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1QualityGurus.com
Introduction to Six SigmaIntroduction to Six Sigma
Purpose of six sigma :
To make customer happier and increase profits
2QualityGurus.com
Origin of Six SigmaOrigin 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
3QualityGurus.com
Time LineTime Line
2002200219951995199219921987198719851985
Dr Mikel J Harry wrote a paper relating early failures to quality
Motorola
Allied Signal
General Electric
Johnson & Johnson,Ford, Nissan,Honeywell
4QualityGurus.com
Pilot’s Six Sigma PerformancePilot’s Six Sigma Performance
Width of landing strip1/2 Widthof landing
strip
If pilot always lands within 1/2 the landing strip width, we say that he has Six Sigma capability.
5QualityGurus.com
Current Leadership ChallengesCurrent 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.
6QualityGurus.com
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.
7QualityGurus.com
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
8QualityGurus.com
GE Six Sigma EconomicsGE Six Sigma Economics
1996 1998 20002002
0
500
1000
1500
2000
2500
1996
CostBenefit
(in millions)
Source: GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma.
9QualityGurus.com
Overview of Six SigmaOverview of Six Sigma
PAIN, URGENCY, SURVIVAL
COSTS OUT
GROWTH
TRANSFORM THE ORGANIZATION
CHANGE THE
WORLD
6 SIGMA AS ASTATISTICAL
TOOL
6 SIGMA AS APHILOSOPHY
6 SIGMA ASA PROCESS
10QualityGurus.com
Overview of Six SigmaOverview 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 most efficient way to achieve lasting results
It is a Process– To achieve this level of
performance you need to: Define, Measure, Analyse,
Improve and Control
It is Statistics– 6 Sigma processes will
produce less than 3.4 defects per million opportunities
11QualityGurus.com
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
12QualityGurus.com
Management involvement?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?
13QualityGurus.com
PhilosophyPhilosophy
• Know What’s Important to the Customer (CTQ)• Reduce Defects (DPMO) • Centre Around Target (Mean) • Reduce Variation (Standard Deviation)
14QualityGurus.com
Critical ElementsCritical Elements
• Genuine Focus on the Customer• Data and Fact Driven Management• Process Focus• Proactive management• Boundary-less Collaboration• Drive for Perfection; Tolerance for failure
15QualityGurus.com
Data Driven DecisionData Driven Decision
Y X1 . . . Xn
Dependent Independent
Output Input-Process
Effect Cause
Symptom Problem
Monitor Control
f(X)f(X)Y=Y=
16QualityGurus.com
Two ProcessesTwo Processes
• DefineDefine• MeasureMeasure• AnalyzeAnalyze• ImproveImprove• ControlControl
• DefineDefine• MeasureMeasure• AnalyzeAnalyze• DesignDesign• VerifyVerify
DMAICDMAIC DMADVDMADV
• Existing ProcessesExisting Processes• New ProcessesNew Processes• DFSSDFSS
17QualityGurus.com
Key ConceptsKey Concepts
18QualityGurus.com
COPQ (Cost of Poor Quality)COPQ (Cost of Poor Quality)
- Lost Opportunities
- The Hidden Factory
- More Setups- Expediting Costs- Lost Sales- Late Delivery- Lost Customer Loyalty- Excess Inventory- Long Cycle Times- Costly Engineering Changes Average COPQ approximately 15%
of Sales
Hidden Costs:- Intangible- Difficult to Measure
Traditional Quality Costs:- Tangible- Easy to Measure
- Inspection- Warranty- Scrap- Rework- Rejects
19QualityGurus.com
COPQ vs. Sigma LevelCOPQ vs. Sigma Level
0%5%
10%15%20%25%30%35%40%45%50%
2 3 4 5 6
Co
st
of
Qu
ali
ty %
Sa
les
Sigma Level
20QualityGurus.com
ProcessProcess
• A Process is a group of steps, tasks, or activities, which take inputs (People, Material, Information …..) and in some way change them to produce an output (Service, Product……)
XsXs YsYsStep-1Step-1 Step-2Step-2 Step-3Step-3
InputInput ProcessProcess OutputOutput
21QualityGurus.com
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
22QualityGurus.com
Defective and DefectDefective 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)
23QualityGurus.com
Defect OpportunityDefect 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
24QualityGurus.com
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
25QualityGurus.com
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
26QualityGurus.com
What is Sigma?What is Sigma?
27QualityGurus.com
Have you ever…Have you ever…
• Shot a rifle?
• Played darts?
What is the point of these sports?What makes them hard?
28QualityGurus.com
Have you ever…Have you ever…
• Shot a rifle?
• Played darts?
Who is the better shooter?
Jack
Jill
29QualityGurus.com
Variability - JackVariability - Jack
• Deviation = distance between observations and the mean (or average)
Jill
Jack
871089
Observations Deviations
10 10 - 8.4 = 1.6
9 9 - 8.4 = 0.6
8 8 - 8.4 = -0.4
8 8 - 8.4 = -0.4
7 7 - 8.4 = -1.4
averages 8.4 0.0
30QualityGurus.com
Variability - JackVariability - Jack
• Variance = average distance between observations and the mean squared
Jill
Jack
871089
Observations Deviations
10 10 - 8.4 = 1.6
9 9 - 8.4 = 0.6
8 8 - 8.4 = -0.4
8 8 - 8.4 = -0.4
7 7 - 8.4 = -1.4
averages 8.4 0.0
Squared Deviations
2.56
0.36
0.16
0.16
1.96
1.0
31QualityGurus.com
Variability - JillVariability - Jill
• Deviation = distance between observations and the mean (or average)
Jill
76776
JackObservations Deviations
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
6 6 - 6.6 = -0.6
6 6 - 6.6 = -0.6
averages 6.6 0.0
32QualityGurus.com
Variability - JillVariability - Jill
• Variance = average distance between observations and the mean squared
Jill
76776
JackObservations Deviations
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
6 6 - 6.6 = -0.6
6 6 - 6.6 = -0.6
averages 6.6 0.0
Squared Deviations
0.16
0.16
0.16
0.36
0.36
0.24
33QualityGurus.com
Standard deviationStandard deviation
• Standard deviation = square root of variance
Jack
Jill
Average Variance Standard Deviation
Jack 8.4 1.0 1.0
Jill 6.6 0.24 0.4898979
But what good is a standard deviation
34QualityGurus.com
VariabilityVariabilityThe world tends to be bell-shaped
Most outcomes occur in the
middle
Fewer in the “tails” (upper)
Even very rare outcomes are possible
Even very rare outcomes are possible
Fewer in the “tails” (upper)
QualityGurus.com
35QualityGurus.com
““Normal” bell shaped curveNormal” bell shaped curve
Normal distributions are divide up into 3 standard deviations on each side of the mean
36QualityGurus.com
Causes of VariabilityCauses 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
37QualityGurus.com
LimitsLimits
• 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
38QualityGurus.com
Usual vs. Unusual, Acceptable vs. DefectiveUsual vs. Unusual, Acceptable vs. Defective
Another View
LSL USL
Off-Target
USLLSL
Large Variation
CenterProcess
Reduce Spread
The statistical view of a problem
On-Target
USLLSL LSL = Lower spec limit
USL = Upper spec limit
LSL = Lower spec limit
USL = Upper spec limit
39QualityGurus.com
More about limitsMore about limits
Good quality: defects are rare (Cpk>1) Poor quality: defects are common (Cpk<1)
Cpk measuresmeasures “Process Capability”
If process limits and control limits are at the same location, Cpk = 1. LSL and USL = Lower and Upper Specification Limits / LPL and UPL = Lower and Upper Process Limits
μtarget
μtarget
40QualityGurus.com
A Six Sigma Process A Six Sigma Process
• Predictably twice as good as what the customer wants
1 122 3 4 5 6 7 8 9 10 11
1 1 1 1 11
LSL USL
41QualityGurus.com
Process shift allowedProcess shift allowed
2 3 4 5 6 7 8 9 1210 111
LSL USL
SD = 1
1.5 SD 1.5 SD
42QualityGurus.com
Six Sigma MeasurementSix Sigma Measurement
3456
7
668106210
2333.4
Sigma
DPMO
43QualityGurus.com
Six Sigma MeasurementSix Sigma Measurement
0
100,000
200,000
300,000
400,000
500,000
600,000
1.5 2.5 3.5 4.5 5.5
# of Sigmas
# of
Def
ect p
er M
illio
n
Sigma Defects numbers per million
1.5 500,000 2.0 308,300 2.5 158,650 3.0 67,000 3.5 22,700 4.0 6,220 4.5 1,350 5.0 233 5.5 32 6.0 3.4
44QualityGurus.com
Components of Six SigmaComponents of Six Sigma
45QualityGurus.com
Components of Six SigmaComponents of Six Sigma
• Two components of Six Sigma
– Process Power
– People Power
46QualityGurus.com
Process PowerProcess Power
47QualityGurus.com
ApproachApproach
Pra
cti
cal
Pro
ble
m
Sta
tisti
cal
Pro
ble
m
Sta
tisti
cal
Solu
tion
Pra
cti
cal
Solu
tion
48QualityGurus.com
DMAIC - simplifiedDMAIC - 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
49QualityGurus.com
DMAIC approachDMAIC approachD
Define
MMeasure
AAnalyze
IImprove
CControl
Identify and state the practical problem
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
50QualityGurus.com
DefineDefineD
Define
MMeasure
AAnalyze
IImprove
CControl
VoCVoC - Who wants the project and why ?
The scope of project / improvement (SMART Objective)
Key team members / resources for the project
Critical milestones and stakeholder review
Budget allocation
51QualityGurus.com
MeasureMeasureD
Define
MMeasure
AAnalyze
IImprove
CControl
Ensure measurement system reliability
Prepare data collection plan
Collect data
- Is tool used to measure the output variable flawed ?
- 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 ?
52QualityGurus.com
AnalyzeAnalyzeD
Define
MMeasure
AAnalyze
IImprove
CControl
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
53QualityGurus.com
ImproveImproveD
Define
MMeasure
AAnalyze
IImprove
CControl
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.
54QualityGurus.com
ControlControlD
Define
MMeasure
AAnalyze
IImprove
CControl
Don’t be too hasty to declare victory.
How will you maintain to gains made?
- Change policy & procedures
- Change drawings- Change planning- Revise budget- Training
55QualityGurus.com
People PowerPeople Power
Tell me, I forget. Show me , I remember. Involve me, I understand.
56QualityGurus.com
6 6 Training Training
Master Black Belt
Black Belts
Green Belts
Team Members / Yellow Belts
Ch
am
pio
ns
Mentor, trainer, and coach of Black Belts and others in the organization.
Leader of teams implementing the six sigma methodology on projects.
Delivers successful focused projects using the six sigma methodology and tools.
Participates on and supports the project teams, typically in the context of his or her existing responsibilities.
57QualityGurus.com
Ch
am
pio
ns
ChampionChampion
• 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
58QualityGurus.com
Ch
am
pio
ns
ChampionChampion
• 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
59QualityGurus.com
Master Black BeltMaster Black Belt
• Enterprise Six Sigma expert• Permanent full-time change agent• Certified Black Belt with additional specialized skills or
experience especially useful in deployment of Six Sigma across the enterprise
Master Black Belt
60QualityGurus.com
Master Black BeltMaster Black Belt
• Highly proficient in using Six Sigma methodology (e.g., advanced statistical analysis, project management, communications, program administration, teaching, project coaching)
• Identifies high-leverage opportunities for applying the Six Sigma
• Basic Black Belt training• Green Belt training• Coach / Mentor Black Belts
Master Black Belt
61QualityGurus.com
Black BeltBlack Belt
• Six Sigma technical expert• Temporary, full-time change agent (will return to other
duties after completing a two to three year tour of duty as a Black Belt)
Black
Belts
62QualityGurus.com
Black BeltBlack Belt
• Leads business process improvement projects where Six Sigma approach is indicated.
• Successfully completes high-impact projects that result in tangible benefits 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
Black
Belts
63QualityGurus.com
Green BeltGreen Belt
• Six Sigma Project originator• Part-time Six Sigma change agent. Continues to perform
normal duties while participating on Six Sigma project teams• Six Sigma champion in local area• Recommends Six Sigma projects• Participates on Six Sigma project teams• Leads Six Sigma teams in local improvement projects
Green Belts
64QualityGurus.com
Yellow BeltYellow Belt
• Learns and applies Six Sigma tools to projects• Actively participates in team tasks• Communicates well with other team members• Demonstrates basic improvement tool knowledge• Accepts and executes assignments as determined
by teamTeam Members /
Yellow Belts
65QualityGurus.com
Financial AnalystFinancial 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.
66QualityGurus.com
Project SelectionProject Selection
67QualityGurus.com
Sources of ProjectsSources 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?
68QualityGurus.com
Sources of ProjectsSources 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?
69QualityGurus.com
Harvesting the Fruit of Six SigmaHarvesting the Fruit of Six Sigma
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Sweet Fruit Design for RepeatabilityProcess Enhancement
Bulk of FruitProcess Characterization and Optimization
Low Hanging FruitSeven Basic Tools
Ground FruitLogic and Intuition
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
70QualityGurus.com
What Qualifies as a Six Sigma ProjectWhat 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.