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Six Sigma Introduction
Supply Chain Leadership Committee
Nashville, TN
November 4, 2005
Steve FreudenthalMilliken & Company
Six Sigma Introduction
1.Six Sigma Definition2.Evolution of Six Sigma3.The Six Sigma Process Today4.The DMAIC Process5.Consultant Selection
Everything starts with the customer. The infrastructure for cultural change is the most powerful contribution of Six Sigma. Decisions about which projects to pursue must be based at least in part on the potential impact on net present value. Sustained improvement is possible only with management engagement. CEO goals are translated to frontline projects and coordinated through an organization of people and technical resources. A standard problem-solving process and associated tool set provides the means for basing decisions on data.
Key Principles of Six Sigma at XeroxKey Principles of Six Sigma at Xerox
Statistical Quality Control
Continuous Improvement/Kaizen
Malcolm Baldrige National Quality Award
Total Productive MaintenanceSupply Chain Management
Quality CirclesISO 9000 Standards
ReengineeringTheory of Constraints
Lean ManufacturingSix Sigma Quality
?
ISO 9000:2000
Quality Initiatives
What does “Six Sigma” mean?
Phase I1. Early 1980’s2. Pioneered at Motorola3. Statistical approach4. Measured DPMO5. Variation is the enemy6. Focused on:
1. Elimination of defects2. Improving product and service quality3. Reducing cost4. Continuous process improvement
Phase II1. Mid 1990’s2. Revised by Jack Welch at General Electric3. Linked Six Sigma to business strategy and customer
needs4. Strong measurement on bringing dollars to the bottom
line5. Strong financial community involvement6. Project driven7. High potentials selected to be Black Belts8. Black Belts expected to deliver $250,000/year to bottom
line (hard dollars)9. Black Belts promoted up after two years10.All senior leaders trained (Green Belt)11.Projects are sponsored by business leadership (Top
Down)12.2% of management committed full-time
What does “Six Sigma” mean?
What does “Six Sigma” mean?
Phase III1. 2000’s2. Lean Six Sigma3. Caterpillar, Xerox, DuPont4. Combined lean manufacturing techniques and Six
Sigma5. Benefit: High speed, low cost
Six Sigma Savings Averages by Six Sigma Savings Averages by AreaArea
0
100
200
300
400
500
ManufacturingProject
PDfSS Project Back OfficeProject
SSA Project DfSS Project Global Project
$35K
$100K
$180K
$450K
$500K$480K
Roles and ResponsibilityDeploymentManager
Champions/Sponsors
Black Belts
Master Black Belts
Green Belts
• Identification and Prioritization of Projects by Division
• Assign and Review Activities of Black Belts
• Facilitate Project Implementation• Key Stakeholder in Project Success
• Lead 4-6 strategic improvement projects each year
• Expert in Six Sigma techniques• Help local organization in Six Sigma disciplines• Full-Time Position
• Mentor/coach Black Belts• Teach Six Sigma techniques• Full-time Corporate Position
• Domain Experts• 20-30% on one Project
Six Sigma Project Prioritize/ Select Scoring RulesScore $ Savings
(Hard/Annual
Time
(Duration)
Effort
(# people & $; Expense $; Cap $)
Success factor
(1 – risk)
9 >$250 K
(High)
< 4 months
(short)
< 3
(Small)HighNo capital; No IT; No Suppliers
Small work group affected; Short Duration; Small Project Team
7 $100 – $250 K
(Moderate)
4 - 8 months
(moderate)
4 – 6
(Moderate)ModerateNo capital; No IT; Some Suppliers
Multiple work groups affected;
Moderate Duration; Small Project Team
3 $50 - $100 K
(Okay)
8 – 12 months
(long)
6 – 10
(large)SmallSome capital; Some IT;
Numerous Suppliers; Many work groups;
Long Duration; Moderate Project Team Size
1 <$50K
(Small)
> 12 months
(very long)
> 10
(very large)LowSignificant capital; Significant IT;
Very many Suppliers Very Many work groups
Very Long Duration; Large Project Team SizeExample Total Score
Project A 9 7 3 3 22
$300 K 7 months 8 person team Some capital, some IT, many work groups affected, moderate duration
Project B 3 9 9 9 30
$ 75K 4 months 2 person team No capital, no IT, small project team
Johnson Controls Inc.
Improvements Start with High Value Projects
Prioritized by Management
Team
ProjectCandidates
• Customer Issues / Opportunities• Business Strategy• Goals / Objectives• Priorities
BE
NE
FIT
Lo
wM
ed
Hig
h
EFFORTLow Med High
Structured approach to project selection
Project Selection • Structured Process
• Links Business Strategy & Priorities
• Led by Deployment Managers
• Based on Benefit / Effort Analysis
• Leadership Accountable for Prioritization
Xerox
Six Sigma Improvement Model
“DMAIC” Process
• Define – describe the process, problem, opportunity
• Measure – gather data• Analyze – listen to the data• Improve – develop solutions,
design processes • Control – plan for stability
Six Sigma Design Model
“DMADV” Process
• Define – describe the process, problem, opportunity
• Measure – gather data• Analyze – listen to the data• Develop – create the solution• Verify – does the solution work?
Define
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0Control
Performance
ObjectiveMain Activities Potential Tools and Techniques
•To identify and/or validate the improvement opportunity, develop the business processes, define critical customer requirements, and prepare themselves to be an effective project team.
•Validate/ Identify Business Opportunity
•Validate/ Develop Team Charter
•Identify and Map Processes
•Identify Quick Win and Refine Process
•Translate VOC •Develop Team Guidelines & Ground Rules
Business Case
Goal Statement
Project Plan
Opportunity Statement
Project Scope
Team Selection
Team CharterTASKS ACTIVITIES RESP. START DUE STATUS &ACTIONS
TASKS ACTIVITIES RESP. START DUE STATUS &ACTIONS
Action Plan
Sigma Goal (CCR)
GapProject Focus
$$
CCRs
Tools* are EssentialMeasureMeasure
•Operational Definitions
•Data Collection Plan
•Pareto Chart•Histogram•Box Plot•Statistical Sampling
•Measurement System Analysis
•Setup Reduction
•Generic Pull•Kaizen•Control Charts•Process Capability, Cp & Cpk
AnalyzeAnalyze
•Pareto Charts•C&E Matrix•Fishbone Diagrams
•Brainstorming•Detailed ‘As-Is’ Process Maps
•Basic Statistical Tools
•SupplyChainAccelerator Analysis
•Non Value-Added Analysis
•Hypothesis Testing
•Confidence Intervals
•FMEA•Simple & Multiple Regression
•ANOVA•Queuing Therory•Analytical Batch Size
ImproveImprove
•Brainstorming•Benchmarking•Process Improvement Techniques
•Line Balancing•Process Flow Improvement
•Constraint Identification
•Replenishment Pull
•Sales & Operations Planning
•Poka-Yoke•FMEA•Solution Selection Matrix
•‘To-Be’ Process Maps
•Piloting and Simulation
ControlControl
•Control Charts
•Standard Operating Procedures (SOP’s)
•Training Plan•Communication Plan
•Implementation Plan
•Visual Process Control
•Mistake-Proofing
•Process Control Plans
•Project Commissioning
•Project Replication
•Plan-Do-Check-Act Cycle
* Tool array adapted from Lean Six Sigma for Service by Michael George
•Value Stream Map
•Various Financial Analysis
•Charter Form•Multi-Generational Plan
•Stakeholder Analysis
•Communication Plan
•SIPOC Map•High-Level Process Map
•Non-Value Added Analysis
•VOC and Kano Analysis
•Lean Quality Function Deploy-ment (QFD)
•RACI & Quad Charts
DefineDefine
, but Not Sufficient
Xerox
Measure
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0Control
Performance
Objective Main Activities Potential Tools and Techniques
•To identify critical measures that are necessary to evaluate the success, meeting critical customer requirements and begin developing a methodology to effectively collect data to measure process performance.
•To understand the elements of the six sigma calculation and establish baseline sigma for the processes the team is analyzing.
•Identify Input, Process, and Output Indicators
•Develop Operational Definition & Measurement Plan
•Plot and Analyze Data
•Determine if Special Cause Exists
•Determine Sigma Performance
•Collect Other Baseline Performance Data
Input Process Output CCR
Process Indicator
Process Indicator
Output Indicator
Input Indicator
A B
A1
D1
D2
A2
A B
A1
D1
D2
A2
A B
A1
D1
D2
A2
Checksheets
CCR
Gap
Sigma=
X
UCL
LCL
Sigma=
X
Analyze
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0Control
Performance
Objective Main Activities Potential Tools and Techniques
• To stratify and analyze the opportunity to identify a specific problem and define an easily understood problem statement.
• To identify and validate the root causes that assure the elimination of “real” root causes and thus the problem the team is focused on.
• To determine true sources of variation and potential failure modes that lead to customer dissatisfaction.
•Stratify Process•Stratify Data & Identify
Specific Problem•Develop Problem
Statement• Identify Root Causes•Design Root Cause
Verification Analysis•Validate Root Causes•Comparative Analysis•Sources of Variation
Studies•Failure Modes & Effects
Analysis•Regression Analysis•Process Control•Process Capability•Design of Experiments
Indicators & Problem Statement
(effect)
Problem Statement
Quantified Root Causes
25%
50%
Total Risk Priority Resulting Risk Priority
Process/Product: FMEA Date: (original)
FMEA Team: (Revised)
Black Belt: Page: of
Process Actions Results
Item Process Steps
Potential Failure Mode
Potential Effects of Failure
Sev
erit
y
Potential Cause(s) of Failure
Occ
urre
nce
Current Controls
Det
ecti
on
Ris
k P
rior
ity
Recom-mended Action
Responsibility and Target Completion Date
Action Taken
Sev
erit
y
Occ
urre
nce
Det
ecti
on
Ris
k P
rior
ity
Total Risk Priority Resulting Risk Priority
Process/Product: FMEA Date: (original)
FMEA Team: (Revised)
Black Belt: Page: of
Process Actions Results
Item Process Steps
Potential Failure Mode
Potential Effects of Failure
Sev
erit
y
Potential Cause(s) of Failure
Occ
urre
nce
Current Controls
Det
ecti
on
Ris
k P
rior
ity
Recom-mended Action
Responsibility and Target Completion Date
Action Taken
Sev
erit
y
Occ
urre
nce
Det
ecti
on
Ris
k P
rior
ity
Process/Product: FMEA Date: (original)
FMEA Team: (Revised)
Black Belt: Page: of
Process Actions Results
Item Process Steps
Potential Failure Mode
Potential Effects of Failure
Sev
erit
y
Potential Cause(s) of Failure
Occ
urre
nce
Current Controls
Det
ecti
on
Ris
k P
rior
ity
Recom-mended Action
Responsibility and Target Completion Date
Action Taken
Sev
erit
y
Occ
urre
nce
Det
ecti
on
Ris
k P
rior
ity
0 5 10 15
0
10
20
30
Approval Time
Cyc
le T
ime
0 5 10 15
0
10
20
30
Approval Time
Cyc
le T
ime
4.0 Improve Performance
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0Control
Performance
Objective Main Activities Potential Tools and Techniques
• To identify, evaluate, and select the right improvement solutions. To develop a change management approach to assist the organization in adapting to the changes introduced through solution implementation.
•Response Surface Methods
•Generate Solution Ideas
•Determine Solution Impacts: Benefits
•Evaluate and Select Solutions
•Develop Process Maps & High Level Plan
•Develop and Present Storyboard
•Communicate Solutions to all Stakeholders
Control
ObjectiveMain Activities
Potential Tools and Techniques
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0
ControlPerforman
ce
• To understand the importance of planning and executing against the plan and determine the approach to be taken to assure achievement of the targeted results. To understand how to disseminate lessons learned, identify replication and standardization opportunities/processes, and develop related plans.
•Develop Pilot Plan & Pilot Solution
•Verify Reduction in Root Cause Sigma Improvement Resulted from Solution
• Identify if Additional Solutions are Necessary to Achieve Goal
• Identify and Develop Replication & Standardization Opportunities
• Integrate and Manage Solutions in Daily Work Processes
• Integrate Lessons Learned
• Identify Teams Next Steps & Plans for Remaining Opportunities
Error Modes and Effects Analysis
Error Mode Effect Analysis(EMEA)
Description:
Degree of Effect
Ste
p#
ProcessStep
Error Cause Effect
Fre
qu
en
cy
Sev
eri
ty
Dete
cti
on
To
tal
Occurrence Prevention(Countermeasure)
4.2.1
Assemble alloutboundcontainers instaging area
• Back injuryduring lift
• Foot and toeinjury fromdroppedcont.
• Carry-allnot available
• Liftingguidelinesnot followed
• Backinjuries,lost time,insuranceexpense
0+22 4 3 9
• Purchase two new carry-alls formailroom
• Include topic in new safety film
4.2.2
Determinecorrectpallet size
• Non-standardpallet used
• Vendorpallets kept
• Containerstack overend ofpallet andfall whenbeing lifted
2+24 1 1 6
• Inspect for non-standard pallets andreturn to vendors
4.2.3
Positionempty palletin markedarea ofloading dock
• Full palletsare rotated90° by hand
• Pallet set 90°off whenpositioned -lift truckcan’t access
• Back andhand injuries,lost time,insuranceexpense andrework
2+35 4 1 10
• Update and clarify pallet placementprocedures
• Include topic in new safety film
4.2.4
Stackoutboundcontainers onpallet not toexceed twohigh
• First layernotcompletedbeforestartingsecond layer
• Stackguidelinesnot used
• Containersfall whilebeing lifted
0+11 1 1 3
• Update and clarify loading guidelines
4.2.5
Load pallets invehicle withlift truck andsecure
• Tie downlinesdamage bulkmail whentightened
• Tie downguidelinesnot clear
• Injuredfingers,damagedoutboundmail
0+11 2 1 4
• Update and clarify loading guidelines
Error Modes and Effects Analysis
Sigma Goal (CCR)
Gap
Implemented Solution
CCR
Gap
X
Process Control System
Project Workplan
CCR
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0
ControlPerforman
ce
5.0Control
Performance
1.0 Define
Opportunities
2.0 Measure
Performance
3.0 Analyze
Opportunity
4.0 Improve
Performance
5.0
ControlPerforman
ce
5.0Control
Performance
Process cannot be improved:1. Abort project2. Recharter as Design Project
Six Sigma DMAIC Projects
Fu
lly
Dep
loye
dN
o M
ajor
Gap
sW
ell
Dep
loye
dM
ajor
Gap
sN
oth
ing
•Nothing •Buzz (10+)•Push (5)•Skeptics (50%)•Pilots are Positive (80%)
•Some Momentum•Balance of Push/Pull•Not at Tipping Point
•More Pull Than Push•Internal & External Positioning•Past the Tipping Point
•Thriving•PULL!•Drives the Way We Work•Ubiquitous
Build on Energy
Build on Energy
Room toInject New
Energy
Room toInject New
Energy
“ENERGY & WILL”
DEPLOYMENT
Business Processes are here
Manufacturing Performance is here
50% of all companies attempting to implement Six Sigma failed after the first two years of implementation.
Key Learnings
Sustained Commitment
Long Term Goal – Sustained Commitment & Results
Six Sigma Net
Business Benefit
1 2 3 4Year
Initial LeadershipCommitment
0
C
A
F As many as 50% end up here at “F”
Key factors differentiating
“A” curve from “F” curve Business integration into
“how we work”
Project selection link to business strategies
Project selection link to Customer Value
Ability to change Culture & Leadership Behavior
Full Value-Chain engagement
Ability to track results
Integrating DfLSS
* Chart adapted from Strategic Six Sigma: Best Practices from the Executive Suite by Dick Smith and Jerry Blakeslee
*
Xerox
1. Apathy from senior leadership2. Training not connected to projects3. Projects not connected to strategy4. Projects only focused internally5. Selecting “available” people6. Part time Black Belts7. No financial validation to bottom line8. People not recognized for their
contributions
Reasons Six Sigma Deployments Fail
A Six Sigma Deployment Cannot Be Done Without Consultants
• Training Materials• Testing Materials• Professional Educators• Six Sigma Project Management Expertise
(Master Black Belts)• Credibility With Top Management• Can “Jump Start” The Deployment
If properly driven by Top Management, Six Sigma can have a dramatic impact
on a company’s culture and how it aligns itself with its customers
Thank Thank You!!You!!