SIX SIGMA

SIX SIGMA By: Engr. Bilal Rauf What is Six Sigma? • Six Sigma is customer centered, systematic, and data driven method for doing things better. • “Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process from manufacturing to transactional and from product to service”. What is Six Sigma? • A comprehensive and flexible system for achieving ,sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of the fact, data and statistical analysis and diligent attention to managing, improving and reinventing the business process. Six Sigma Themes • Genuine focus on the Customers. Top priority because: – Performance measure begins with customers. – Improvements are defined by their impacts on customer satisfaction and values. • Data and Fact driven Management Six Sigma Themes • Process Focus, Management and improvement. In six sigma processes are where the action is: – Designing product/process – Measuring performance – Improving effectiveness and customer satisfaction level Six Sigma Themes • Proactive Management • Defining ambitious goals, review them frequently, setting clear targets and focusing on the problem prevention. • Questioning why we do things rather than blindly depending as how wed do things’ Six Sigma Themes • Boundary less Collaboration Breaking down and improving teamwork, up down and across the organization lines, with vendors and customers for a common cause i.e. “Providing Value to Customers” Drive for Perfection; Tolerance for Failure Companies that set Six Sigma a goal, will have to constantly push to be evermore-perfect while being willing to accept and manage occasional set backs. • Statistical Six Sigma Definition • The six sigma quality is to reduce process output variation so that on a long term basis, this will result in no more than 3.4 Defects per Million Opportunities. Six Sigma Measurement • How close are you to meet your customers needs? • 2 Sigma • 4 Sigma • 6 Sigma – 69.146% of products services meet customer requirements with 308,538 defects PMO. – 99.379% of products services meet customer requirements with 6210 defects PMO. – 99.99966% of products services meet customer requirements with 3.4 defects PMO. Infrastructure for Six Sigma Implementation Six Sigma Change Agents Leadership Champions and Sponsors Master Black Belt. Black Belt Green Belt Champions and Sponsors Master Black Belts Copyright © 2000 by Thomas Pyzdek Leadership Green Belts Black Belts $1,000,000/BB/yr 5 LEADERSHIP Six Sigma must be implemented from the top-down. CHAMPIONS & SPONSORS •High level individuals who understand Six Sigma and are committed to its success. •Champions are trained in the essentials of the Six Sigma •Champions must select and mentor Six Sigma project leaders •Champions must support ,align and integrate the Six Sigma Launch into their organization. Master Black Belt. Master Black Belt provides technical leadership to Six Sigma program. The mentor and teacher of the of Six Sigma Black Belt and Six Sigma Green Belt. Black Belt.  Black Belts are project leaders who receive four weeks of training focusing on the Six Sigma Road map and extensive statistical methodologies. Successful Black Belts normally dedicate at least 75% of their time to four to six month Six Sigma Project. Green Belt. Green Belts are project leaders who receive two weeks of training on the Six Sigma roadmap and essential elements of Statistical methodologies supporting Six Sigma projects. Successful Green Belts are able to allocate 50% of their time to their four to six month Six Sigma Project. Six Sigma Methodology Conceptual Questions • Draw the process flow diagram of an automobile company. • Why proactive management is necessary for implementing six sigma. • Write any five examples of a six sigma project. Six Sigma Methodology • There are mainly two methods : • DMAIC • DMADV • DMAIC • Define the project goals . At the top level the goals will be the strategic objectives of the organization, such as a higher ROI or market share. At the operations level, a goal might be to increase the throughput of a production department. At the project level goals might be to reduce the defect level and increase throughput. Contd. DMAIC • Measure the existing system. Establish valid and reliable metrics to help monitor progress towards the goals defined at the previous step. Begin by determining the current baseline. Use exploratory and descriptive data analysis to help you understand the data. Contd. DMAIC • Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal. Apply statistical tools to guide the analysis. Contd. DMAIC • Improve the system. Be creative in finding new ways to do things better, cheaper, or faster. Use project management and other planning and management tools to implement the new approach. Use statistical methods to validate the improvement. Contd. DMAIC • Control the new system. Institutionalize the improved system by modifying compensation and incentive systems, policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize systems such as ISO 9000 to assure that documentation is correct. DMADV • Define The project goals and customer (internal • • • • and external) deliveries. Measure and determine customer needs and specifications. Analyze the process options to meet the customer needs. Design( detailed) the process to meet the customer needs. Verify the design performance and ability to meet customer needs. When to use DMAIC and DMADV • DMAIC • The DMAIC methodology should be used when a product or process is in existence at your company but is not meeting customer specification or not performing adequately. Contd. When to use DMAIC and DMADV • DMADV • The DMADV methodology should be used when: – A product or process is not in existence at your company and one needs to be developed. – The existing product or process exists and has been optimized and still doesn’t meet the level of customer specification or six sigma level. Six Sigma Tools • • • • • • • • • • • Process Mapping Failure Mode & Effect Analysis Measurement System Evaluation Statistical Tools Design of Experiments Control Plan Quality Function Deployment (QFD) Activity Based Management Enterprise Resource Planning Lean Enterprise Total Productive Maintenance (TPM) Implementation Road Map Identify Core processes and Key Customers Defining Customers Requirements Measuring Current Performance. Six Sigma Process Improvements. Six Sigma Process Design/ Redesign. Expending and Integrating the Six Sigma System •Identify Core processes and Key Customers Identify core and Support Processes Define output and Key Customers Create high level process Maps. Defining Customers Requirements Gather Customer Data, Develop voice of the customer’ Strategy. –Develop performance standards and requirement statements. Analyze and prioritize requirements. Measuring Current Performance. Plan and execute measure of performance against customer requirements. Develop baseline defect measure and identify improvement opportunities. •Six Sigma Process Improvements/Six Sigma Process Design Redesign. Select Improvement Projects & Develop project Rationale Analyze, develop & implement Root cause focused solution. Design /Redesign and implement effective new work process Expending and Integrating the Six Sigma System Implement ongoing measures & actions to sustain the improvement. Define Responsibility for process ownership & management. Execute “closed-loop” management And drive to Six Sigma. Applying Six Sigma to Service and Manufacturing Six Sigma in Services • Start with the process Investigate and rediscover your process • Fine-tune the problem Problem definition and scaling of the project. • Making good use of facts and data to reduce ambiguity. • Don’t overemphasize statistics Many service groups are not ready for detailed statistics at the outset, timing is very important. Six Sigma in Manufacturing • Adopting a broader perspective - Communication and coordination all along the critical process not production in isolation. • Moving past “certification” to Improvement - Not focusing on just certification and documentation, but improving the processes. • Adapting tools to your manufacturing environment - Select, apply, and adapt methods and ideas to fit your organization. Identifying Six Sigma Projects Project Selection Ideas By Function Finance/Accounting Six Sigma Project Ideas • Reduce the time it takes to close the accounting books (cycle time) • Improve the forecast accuracy • Control spending over time • Reduce balance sheet risk • Eliminate unstable customers and associated risks • Improve payment processing to vendors/suppliers Finance/Accounting Six Sigma Project Ideas • Improve Day Sales Outstanding (DSO) – the • • • • • • average time taken by a company to collect payment from its customers Reduce payroll process cycle time Improvement payment/collection processes Reduce electronic financial transaction costs Reduce the cycle time of reconciliation Reduce the procure to pay cycle Standardize the accrual and deferral processes Product/Service Design Six Sigma Project Ideas • Reduce time required to design a product or service • Reduce errors in design • Reduce production time • Reduce testing time Obvious Areas for Improvement External Defects • Audits (customer, regulatory or internal ) discovering non-compliance issues • Any out of specification (customer, regulatory or internal) output • Any inspection process in your organization Internal Defects • Any scrap produced by your processes • Any item reworked in a process (sales contracts, • • • invoices, surgeries, software, etc.) Any process with high variation in the product output Any process with high variation in the material consumption Any process with many “hand-offs” between individuals or business groups Efficiency/Capacity Issues • Processes producing less than expected • Processes requiring overtime not requested by a • • • customer Processes requiring cycle times in excess of expectations Processes with computer/machine downtime Process requiring expedited shipping and associated costs due to delayed output production Any process that has added labor to make the required cycle • Understanding Process Variation • How much variation is there in your incoming • • • materials and/or process parameters and how does this affect your output? Where do you need the input controlled to always have a good output? Can you scientifically adjust your process to compensate for changing material, weather, etc.? Can your Black Belt help your supplier do a project to control the incoming product where you need it? Does understanding your inputs allow you to produce a good part using less material • General Six Sigma Project Ideas • Reduce expenses at……. • Reduce scrap….. • Reduce downtimes…. or increase uptimes… • Reduce work…….. • Increase throughout at……… • Reduce quality defects………. Six Sigma Benefits Six Sigma Benefits • • • • Delivers shareholder value Generates very high return on investment Translates strategic goals into results Delivers dramatic performance improvements within months Increases revenue and reduces costs simultaneously Drives core processes and customer service excellence Developers and entrepreneurial culture • • • Conceptual Questions • What are different tools for implementing six sigma • Why six sigma is so popular in business world these days