# 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

 DMAIC is used for projects aimed at improving an existing
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

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

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

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