Six Sigma Overview by z9Oo6YTo


									Six Sigma Green Belt Course

     Six Sigma Overview
About This Module…

Six Sigma Overview

    This module is an overview of Six Sigma’s Define phase which
    applies primarily to Executive training.

                     Six Sigma, A Quest for Process Perfection
                          Meet Goals and Attack Variation
What We Will Learn…

Six Sigma Overview

    1. The many facets of Six Sigma.

    2. The driving need for customer satisfaction and how customer
       satisfaction requires process improvement.

    3. Roles, responsibilities and time required of a Six Sigma Team.

    4. Technologies and curriculum of Six Sigma methodology

    5. Results of other companies that are implementing Six Sigma.
Process Perfection through Defect Reduction

                                “We committed to Six Sigma 100% from the
                                  beginning, made no exceptions and insisted
                                  that the result would be a fundamental and
                                  permanent change in the way we operate
                                  the company.”

                                “… Six Sigma, which is now being used
                                  within all business lines across the company
                                  to measure and improve the results we
                                  produce for customers and shareholders.”
                                          Bank of America, Annual Report 2003

    “Broad application of Six Sigma will allow us realize margin
    benefits through greater efficiency and through increases in
    revenues. Its application to our business will be a major pillar of
    our strategy going forward.”
    -Douglas A. Warner III, Chairman, JP MorganChase
What is Six Sigma?
Key Focus of Six Sigma - Chain of Causation

      Our survival is dependent upon growing the business.
      Our business growth is largely determined by customer satisfaction.
      Customer Satisfaction is governed by quality, price and delivery.
      Quality, price and delivery are controlled by process capability.
      Our process capability is greatly limited by variation.
      Process variation leads to an increase in defects, cost and cycle time.
      To eliminate variation, we must apply the right knowledge.
      In order to apply the right knowledge, we must first acquire it.
      To acquire new knowledge means that we must have the will to survive.

                                                      6s     Dr. Mikel J. Harry
                                                             Six Sigma Academy
              A Little Six Sigma History ...

                                   Design              Motorola
 Developedby Bill Smith,        1985 - 1992           Texas Instruments
 Motorola Quality                                      Asea Brown Boveri
                                1993-1994              Allied Signal
 Implementation began            Results              General Electric
 at Motorola in 1987             1994-1996
                                                       Nokia Mobile Phones
 Helped   Motorola to win                             Bombardier, Siebe, ...
 the first Baldrige Award    Competitive Awareness
                                 1996-1997             Lockheed Martin, Sony,
 in 1988
                                                       Crane, Polaroid, Avery
                               New Technology
 Majorcompanies                                       Dennison, Shimano, JP
 throughout the world                                  Morgan, City of Fort
 have adopted                                          Wayne
 Six Sigma.
                                  1999-2005             Bank of America,
                                                        American Express
                                     Competitive advantage gained via 6s education!
What is Six Sigma?
Six Sigma, a Strategy and a Measurement of Strategies

   Six Sigma is an overall strategy to accelerate improvements in
    processes and services (create breakthrough).

    Six Sigma is a measurement of how effective strategies are in
    eliminating defects and variations from processes and services to
    increase yield.

                    =              +              +            + ...

            Y        =    F(x1,          x2,            x3       …)

Understand and control the x’s, and you’ll never have to ask “Y”.
Variation is the Enemy

    Sigma refers to standard deviation, a measure of variation.

    Six Sigma refers to a process having six standard deviations (short
     term) between the target and the nearest specification limit.

    Six Sigma quality will minimize lost opportunity.

    Lower           Target                   Upper
     Spec                                    Spec
                                                        Improve yields
                                                        Eliminate defects
                                                        Reduce the cost of poor
                                                         quality and
              Lower     Process    Upper                Reduce cycle time
              Control    Center    Control
                            6 Standard Deviations           ...for each process.
                                  6 Sigma
Six Sigma Defines Problems Statistically

                                                Focus on Y or X?

                         Y= f (X)
                        Y                 X1 . . . XN
                Dependent             Independent
                Output                Input-Process
                Effect                Cause
                Symptom               Problem
                Monitor               Control

       The output is used to evaluate the process.

   If our processes to produce X is so good, why are we constantly inspecting Y?
In Summary...

 “Six Sigma is a philosophy of doing
 business (providing any product or
 service) ...

 … encompassing the methodologies
 of defect prevention rather than
 detection ...

 … through the use of statistical tools
 that can vary from Pareto charts to
 Design of Experiments (DOE)”

                                 Bill Ross

     Six Sigma meshes with other improvement activities.
Sources of Variation
                        Forms         2
                                 1           3




             Material                $                Process
                                                     Capability       2

     2                                                            3

                        1         System         3
Supplier and Customer Satisfaction Relationship

   Internal Metrics

     Cycle Time                       Delivery

        Cost                           Price

       Defects                        Quality

                                  External Metrics
Customer Satisfaction is a Business Issue

Robust Designs
  Customer Requirements
  Process Capabilities
  Material Capabilities

                    Predictable Factory

                           Customer Satisfaction
                              High Quality
                              Superior Reliability
                              Consistent Performance
                              On-time Delivery
                              Lower Costs

                                                        Business Results
Customer Satisfaction at the Lowest Possible Cost

   Defeat competition by understanding and then exceeding
    customer expectations.

   Set stretch goals - target Six Sigma standards

   Constantly measure key metrics to detect improvement:

                   Internal Metrics
     Delivery         Cycle Time      simplify processes to reduce cycle time
       Price                          reduce cost by increasing efficiency and
                                      eliminating non value-added steps
      Quality           Defects       eliminate variation
External Metrics

Six Sigma goals are directly and quantifiably connected to business goals.
Customer Needs Translated into “Critical To” (CT)
Customer Focus

    Y = f (X1, X2, … Xn)
                    Translation of customer needs into…
                    process, service or deliverable requirements in terms of…
                    quality, delivery and cost.
                           Characteristics of the CT Matrix are:

                   Y               CTQ
                                               Critical to Quality
                                               Critical to Delivery
                                               Critical to Cost

Breakdown of     • Area where projects are identified by the relationship between
the processes      service or deliverable requirements and processes.
  required to
 produce the     • Area where the process parameters that affect the requirements
  service or       are later identified (X , X , … X )
  deliverable.                          1    2        n

                 • Area where leverage processes are identified.
Customer Focus

CTQ, CTD, CTC and Critical to Processes (CTP)
CTQ Defect Opportunity                 CTP Control Opportunity
                A CTQ, CTD or           One of the “vital few” CTP                        Leverage Principle
               CTC requirement          variables which can leverage Y.

                                 Y = f(X)                                                                   Trivial
                                                                                           Vital            Many
                                  Example                                                  Few

                                                                                               Pareto Analysis of
                                                                                                Process Inputs
    LSL                USL                      LSL                USL                    84

           Product                                     Process
          Capability                                  Capability


                             Y                                           X

                                                                                                        3     2       1
     Probability of                                Probability of
                                                                                          A        B    C     D       E
        Defects                             Nonconformance to Standard
Developing a CT Matrix

                                                                                                           System A       System B       System C

                                                                    Sub-System 1                                       Sub-System 2        Sub-System 3

                                                                                                         Element A       Element B        Element C

                                                                                                        Characteristic 1 Characteristic 2 Characteristic 3

                                                                    Characteristic 2 Characteristic 3
                                 Operation 2 Operation 3
                     Process C

                                                           Tool C
                     Process B

                                                           Tool B
                     Process A

                                                                    Characteristic 1
                                     Operation 1

                                                           Tool A

                                                                                        Y = f (X)                                             = Leverage Point
CTS, CTQ, CTP Relationships

                                                                    CTY Tree
 Critical to Satisfaction (CTS)

 Business Success

  Critical to Quality (CTQ)
                              CTX Tree (Process Tree)
  Customer Satisfaction

  Critical to Process (CTP)

  Product Quality

                                                              The CT Matrix Structure
CTQ, CTD and CTC Requirements

                                                                                         Process Tree Subsystem Level

                                                                                                             All details properly

                                                                                                                                    properly identified

                                                                                                                                                                            Process correctly
                                                                                          details and assy
                                                                                          Complete list of

                                                                                                                                                          Delivery as per
                                                                                                                                    All assemblies

Example of CTS characteristics defined as


critical requirements: CTQ, CTD, CTC
                                                  Bid Preparation
                                                    • Bid Preparation
                                                  Program or Contract Start-up
                   Process Tree Subsystem Level
                                                    • Program or contract start-up
                                                    • Development of process logistics
                                                  Technical Data Preparation
                                                   • What document and how definition
                                                   • Process logistics implementation
                                                  Production of 1st and Subs
                                                    • Tools Management
                                                    • Supplying external services and
                                                    • Supplying data
                                                    • Process elements
                                                    • Application steps
                                                    • Process sub-components
                                                    • Customer order management
                                                    • Management of customer
                                                      process sequence changes
                                                  Testing and Commissioning
                                                   • Testing and delivery of the units
                                                   • Change management
                                                   • Pilot results
                                                   • Scale-up
                                                   • Process improvement
                                                   • Nonconformance management
CTQ Matrix Example

                                                                                                                    Message/Package Delivery Time

                                                                                                                                                                                                                                                                    Distance – Check-in to Elevators
                                                                                                                                                                                                                                  Distance – Entrance to Check-in
                                              Time to Receive Room Key

                                                                                                                                                                                                                                                                                                       Length of Check-in Desk
                                                                         Correct Room Attributes

                                                                                                                                                                                                           Bellhop Availability

                                                                                                                                                                                                                                                                                                                                                    Attractive Uniforms
                                                                                                                                                    Message Accuracy

                                                                                                                                                                                                                                                                                                                                 Number of Clerks
                                                                                                                                                                                         Clerk Knowledge
                                                                                                   Clerk Demeanor

                                                                                                                                                                       Clerk Authority
   Primary Want        Secondary Want

                      Get My Room Key
   The “Right” Room
                      Get the Room I
                      Clerk Should Be
       Check-In       Provide Packages &
      Experience      Messages Upon Arrival
                      Resolve Problems
                      Provide Directions
                      & Advice - Local
                      Provide Information
                      - Hotel Services

                      Help With Luggage
      My “Stuff”
                      Short Distance to
                      Carry Luggage
Difference Between Average and Best-in-Class
Customer Focus
      Yield                PPMO                   COPQ                Sigma
  99.9997%                       3.4               <10%                    6        World Class Benchmarks

   99.976%                      233            10-15%                      5

       99.4%                 6,210             15-20%                      4                 Industry Average

           93%            66,807               20-30%                      3

           65%          308,537                30-40%                      2                     Non Competitive

           50%          500,000                    >40%                    1
   Source: Journal for Quality and Participation, Strategy and Planning Analysis
                                                                                   PPM       The Basic Objective

A focus on TDPU reduces cycle time/unit, WIP,                                        100
inventory carrying costs, delivered defects,                                          10
early life failure rate and defect analysis and                                              3        4       5       6

repair costs/unit                                                                            Sigma Scale of Measure
Difference Between Average and Best-in-Class
Customer Focus

           4s                          5s                            6s
     99.4% error free           99.977% error free          99.9997% error free

     Expect cold showers 54 hours each               Cold showers are reduced to
4s                                            6s
     year!                                           less than 2 minutes a year!

     Approximately 6,210 transactions out            Only three transactions in every
4s                                            6s
     of every million would be out of spec!          million would be out of spec!

     Lights would be out almost one hour             Light outage would be reduced
4s                                            6s
     per week!                                       to two seconds a week!

                                                         Assumes one opportunity
How to Scale the Five Sigma Wall

  4s      5s      Requires 27-fold performance improvement!

  5s        6s    Requires another 69-fold performance improvement!

       3s        Design for Six Sigma                      6s
 Organizational Roles and Responsibilities

 Six Sigma Roles

                         Executives                          Project Team
        Own  vision, direction,                                         Part-time
         integration, results                                                 Project-specific
        Lead change

       Champions                                                                  Green Belts
                                         All employees

     Project owner                                                            Part-time
                                        Understand vision
 Implement solutions                                                     Help   Black Belts
                                        Apply concepts
     Black Belt managers

                       Master Black
                                                             Black Belts

                    Fulltime                          Devote 50% - 100% of time to Black Belt activities
                    Train and coach                   Facilitate and practice problem solving
                    Black and Green Belts             Train and coach Green Belts and project teams
                    Statistical problem solving experts
Executives Supply Vision and Objectives

   Identify, rank and communicate
                                              Executive Training
    corporate values and overall             SixSigma Business Strategy
    strategic objectives and examine         Defining Values
    ways to maximize customer                Business Measurement
    satisfaction.                            Business Benchmarking
   Identify consistent business             Implementation Strategy
    metrics. Establish a business            Lessons Learned
   Choose high-potential individuals       Support Champions and Black
    to become Champions and BB’s.            Belts by consistently removing
                                             obstacles to project
   Participate in/support training.         completion.

Six Sigma is deployed by 6s BB’s on a project-by-project basis. Buy-in
from the top down is critical. Executives establish the corporate
commitment to achieve 6s process performance.
Champions Direct Overall Objectives

    Champions lead, plan, facilitate and implement Six Sigma. They
    direct the company’s overall strategic SS deployment objectives.

   Identify critical projects and              Champion Training
                                         SixSigma Strategy
                                         Defining Values
   Develop Six Sigma deployment
                                         Process Characterization & Capability
                                         Basic Statistics
                                         Graphical Analysis
   Authorization to start approvals.
                                         Deploying Six Sigma
                                         Financial Management
   Consistent project reviews.
                                         Project Guidelines and Selection

   Select and mentor Black Belts and
    consistently remove obstacles to
    project completion.
Role of a Six Sigma Black Belt
Six Sigma Roles
         In addition to using Six Sigma tools to maximize critical
         business processes, a Black Belt:

                  Mentors   - a network of supporting individuals
                  Teaches   - usage of tools and strategies
                  Coaches - one-on-one
                  Shares    - new strategies at Symposia, etc.
                  Discovers - new applications for Six Sigma strategies
                  Identifies - new business opportunities
                  Sells     - Six Sigma strategies throughout
                              the organization

           To assure business success, a Black Belt must devote AT
           LEAST 50% of his / her time to Black Belt activities.
Keys to Success

               Highly visible top-down management commitment to
               the initiatives.

          6s   A measurement system (metrics) to track the

          6s   Internal and external benchmarking of products,
               services and processes.

          6s   Setting stretch goals (10x, 100x improvement, etc.).

               Success stories showing how the tools of
               improvement can be applied and the results which
               can be achieved. (Networking)

          6s   Champions and Black Belts promoting initiatives and
               providing the necessary planning, teaching, coaching
               and consulting to all levels of the organization.
Typical Results and Possible Time Allocation for
6s Activities
Six Sigma Roles
The typical Black Belt improvement project requires 4-6 months for
completion and yields an average return of $183,000.

Black Belts can conduct 3-4 projects/annually.

The annual benefit per Black Belt exceeds $500K.
     Percentage of Time Allocated

                                          Executives    Project  Line      Green   Champions   BBs   Master BBs
                                                         Team Management   Belts
Characterization and Optimization
                                                                                       Phase 1:
Breakthrough Technologies for Success                                                    Define

                                                                                        Phase 2:
                                                                                        Phase 3:
                                                                                        Phase 4:
                                                                                        Phase 5:
     Optimization                                                                         Control
               Region of Success
                                                   PPM            The Basic Objective
                    = Current Level                1000000



             Characterization   X                    100     Average
               Commitment                                    Company

                                                      1       3         4         5         6

                                                              Sigma Scale of Measure
Application Roadmap
           1. Create Problem Statement          Measure       Capability OK?
 Define    2. Select CTQ Characteristic
           3. Define Performance Standards         Y                   N

           4. Understand Process and Validate
Measure       Measurement System                                                 Redesign

           5. Determine Process Capability
           6. Finalize Performance Objectives

           7. Identify Variation Sources
 Analyze                                                       Modify Design?       Y
           8. Screen Potential Causes
            9. Determine Y=f (x)
           10. Establish Operating Tolerances

           11. Confirm Results and Validate

           12. Validate Process Capability                N     Capability OK?
Control       and Measurement System
           13. Implement Process Controls                             Y
           14. Complete Project Documentation
Measurement is the Key to Harvesting the
Benefits of Six Sigma

        Design for Six Sigma

                                                               Process Entitlement

        Process Characterization
        and Optimization
    - - - - - - - - - - - - - - - - - - - - - - - -- - - - -

       Basic Tools
                                                               What is your baseline?

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

        Logic and Intuition
Black Belts at Work
Breakthrough Technologies for Success
  Select Key Process
  Create Process Tree
  Define Performance Variables
  Create Process Map
  Measure Performance Variables
  Establish Performance Capability
  Select Performance Variable
  Benchmark Performance Metric
  Find Best-in-Class Performance

  Conduct Gap Analysis
  Identify Success Factors
  Define Performance Goal

  Select Performance Variable                 Select Causal Variable
  Diagnose Variable Performance               Define Control System
  Propose Causal Variables                    Validate Control System
  Confirm Causal Variables                    Implement Control System
  Establish Operating Limits
  Verify Performance Improvement
                                      I   C    Audit Control System
                                               Monitor Performance Metrics
 Six Sigma Technologies

 Breakthrough Technologies for Success
           Customer     Competitive      Process         Technology     Organization     Business       Six Sigma
            Focus        Capability     Capability        Capability     Capability       Metrics     Fundamentals
           Nature of    Opportunities     CTX            Process         Process        Six Sigma      Six Sigma
           Variables     For Defect       Tree           Mapping        Baselines        Projects     Deployment

           Scales of       Data         Measurement Statistical            Static       Dynamic         Special
Measure                  Collection        Error   Distributions         Statistics     Statistics
           Measure                                                                                      Topics

                                                                                       Continuous      Discrete
           Six Sigma     Process         Diagnostic      Simulation      Statistical
Analyze                                                                                 Decision       Decision
           Statistics    Metrics           Tools           Tools        Hypotheses
                                                                                         Tools          Tools

          Experiment       Robust                                          Risk            DFSS          Special
                                         Emperical        Statistical
Improve     Design         Design                                         Analysis       Principles      Topics
                                         Modeling         Tolerances
             Tools          Tools                                          Tools

                         Continuous                        Static        Dynamic       Process and
          Pre-control               Discrete SPC                                                         Special
Control                     SPC                           Control        Control         Quality
             Tools                     Tools                                                             Topics
                           Tools                          Systems        Systems          Audits

                                                     = Executive and/or Champion              Black = Core
                                                                                               Blue = Advanced
                                                      = Black Belt
                                                                                       Black Italics = Management
Technologies for Success
Breakthrough Technologies for Success
                    Six Sigma Breakthrough Technology Tools
                                     Define       Measure   Analyze   Improve   Control

   Analysis of Means                                          X         X
   ANOVA – N-way                                              X         X
   ANOVA-one-way                                    X         X         X
   ANOVA-two-way random                             X         X         X
   Bar Chart                                                  X         X
   Benchmark – chart             X            X               X         X
   Benchmark – sigma             X            X               X         X
   Box Plot                                                   X         X
                                 X            X
    Process Maps                                              X
    Cause & Effect Diagram                                    X
    Gage R&R                                                            X
                                                              X         X         X
    Capability Analysis                       X               X                   X
    FMEA                                                      X         X         X
    SPC                                             X
    DOE                                                                           X
    Control Plans                                                                 X

    These tools allow teams to focus on problems, not dwell on personalities!
Applying PTAR to Black Belt Development
Breakthrough Technologies for Success
              Define           Measure           Analyze        Improve        Control

           Management       Management     Management        Management     Management
P lan      Coordination     Coordination   Coordination      Coordination   Coordination
             Meeting          Meeting        Meeting           Meeting        Meeting

            (2-3 days)
T rain
                              Measure            Analyze       Improve         Control
                               training           training      training       training
            (1 week)
                              (1 week)           (1 week)      (1 week)       (1 week)

                              Measure        Analyze           Improve        Control
 A pply                      application    application       application    application
                             (3 weeks)      (3 weeks)         (3 weeks)      (3 weeks)

 R eview                  Four standard                       Realization Review after
                          end-of-phase reviews                   completion of project
Black Belt Curriculum Overview by Week
          Understanding the basic concepts of Six Sigma

          Developing the language of Six Sigma and statistics
          How to compute and apply basic statistics
          How to establish and benchmark process capability

          Understanding the theory of sampling and hypothesis testing
          How to apply key statistical tools for testing hypotheses

          Understanding the elements of successful application planning
          How to apply/manage the breakthrough strategy
          How to identify and leverage dominant sources of variation
          How to establish realistic performance tolerances

          The basic principles of experimentation
          How to design and execute multi-vari experiments

     3    How to interpret and communicate the results of an experiment
          How to plan/execute a variable search study
          How to manage a Six Sigma project
          How to manage change in project implementation

          Understanding the basics of process control
          How to construct, use and maintain charts for variable and attribute data
         How to plan/implement process control systems
Green Belt and Awareness Training for the
Company Include…

                  Green Belts
                 Understanding Six Sigma
                 Process Mapping
                 FMEA
                 MSE
                 SPC
                 Higher level defect reduction

              Company-Wide Awareness
                 Understanding Six Sigma
                 Seven Basic Tools
                 Process Mapping
                 FMEA
                 Data Collecting
                 Some Defect Reduction
Results of 600 Project/Processes

Six Sigma Success Stories


                                                             Average +68%

                                                                                          Defect-Free Yield (%)
Defects PPM

              200,000                                                               75%

                        Auto - Avg. 168,000 ppm
                        Aero - Avg. 200,000 ppm
                        EMS - Avg. 78% Yield

                        January                   February     March        April

                                   The entire organization succeeds!
What We Have Learned

Six Sigma Overview

     1. The many facets of Six Sigma.

     2. The driving need for customer satisfaction and how customer
        satisfaction requires process improvement.

     3. Roles, responsibilities and time required of a Six Sigma Team.

     4. Technologies and curriculum of the Six Sigma Breakthrough

     5. Results of other companies striving for Six Sigma.

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