Six Sigma Overview 23Sep11

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Six Sigma Overview 23Sep11 Powered By Docstoc

  Kush K. Shah

  Chair, ASQ Automotive Division
                             What is Six Sigma?
• Sigma is a statistical measure of variability in a given process
• Six Sigma is a performance target. Six Sigma means that the
  average opportunity for a defect is only 3.4 defects per million
  opportunities (assumes 1.5 sigma drift in process)
                                                                       Cp = 1.0
            + 3 Sigma                                               PPM Outside of
            Capability                                               Specification   Cpk =1.0
                                                                        = 2700

       -6      -5   -4     -3    -2    -1       0   1       2   3      4    5   6

                                                                       Cp = 1.5
        + 4.5 Sigma                                                 PPM Outside of
         Capability                                                  Specification
                                                                        = 6.8

                    -6      -4        -2        0       2       4      6

                                                                       Cp = 2.0
            + 6 Sigma                                               PPM Outside of
            Capability                                               Specification
                                                                                     Cpk =2.0
                                                                       = 0.002
                            -6   -4        -2   0   2       4   6
                        Lower                                 Upper
                     Specification                          Specification
                      Six Sigma Impact

With Three Sigma Quality,        With Six Sigma Quality, you
you get:                         get:
   At least 54,000 wrong drug       One wrong drug prescription
   prescriptions per year.          every 25 yrs.

   Unsafe drinking water about      Unsafe drinking water one
   two hours per month.             second every 16 years.

   Five short or long landings      One short or long landing at
   at O’Hare International          all the airports in the U.S.
   Airport everyday                 every ten years.
                   Why Six Sigma

• Not meeting customer requirements … or there are serious
  gaps in service levels.
• Existing improvement efforts have not delivered the
  financial benefits promised.
• Productivity goals and financial results are not meeting
  organizational targets.
• New product development and innovation are lagging
  customer requirements or have stalled.
• Core processes are still out of alignment with market
                   Where does Six Sigma Work?

        Service Industries
        (Health Care, Government,
        Retail, Software etc.)


Transactional Processes                  Manufacturing Industries
(Billing, Customer Support etc.)
                                         (Automotive, Aerospace etc.)
           Benefits of Six Sigma Program
• Material savings
• Labor savings
• Decreased work-in-progress
• Improved capacity and output
• Improved customer satisfaction and
  process flow
• Improved inventory turns
• Increased productivity
• Reduced cycle times
                   Six Sigma - History
• 1980s - Motorola - developed Six Sigma as a measurement
  of mistakes per one million operations.

• Early 1990s - AlliedSignal and Texas Instruments began
  benchmarking each other’s Six Sigma initiatives

• In the mid-1990s, Jack Welch, GE CEO, became very
  attracted to the systematic and statistical methods Six Sigma
  employs. GE said that it intended to reach Six Sigma quality
  by the end of the year 2000

• Since 2000, Six Sigma has been implemented at thousands
  of organizations
                Six Sigma – Key Metrics
• Primary metric is Defects per Unit (DPU). DPU drives
  plantwide improvement
       DPU = Total # of defects / Total # of units produced

• Defects per Opportunity (DPO)
    DPO = DPU / # of opportunities for error in one unit

• Defects per Million Opportunities (DPMO). DPMO allows
  for comparison of dissimilar products
       DPMO = (DPO * 1,000,000) / Total opportunities for
       error in one unit

• Sigma level allows for benchmarking within and across
        Roles and Responsibilities - Champion
•   Promotes a shared vision
•   Approves projects and team members
•   Mentors projects
•   Provides resources
•   Removes barriers
•   Responsible for Success
•   Evaluates improvement impact
•   Assures recognition
•   Institutionalize Changes
     Roles and Responsibilities of Master Black Belt

•   Manages the Six Sigma
    implementation                        f (x  
                                                      2
                                                          e( 
                                                           - x -m

•   Develops and delivers Black Belt                           N
    training                                    m = S xi / N
•   Knowledgeable in advanced Six       2 = S (xi - m )2 / N
    Sigma techniques
•   Mentors Six Sigma Black Belts
•   Evaluates projects
•   Leads high leverage projects
•   Communicates success stories to
    Roles and Responsibilities – Six Sigma Black Belt
•    Leads teams
•    Lead the team reviews
•    Responsible for applying DMAIC process
•    Prioritizes key activities
•    Delivers Green Belt training
•    Sponsors and Mentors Green Belts
•    Works full-time on Six Sigma projects

    Roles and Responsibilities – Six Sigma Green Belt
• Leads projects within normal scope of job
• Responsible for applying DMAIC process
• Works part-time on Six Sigma projects
     Roles and Responsibilities - Team Members
•   Working on the project is top priority for team members
•   Support discussions, observations, and conclusions
•   Knowledge of the process
•   Request specific support and identify roadblocks

Cross-Functional Team (6-10 People)
   – Team Leader – Six Sigma Black Belt
   – Engineering - Product and Process Engineers
   – Manufacturing - supervisor of the area, operator, job setter
    Training and Certification – Six Sigma Green Belt
•   Usually one week of Six Sigma training
•   Team member in one Six Sigma project
•   ASQ Green Belt Certification Exam
•   ASQ Greater Detroit Chapter offers Refresher Class

    Training and Certification – Six Sigma Black Belt
•   Usually one month of Six Sigma training over four months
•   Team leader in one Six Sigma project
•   Education: Bachelor’s Degree
•   At least three years of experience
•   ASQ Black Belt Certification Exam
•   ASQ Greater Detroit Chapter offers Refresher Class
  Caution – Six Sigma Green Belt / Black Belt Training

 • Get training from reputed organizations – too many companies
   offering training and charging $1,000 - $30,000
 • ASQ is one of the few organizations offering nationally
   recognized Body of Knowledge and Green Belt and Black Belt

Training and Certification – Six Sigma Master Black Belt

 •   Recruited from the ranks of Black Belt
 •   Selection process is less formal and less well defined
 •   Selection criteria varies for each organization
 •   Expert in Advanced Statistical Tools
 •   Experience in completing many Six Sigma projects
            Six Sigma Project Phases

5 Project Phases:
                              Define Opportunities
• Define          D              Measure Performance
• Measure         M
                                     Analyze Opportunity
• Analyze         A
                                         Improve Performance
• Improve         I
                                             Control Performance
• Control         C

       A successful project may use any number of the six
       sigma tools, but most importantly it will have gone
                 through each of the 5 phases !!
                 DMAIC – Define Phase
                 Types of Opportunities

                            Sweet Fruit – Six Sigma Advanced Tools

                                 Bulk of Fruit – Six Sigma Basic Tools

                                 Low Hanging Fruit – Seven Basic Tools

Ground Fruit   Logic Knowledge
                 DMAIC – Define Phase
Key Steps
• Define Customer Needs
• Define Strategic Goals
• Define Defects and Opportunities
• Identify Master Black Belt & Champion
• Select the Team Members
• Determine Project Scope
• Define Goals/Deliverables
• Develop project tracking system
                DMAIC – Define Phase
• Pareto charts
• Process Maps – SIPOC
• Benchmarking
• Project Charter
• CTQ Tree
• Kano Model of Quality
                 Six Sigma Project Charter
• Project Business Case:
   – Customer Driven Projects: Complaints or opportunities
   – Business Driven Projects: Efficiency or profitability
• Project Goals:
   – Problem Statement - (state the problem, include effect on
     cost, cycle time and/or quality)
   – Goal Statement - (state the project goal, focus on reducing
     or eliminating the stated problem)
• Project Scope:
   – Process Scope - (flow chart of process activities showing
     start and end point)
   – Organization Scope - (groups that will be involved with or
     affected by the project)
      Six Sigma Project Charter (Continued)
• Project Schedule:
   – Layout all key deliverables and milestones which have to
     be approved by sponsor
• Project Budget:
• Project Team:
   – Core team members
   – Support members - Finance, Quality, Information System
   – Establish team member roles
• Current Process Flow:
   – SIOPC (supplier, input, process, output, customer)

• Current Performance (baseline)
                DMAIC – Measure Phase
Key Steps
• Gather Process Data
• Identify Key Measures
• Validate Measurement System
• Develop Data Collection Plan
• Establish Process Capability
• Graphical & Statistical Representation
• Implement Containment Actions
                            DMAIC – Measure Phase
• Gage R&R
• Descriptive Statistics
• Histogram
• Scatter Plot
• Control Charts

                                     Process Capability Sixpack for: Output

                                            X bar and R Chart                                    Capabilit y Hist ogram
                                                                       UCL=81. 19

                                                                       M U=72. 81

                       65                                              LCL=64. 42
                                                                                                60               80                 100
                      Subgr 0          10                    20   30
                                                                                                         Normal Prob Plot
                       30                                              UCL=30. 74

                                                                       R=14. 54

                        0                                              LCL=0. 000
                                                                                                60               80                 100

                                        Last 25 Subgroups                                                 Capabilit y Plot
                                                                                                         Pr ocess Toler ance
                       90                                                                       54. 0543                     91. 5591

                       80                                                            Cp: 1.60               I        I   I

                                                                                    CPU: 1.45        I           I            I
                                                                                    CPL: 1.75        40                           100
                       60                                                           Cpk: 1.45             Specif icat ions
                                10                      20        30                                       St Dev: 6.2508
                                            Subgr oup Number
                 DMAIC – Analyze Phase

Key Steps
• Identify gaps between current performance and the goal
• Generate list of possible causes (sources of variation)
• Prioritize list of 'vital few' causes (key sources of variation).
• Verify and quantify the root causes of variation.
                                     DMAIC – Analyze Phase
• Cause & Effect Diagram
• Multi-Vari Charts
• Hypothesis Testing
• Design of Experiment

                        A Statistical Problem
         Target                                                 Target
                                                                                Hypotheses of
                            Is the                                                 Means

                            study of
                                                                               Ho: mo = m1
   LSL            USL                                     LSL            USL
                                                                               H1: mo > m1
                                                                               H2: mo < m1
                                                                               Ho: o = 1
                   Center Process             Reduce Spread

                                     Target                                    H1: o > 1
                                                                               H2: o < 1
                                                                                Hypotheses of
                               LSL             USL
                     DMAIC – Improve Phase
Key Steps
• Generate possible solutions
• Conduct Cost / Benefit Analysis
• Select the Best Solution Plan
• Develop Implementation Plan

                              Failure               Total
                               Costs                Cost

                         Appraisal and Prevention

                                   Defect Level             0
                    DMAIC – Improve Phase
• Cost / Benefit Analysis                                  Low Effort High Effort

• Project Management Tools                   Low Impact

• Impact / Effort Matrix                     High Impact
• Robust Design
• Tolerancing

           Exponential loss as the
         characteristic departs from
             the "target" value

   LSL                 T               USL
               DMAIC – Control Phase

Key Steps
• Control plan in place for
  sustaining improvements (short
  and long-term).
• New process steps, standards,
  and documentation are ingrained
  into normal operations.
• Knowledge gained on process is
  shared and institutionalized.
• Response plans established,
  understood, and deployed.
               DMAIC – Control Phase
• Control Plan
• Mistake-proofing
• Long-term Capability Studies
         Six Sigma – Reward and Recognition
Evaluation Criteria:
• Impact on Company Goals
• Timeliness in Achieving Objectives
• Completeness of Documentation
• Project Complexity
• Teamwork

Types of Reward and Recognition:
• Company News Article
• Leadership Recognition at Companywide Meeting
• Special Assignment Opportunity
• Financial – Pay Increase / Bonus
• Tangible – Extra Vacation / Trip / Dinner
What Differentiates Six Sigma Methods from TQM?
• Hard tie to business strategy and business results
• Required commitment of senior management up front and
  continuously through years of implementation
• Extensive focus on continuous definition of customer and
  market requirements
• Each project delivers bottom line results in a relatively short
  time – on an average less than six months
• Rigorous methods based on measurement and analysis
• All employees trained in Six Sigma to perform at least at Six
  Sigma Green Belt level
• Full time Six Sigma team leaders (Black Belts)
• Integration of Six Sigma thinking into the business
  infrastructure through regular project reviews by senior leaders,
  incentives, and rewards
           Evolution of a Six Sigma Program

Stage I   APPREHENSION   • Program of the Month
                         • Sounds Too Easy
                         • Prove It to Me
Stage II CAUTION         • Won’t Work on Everything
                         • Let’s Try This on Some Easy Projects
                         • We’ll Do This Part Time
Stage III REALIZATION    • It Works!
                         • Fix All the Problems

Stage IV EXECUTION       • This Process Is Powerful
                         • Focus on Highest Priority Projects
                         • Develop a Training Plan

Stage V GROWTH           • Maintain Discipline
                         • Complete Projects Faster
                         • Share Clever Techniques
      The Grim Reality About Change...

More than 70% of all
change initiatives FAIL
to achieve
desired results in time
to make a difference.
            Where Are You?


Six Sigma
Critical Elements for a Successful
   Six Sigma Implementation


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