Variation

Centered On-Target

Center Process

Reduce Spread

The objective is to understand customer requirements and reduce process variation and center of target

Critique of ISO 9000

Bureaucratic, large scale Focus on satisfying auditors, not customers Certification is the goal; the job is done when certified Little emphasis on improvement The return on investment is not transparent Main driver is:
We need ISO 9000 to become a certified supplier, Not we need to be the best and most cost effective supplier to win our customers business

Corrupting influence on the quality profession

Components of Six Sigma

Components
Two components of Six Sigma

1. Process Power
2. People Power

Process Power

P-D-C-A
Act
Act on what was learned

Plan
Plan the change

Check
Check the results

Do
Implement the change on a small scale.

DMAIC - simplified
Define
What is important?

Measure
How are we doing?

Analyze
What is wrong?

Improve
Fix whats 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

Define
Business Case Voice of the Customer
Delighters More Is Better

VOC

Key Issue

CTQ

Must Be

Project Charter
Problem Statement: Goal: Business Case: Scope: Cost Benefit Projection: Milestones:

Initial Process Mapping

Inputs Process Outputs

CUSTOMERS

SUPPLIERS

Yield: 60% Yield: 90% Yield: 45% Yield: 98%

Example - SIPOC
A SIPOC will allow your project team to put parameters around the process being reviewed and identify the areas impacted both up and down stream

SIPOC
Suppliers Clients Sales People Candidates Web Site Recruiting Data Base Input Requirements Resumes Profiles Margin Template Process Output Profile Interview Summaries Offer Letters Customer Client Sales People Delivery Management Candidate/Employee

Get Requirement

Search for Candidate

Screen Candidate

Make Offer

Present Candidate

Fill Requirement

Suppliers who feeds the process Inputs what do they feed Process steps in the process Outputs outputs of the process Customer who pulls from the process

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

Measure
Identify the Metrics
I P O

Identify Process Capability

LSL USL

Display Data
UCL
1000 0 -1000

Cp = 0.4 s = 2.7

X LCL

10

20

30

D B F A C E Other

Measure the process Validate Measurement Systems

Col # Inspector Sample # 1 2 3 4 5 Totals Averages 1 1st Trial 2.0 2.0 1.5 3.0 2.0 10.5 2.1 Sum XA 2 A 2nd Trial 1.0 3.0 1.0 3.0 1.5 9.5 1.9 4.0 2.0 3 Diff 1.0 1.0 0.5 0.0 0.5 3.0 0.6 4 1st Trial 1.5 2.5 2.0 2.0 1.5 9.5 1.9 Sum XB 5 B 2nd Trial 1.5 2.5 1.5 2.5 0.5 8.5 1.7 3.6 1.8 6 Diff 0.0 0.0 0.5 0.5 1.0 2.0 0.4

Prioritize the Metrics

O1 O2 O3 O4 I1 I2 I3 I4

Data Collection Plan

Data Collection Plan
What questions do you want to answer? Operational Definition and Procedures Data What Measure type/ How Related Sampling How/ Data type measured conditions notes where

FMEA

How will you ensure consistency and stability?

What is your plan for starting data collection? How will the data be displayed?

R A

R B

Analyze
D Define How well or poorly processes are working compared with - Best possible (Benchmarking) - Competitors Shows you maximum possible result Dont focus on symptoms, find the root cause

M Measure
A Analyze I Improve C Control

Analyze
Process Door
VA NVA
22 21

Data Door
O O O O O

Cause & Effect

20 19 18 17 16 15 14 13 12

n O n

n X

O n

n O

X n O X n X X

n X X

10

Hypothesis-Testing
Chi-Square

Design of Experiments

c
Y

t-test ANOVA

Regression Analysis
X1

Regression

. .

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

Improve
Generate Solutions
A B C D 4 1 3 2

Plan Implementation
1 2
A B C D
G E

10

F G H I J

Perform Cost-Benefit Analysis

Run Pilot
Full scale Original

Test

Assess Risks Select the Solution

FMEA

Control
D Define Dont 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

Control
Document & Standardize
Training Curriculum Training Manual

Key Learnings
Results Learnings

Closure

Fill to here

Recommendations
next

QC Process Chart
Date of Issue: Revision Date Product Name Process Name Process Code # Issued by: Reason Approved by: Signature Flowchart Control/Check Points Response to Abnormality Work Control Immediate Permanent Instructions Code # CharacMethod Who Fix Who Notes teristicsLimits Fix

Process Owner

. Evaluate Project Results

12

Ownership & Monitoring

UCL

Process Change Management

Before After

s = Cp =

3.7 1.4 LSL

USL

s = 2.7 Cp = 0.4

}
A1 A2 A3 A4

Improvement

A2 A1 A3 A4

Before

After

Good

Improvement Remaining Gap Target

LCL

Step 4 changes implemented

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 Whats

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 Whys 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

6 s 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

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 Cont.
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 - Permanent full-time change Sigma 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 Sigma approach is - Temporary, full-time change 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.

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 Cont.

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
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

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.

Questions and Answers