Six Sigma Introduction-Revised

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					What is Quality?
What is Sigma?

•   Sigma is a Greek Symbol which represents

    degree of variation in a process

•   It is also termed as standard deviation

•   How close are you in meeting your target
Goals of Six Sigma

                     Defects Reduction



                “Cost Of Quality” Improves



              Improved Customer Satisfaction



                       Higher Profits
Definitions

 A measurement scale that compares a process output with customer

  requirements

 In statistical terms, “reaching Six Sigma” means that your process or

  product will perform with almost no defects (3.4 defects for every million

  activities)
History of Six Sigma

• Six Sigma was introduced by a Motorola engineer Bill Smith

• Motorola started experimenting problem solving through statistical

  analysis in late 1970s

• Motorola officially launched Six Sigma program in 1987

• Jack Welch launched Six Sigma at GE in 1996
Six-Sigma Metrics

 Defect – any mistake or error that is passed on to a customer

 Defects per unit (DPU) is the average number of defects discovered in

  produced units

 Defects per million opportunities (DPMO) = Number of defects in per

  million opportunity

 Defective – a product or service that is unacceptable to a customer due to

  one or more defects
Levels of sigma performance

  Sigma     % Good        % Bad    DPMO
   1Ơ        30.9%        69.1%    691,462
   2Ơ        69.1%        30.9%    308,538
   3Ơ        93.32%       6.7%     66,807
   4Ơ       99.379%       0.62%     6,210
   5Ơ       99.977%      0.023%     233
   6Ơ       99.9997%    0.00034%     3.4
DPMO Calculation
In order to calculate the DPMO, three distinct pieces of information are required:



 Number of units produced

 Number of defect opportunities per unit (inspection items in a unit)

 Number of defects



DPMO = (Number of defects/ Total number of opportunities) x 1,000,000
DPMO - Example
A manufacturer of computer hard drives wants to measure their performance.
Over a given period of time, the manufacturer creates 83,934 hard drives. The
manufacturer performs 8 individual checks to test quality of the drives. During
testing 3,432 defects are recorded:



 Defects                                 3432

 Total units produced                    83934

 Defect opportunity per unit             8

 DPMO = 3432x1000000/ (8x83934)          5111.159

 Six Sigma Value                         4.1
Different Faces of Problem Solving
      PDCA               7 STEPS            Six Sigma

                         Charter             Define

      Plan           Data Collection        Measure

                       Root cause           Analyze

                  Solution Planning and
       Do
                     Implementation
                                            Improve
      Check      Confirm Solution Working

                     Standardization
       Act                                  Control
                    Reflect Next Steps
A 6 Sigma Process
           Lower Specification Limit                     Upper Specification Limit
                                       Customer target




0.00017%                                                                     0.00017%
1.7 ppm                                                                      1.7 ppm



                             6s                      6s
                         = 99.9997% of data inside the limits (Cp = 2)
     0.00034% of points will be outside of the specification limits i.e., defects
     (= 3.4 parts per million out of spec.)
6 Sigma Roles

 Green Belt
  The role of the Green Belt is to bring the new concepts and tools of
  Six Sigma right to the day-to-day activities of the business.

 Black Belt
  The Black Belt is the full-time person dedicated to tackling critical
  change opportunities and driving them.

 Master Black Belt
  Serves as a coach and mentor or consultant to Black Belts working
  on a variety of projects.
6 Sigma Methods

The methodologies, composed of five phases each, bear the
acronyms DMAIC and DMADV

 DMAIC is used for projects aimed at improving an existing
  business process.
       Define, Measure, Analyze, Improve & Control

 DMADV is used for projects aimed at creating new product or
  process designs.
       Define, Measure, Analyze, Design & Verify
DMAIC
Define: Define the problem, the process, and the project goals. In Six
Sigma it is imperative that the problem is specifically defined.

Measure: Measure and collect data that will determine the factors that
have influence over the outcome of the process or procedure.

Analyze: The data is analyzed using statistical tools to assess whether
the problem is real (and solvable) or random, which makes it unsolvable
within the Six Sigma framework

Improve: If the problem is real, the Six Sigma team identifies solutions
to improve the process based on the data analysis.

Control: Control planning, including data collection and control
mechanisms, is required to ensure that the solutions can be sustained
to deliver peak performance
 DMAIC – The Improvement Methodology
  Define                Measure                 Analyze               Improve                 Control
Objective:             Objective:              Objective:            Objective:             Objective:
DEFINE the             MEASURE current         ANALYZE the root      IMPROVE the            CONTROL the
 opportunity           performance             causes of problems    process to eliminate   process
 (define a clear       (translate into a       (generate a           root causes (convert   to sustain gains
 practical problem)    statistical problem)    statistical           to practical           (sustain the gains)
                                               solution)             solution)


Key Define Tools:      Key Measure Tools:      Key Analyze Tools:    Key Improve Tools:     Key Control Tools:
• Cost of Poor         • Critical to Quality   • Histograms,         • Solution Selection   • Control Charts
  Quality (COPQ)         Requirements            Boxplots, Multi-      Matrix               • Contingency
• Voice of the           (CTQs)                  Vari Charts, etc.   • To-Be Process          and/or Action
  Stakeholder (VOS)    • Sample Plan           • Hypothesis Tests      Map(s)                 Plan(s)
• Project Charter      • Capability Analysis   • Regression
• As-Is Process        • Failure Modes and       Analysis
  Map(s)                 Effect Analysis
• Primary Metric (Y)     (FMEA)
Define – What is the project?
                       $
                                                           Voice of the
      Project        Cost of                               Stakeholder
      Charter         Poor
                     Quality       Stakeholders


 Problem Statement, Business Case, Project Scope, Goal Statement,
  Define Measure Metrics, Benefits, Project Plan, Team and
  Communication Plan

 What, Where, When, To what extent, How do we know?


 Impact on customer, business, potential financial impact and what if
  we do nothing?

 Who are the stake holders / decision makers
Define – How does our existing process work?
Move-It! Courier Package Handling
Process
                                                                                                                                    Accounts              Accounts
                Courier            Mail Clerk         In-SortClerk   In-SortSupervisor DistanceFeeClerk   WeightFeeClerk                                                      Out-SortClerk        Out-SortSupervisor
                                                                                                                                 ReceivableClerk         Supervisor

                                                                                                           Observ e package
                                                                                                           weight (1 or 2) on
                                                                                                            back of package


                                                                                                                 Look up
                                                                                                               appropriate
                                                                                                            Weight Fee and
                                                                                                           write in top middle
                                                                                                            box on package
                                                                                                                   back

                                                                                                                                    Add Distance &
                                   Take packages
                                                                                                                                      Weight Fees
                                  f rom Weight Fee
                                                                                                                                  together and write
                                   Clerk Outbox to
                                                                                                                                  in top right box on
                                  A/R Clerk Inbox.
                                                                                                                                    package back


                                                                                                                                    Circle Total Fee
                                                                                                                                   and Draw Arrow
                                                                                                                                      f rom total to
                                                                                                                                     sender code
Accounting




                                   Take packages                                                                                                          Write Total Fee
                                   f rom A/R Clerk                                                                                                       f rom package in
                                       Outbox to                                                                                                            appropriate
                                       Accounts                                                                                                         Sender column on
                                  Superv isorInbox.                                                                                                     Accts. Supv .’s log


                                  Take packages
                                                                                                                                                                              Draw 5-point Star
                                  f rom Accounts
                                                                                                                                                                                in upper right
                                     Superv isor
                                                                                                                                                                              corner of package
                                  Outbox to Out-
                                                                                                                                                                                     f ront
                                  Sort Clerk Inbox.


                                                                                                                                                                               Sort packages in
                                                                                                                                                                               order of Sender

                                                               Does EVERYONE agree how the                                                                                       Code bef ore
                                                                                                                                                                               placing in outbox


                                   Take packages
                                                               current process works?                                                                   Add up Total # of                             Observ e sender
Finalizing




                                    f rom Out-Sort                                                                                                        Packages and                                  and receiv er
                                   Clerk Outbox to                                                                                                       Total Fees f rom                             codes and make
                                        Out-Sort                                                                                                          log and create                              entry in Out-Sort
                                  Superv isorInbox.                                                                                                        client inv oice                            Superv isor’s log



             Deliv erPackages
Delivery




               to customers
             according to N, S,
                E, W route

                                                               Define the Non Value Add steps                                                           Deliv er inv oiceto
                                                                                                                                                              client


                                                                                                                                                         Submit log to
                                                                         Submit log to                                                                                                                  Submit log to
                                                                                                                                                        General Manager
                                                                       General Manager                                                                                                                General Manager
                                                                                                                                                        at conclusion of
                                                                        at end of round                                                                                                                at end of round
                                                                                                                                                             round.
Define – Customer Requirements
 What are the CTQs? What motivates the customer?

                                 Voice of the Customer   Key Customer Issue   Critical to Quality
    SECONDARY RESEARCH

       Market
        Data       Industry
                 Benchmarking




    Customer       Customer
     Service    Correspondence




     PRIMARY RESEARCH
       Survey
       s




                      Obser-
                      vations
      Focus Groups
Measure – Baselines and Capability
  Sample some data / not all data                                         Descriptive Statistics
                                                                                                          Variable: 2003 Output

  Current Process actuals measured                                                                     Anderson-Darling Normality Test


   against the customer expectation
                                                                                                            A-Squared:          0.211
                                                                                                            P-Value:            0.854

                                                                                                            Mean             23.1692
                                                                                                            StDev            10.2152

  What is the chance that we will                                                                          Variance
                                                                                                            Skewness
                                                                                                            Kurtosis
                                                                                                                             104.349
                                                                                                                            0.238483
                                                                                                                            0.240771
                                                                                                            N                    100

   succeed at this level every time?
                                          0      10           20          30      40      50
                                                                                                            Minimum            0.2156
                                                                                                            1st Quartile      16.4134
                                                                                                            Median            23.1475
                                                                                                            3rd Quartile      29.6100
                                                     95% Confidence Interval for Mu                         Maximum           55.2907
                                                                                                         95% Confidence Interval for Mu
                                                                                                            21.1423           25.1961
                                       19.5   20.5     21.5        22.5    23.5   24.5   25.5   26.5   95% Confidence Interval for Sigma
                                                                                                             8.9690           11.8667
                                                                                                       95% Confidence Interval for Median
                                                 95% Confidence Interval for Median
                                                                                                            19.7313           26.0572
Analyze – Potential Root Causes
What affects our process?




                Ishikawa Diagram
                                           Scatter Plot
                    (Fishbone)




                  y = f (x1, x2, x3 . . . xn)
Analyze – Validated Root Causes
What are the key root causes?




                         Experimental Design


                                               Regression
                                                Analysis

                                 Process
                                Simulation




                y = f (x1, x2, x3 . . . xn)
                           Critical Xs
  Improve – Potential Solutions
  How can we address the root causes we identified?

 Address the causes, not the symptoms




                                          Generate




                                                                Evaluate
                                                      Clarify
                                                                           Decision
y = f (x1, x2, x3 . . . xn)
        Critical Xs

                                    Divergent | Convergent
Improve – Solution Selection
How do we choose the best solution?

                                                   Solution Selection Matrix
                     Quality
                                             Solution   Sigma   Time   CBA   Other   Score




      Time                            Cost


                       Solution
                   Right     Wrong


                  ☺
 Implementation




                               Nice Try
   Bad Good




                                                              Solution
                                                           Implementation
                  Nice                                          Plan
                                  X
                  Idea
Control – Sustainable Benefits
How do we ”hold the gains” of our new process?

 Some variation is normal and OK
 How High and Low can an “X” go yet not materially impact the “Y”
 Pre-plan approach for control exceptions
                                                                    Process Control System (Business Process Framework)
  Process Owner:                                                                              Direct Process Customer:                                                  Date:
  Process Description:                                                                                            CCR:


                                                             Flowchart                                                                    Measuring and Monitoring
                                                                                                                                         Measures
                                                                                                                 Key           Specs
                          Customer              Sales           Processing   Branch Manager
                                                                                                Loan Service                               (Tools) Responsibility Contingency
                                                                                                  Manager      Measure          &/or                                            Remarks
                                                                                                                                          Where &     (Who)       (Quick Fix)
                                                                                                                ments          Targets
                                                                                                                                         Frequency
                                                                                                               P1 - activity
                                                                                                               duration,
                          Apply for
                                                                                                               min.
                                                                                                                                                                                                             35
                            loan
                                                                                                                                                                                                                                                UCL=33.48
  Application & Review




                                              Review
                                            appliation for
                                            completeness                                                       P2 - # of
           1.1




                                                                                                               incomplete




                                                                                                                                                                                          Individual Value
                                                                                                               loan
                                                                                                               applications
                          Complete
                                             Application
                           meeting     No
                         information
                                             Complete?                                                                                                                                                       25
                                                                                                                                                                                                                                                Mean=24.35
  Processing
     1.2




                                                                                                                                                                                                             15                                 LCL=15.21
  Credit review
      1.3




                                                                                                                                                                                                                  0    10         20       30
                                                                                                                                                                                                                      Observation Number
  Review
   1.4
  Disclosure
     1.5
THE TOOL-KIT
                     Graphical Tools
                                             Statistical Tools
Analytical tools     Convert raw data into
                     meaningful images
                                             Aid decision making in
Thinking tools for                           complex “very-little-
effective decision                           difference” situations
making
Tools used for Six Sigma
 Correlation
 Cost-benefit analysis
 CTQ tree
 Design of experiments
 Failure mode and effects analysis (FMEA)
 General linear model
 Histograms
 Pareto chart
 Pick chart
 Process capability
 Regression analysis
 Root cause analysis
 Run charts
 SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers)
Six Sigma Companies

				
DOCUMENT INFO
Description: Project Quality Management Lecture, Audit, inspection, QA, QC, Assurance, Control, Quality control, Introduction to ISO 9001, ISO 9001, Six Sigma Introduction-Revised