Purpose of six sigma : Purpose of six sigma : To make customer happier and increase To make customer happier and increase

profitsprofits

Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction

Continuous efforts to achieve stable and predictable process results (i.e. reduce process variations)

Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled.

Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.

1987 Motorola Develops Six Sigma Raised Quality Standards

Other Companies Adopt Six Sigma GEPromotions, Profit Sharing (Stock

Options), etc. directly tied to Six Sigma training.

Delighting Customers. Reducing Cycle Times. Keeping up with Technology

Advances. Retaining People. Reducing Costs. Responding More Quickly. Structuring for Flexibility. Growing Overseas Markets.

Generated sustained success Project selection tied to organizational

strategy Customer focused Profits

Project outcomes / benefits tied to financial reporting system.

Full-time Black Belts in a rigorous, project-oriented method.

Recognition and reward system established to provide motivation.

It is a Philosophy– Anything less than

ideal is an opportunity for improvement

– Defects costs money– Understanding

processes and improving them is the most efficient way to achieve lasting results

It is a Process– To achieve this level of

performance you need to:

Define, Measure, Analyse, Improve and Control

It is Statistics– 6 Sigma processes will

produce less than 3.4 defects per million opportunities

• Know What’s Important to the Customer (CTQ)

• Reduce Defects (DPMO)

• Center Around Target (Mean)

• Reduce Variation (Standard Deviation)

• Y• Dependent• Output• Effect• Symptom• Monitor

• X1 . . . XnX1 . . . Xn• IndependentIndependent• Input-ProcessInput-Process• CauseCause• ProblemProblem• ControlControl

f(X)f(X)Y=Y=

The focus of Six sigma is to identify and control XsThe focus of Six sigma is to identify and control Xs

• Define• Measure• Analyze• Improve• Control

• DefineDefine• MeasureMeasure• AnalyzeAnalyze• DesignDesign• VerifyVerify

DMAICDMAIC DMADVDMADV

• Existing Processes • New ProcessesNew Processes• DFSSDFSS

Key Concepts

CTQ characteristics for the process, service or process Measure of “What is important to Customer” 6 Sigma projects are designed to improve CTQ Examples:

Waiting time in clinic Spelling mistakes in letter % of valves leaking in operation

A nonconforming unit is a defective unit Defect is nonconformance on one of many

possible quality characteristics of a unit that causes customer dissatisfaction.

A defect does not necessarily make the unit defective

Examples: Scratch on water bottle (However if customer wants a scratch free

bottle, then this will be defective bottle)

Circumstances in which CTQ can fail to meet.

Number of defect opportunities relate to complexity of unit.

Complex units – Greater opportunities of defect than simple units

Examples: A units has 5 parts, and in each part there are 3

opportunities of defects – Total defect opportunities are 5 x 3 = 15

Number of defects divided by number of defect opportunities

Examples: In previous case (15 defect opportunities), if 10

units have 2 defects. Defects per unit = 2 / 10 = 0.2 DPO = 2 / (15 x 10) = 0.0133333

DPO multiplies by one million Examples:

In previous case (15 defect opportunities), if 10 units have 2 defects.

Defects per unit = 2 / 10 = 0.2 DPO = 2 / (15 x 10) = 0.0133333 DPMO = 0.013333333 x 1,000,000 = 13,333

Six Sigma performance is 3.4 DPMO

13,333 DPMO is 3.7 Sigma

Proportion of units within specification divided by the total number of units.

Examples: If 10 units have 2 defectives Yield = (10 – 2) x 100 /10 = 80 %

Rolled Through Yield (RTY) Y1 x Y2 x Y3 x ……. x Yn E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54

What is Sigma?

Shot a rifle? Played darts?

What is the point of these sports?What makes them hard?

Jack

Jill

Who is the better shooter?

Shot a rifle? Played darts?

Deviation = distance between observations and the mean (or average)

Observations Deviations

10 10 - 8.4 = 1.6

9 9 - 8.4 = 0.6

8 8 - 8.4 = -0.4

8 8 - 8.4 = -0.4

7 7 - 8.4 = -1.4

averages 8.4 0.0

Jack

871089

Jill

Deviation = distance between observations and the mean (or average)

Observations Deviations

7 7 - 6.6 = 0.4

7 7 - 6.6 = 0.4

7 7 - 6.6 = 0.4

6 6 - 6.6 = -0.6

6 6 - 6.6 = -0.6

averages 6.6 0.0

Jack

Jill

76776

Sigma level

DPMOPercent

defectivePercentage yield

1 691,462 69% 31%

2 308,538 31% 69%

3 66,807 6.7% 93.3%

4 6,210 0.62% 99.38%

5 233 0.023% 99.977%

6 3.4 0.00034% 99.99966%

7 0.019 0.0000019% 99.9999981%

Variance = average distance between observations and the mean squared

Observations Deviations

10 10 - 8.4 = 1.6

9 9 – 8.4 = 0.6

8 8 – 8.4 = -0.4

8 8 – 8.4 = -0.4

7 7 – 8.4 = -1.4

averages 8.4 0.0

Squared Deviations

2.56

0.36

0.16

0.16

1.96

1.0

Variance

Jack

871089

Jill

Variance = average distance between observations and the mean squared

Observations Deviations

7 7 - 6.6 = 0.4

7 7 - 6.6 = 0.4

7 7 - 6.6 = 0.4

6 6 – 6.6 = -0.6

6 6 – 6.6 = -0.6

averages 6.6 0.0

Squared Deviations

0.16

0.16

0.16

0.36

0.36

0.24

Variance

Jack

Jill

76776

Standard deviation = square root of variance

Average Variance Standard Deviation

Jack 8.4 1.0 1.0

Jill 6.6 0.24 0.4898979

Jack

Jill

But what good is a standard deviation

The world tends to be bell-shaped

Most outcomes

occur in the middle

Fewer in the “tails”

(lower)

Fewer in the “tails” (upper)

Even very rare outcomes are

possible

Even very rare outcomes are

possible

Add up the dots on the dice

0

0.05

0.1

0.15

0.2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Sum of dots

Pro

ba

bili

ty 1 die

2 dice

3 dice

Here is why: Here is why: Even outcomes that are equally Even outcomes that are equally likely (like dice), when you add likely (like dice), when you add them up, become bell shapedthem up, become bell shaped

Normal distributions are divide upinto 3 standard deviations on each side of the mean

Once your that, you know a lot about what is going on

And that is what a standard deviation is good for

“Normal” bell shaped curve

Common Causes: Random variation within predictable range

(usual) No pattern Inherent in process Adjusting the process increases its variation

Special Causes Non-random variation (unusual) May exhibit a pattern Assignable, explainable, controllable Adjusting the process decreases its variation

Process and Control limits: Statistical Process limits are used for individual items Control limits are used with averages Limits = μ ± 3σ Define usual (common causes) & unusual

(special causes) Specification limits:

Engineered Limits = target ± tolerance Define acceptable & unacceptable

Another View

LSL USL USLLSL

Off-Target Large Variation

On-Target

CenterProcess

Reduce Spread

The statistical view of a problem

USLLSL LSL = Lower spec limit

USL = Upper spec limit

LSL = Lower spec limit

USL = Upper spec limit

Good quality: defects are rare (Cpk>1)

Poor quality: defects are common (Cpk<1)

Cpk measuresmeasures “Process Capability”

If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.

μtarget

μtarget

Good quality: defects are rare (Cpk>1)Poor quality: defects are common (Cpk<1)

Cpk = min

USL – x3σ

=

x - LSL3σ

=

3σ = (UPL – x, or x – LPL) = =

14 20 26 15 24

24 – 203(2)

= =.667

20 – 153(2)

= =.833

1 122 3 4 5 6 7 8 9 10 11

1 1 1 1 116

LSL USL

A Six Sigma Process –

Predictably twice as good as what the customer wants

2 3 4 5 6 7 8 9 1210 16151413111

LSL USL

6 Sigma curve

3 Sigma curve

2 3 4 5 6 7 8 9 1210 16151413111

LSL USL

SD = 1

1.5 SD 1.5 SD

34

5

6

7

66810

6210

233

3.4

Sigma

DPMO

On one condition :

Calculate the defects and estimate the opportunities in the same way...

0

100,000

200,000

300,000

400,000

500,000

600,000

1.5 2.5 3.5 4.5 5.5

# of Sigmas

# o

f D

efe

ct p

er

Mill

ion

Sigma Defects numbers per million

1.5s 500,000 2.0s 308,300 2.5s 158,650 3.0s 67,000 3.5s 22,700 4.0s 6,220 4.5s 1,350 5.0s 233 5.5s 32 6.0s 3.4

Components of Six Sigma

Two components of Six Sigma

1. Process Power

2. People Power

P

DC

APlan

DoCheck

Act

Act on what was learned

Check the results

Plan the change

Implement the change on a small scale.

Practical Problem

StatisticalProblem

Statistical Solution

Practical Solution

Define What is important?

Measure How are we doing?

Analyze What is wrong?

Improve Fix what’s wrong

Control Ensure gains are

maintained to guarantee performance

DDefine

MMeasure

AAnalyze

IImprove

CControl

Identify and state the practical problem

Validate the practical problem by collecting data

Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution

Confirm and test the statistical solution

Convert the statistical solution to a practical solution

DDefine

MMeasure

AAnalyze

IImprove

CControl

VoCVoC - Who wants the project and why ?

The scope of project / improvement (SMART Objective)

Key team members / resources for the project

Critical milestones and stakeholder review

Budget allocation

Ensure measurement system reliability

Prepare data collection plan

Collect data

- Is tool used to measure the output variable flawed ?

- How many data points do you need to collect ?- How many days do you need to collect data for ?- What is the sampling strategy ?- Who will collect data and how will data get stored ? - What could the potential drivers of variation be ?

DDefine

MMeasure

AAnalyze

IImprove

CControl

How well or poorly processes are working compared with- Best possible (Benchmarking)- Competitor’s

Shows you maximum possible result

Don’t focus on symptoms, find the root cause

DDefine

MMeasure

AAnalyze

IImprove

CControl

Present recommendations to process owner.

Pilot run- Formulate Pilot run.

- Test improved process (run pilot).

- Analyze pilot and results.

Develop implementation plan.

- Prepare final presentation.

- Present final recommendation to Management Team.

DDefine

MMeasure

AAnalyze

IImprove

CControl

Don’t be too hasty to declare victory.

How will you maintain to gains made?

- Change policy & procedures

- Change drawings- Change planning- Revise budget- Training

DDefine

MMeasure

AAnalyze

IImprove

CControl

Step Consequences if the step is omitted

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

Benchmark Baseline Contract / Charter Kano Model Voice of the Customer Quality Function Deployment Process Flow Map Project Management “Management by Fact” – 4 What’s

7 Basic Tools Defect Metrics Data Collection, Forms, Plan, Logistics Sampling Techniques

Cause & Effect Diagrams Failure Models & Effect Analysis Decision & Risk Analysis Statistical Inference Control Charts Capability Reliability Analysis Root Cause Analysis 5 Why’s Systems Thinking

Design of Experiments Modelling Tolerancing Robust Design Process Map

Statistical Controls Control Charts Time Series Methods Non Statistical Controls Procedure adherence Performance Mgmt Preventive activities Poke yoke

DefineWhat is wrong?Define

What is wrong?MeasureData & Process

capability

MeasureData & Process

capability

Analyze When and whereare the defects

Analyze When and whereare the defects

ImproveHow to get to six sigma

ImproveHow to get to six sigma

ControlDisplay

key measures

ControlDisplay

key measures

Two components of Six Sigma

1. Process Power

2. People PowerTell me, I forget. Show me , I remember. Involve me, I understand.

Master Black Belt

Black Belts

Green Belts

Team Members / Yellow Belts

Ch

amp

ion

s

Mentor, trainer, and coach of Black Belts and others in the organization.

Leader of teams implementing the six sigma methodology on projects.

Delivers successful focused projects using the six sigma methodology and tools.

Participates on and supports the project teams, typically in the context of his or her existing responsibilities.

Champion

BlackBelt

BlackBelt

BlackBelt

GreenBelt

GreenBelt

GreenBelt

GreenBelt

GreenBelt

YellowBelt

YellowBelt

YellowBelt

YellowBelt

MasterBlackBelt

SeniorExecutives

Champions /Process owners

Black-Belt

Green Belt

Employees(Yellow-Belt)

Executive overview2/3 Days Provide Leadership

Champions Training - I

2 days

Champions Training –II

3 days

Process Mgmt. & Project champion

Week 2

Week 3

Week 4

Training /Facilitation

skills

Project-work

Master Black-Belt-As Trainer-Coach teams-Facilitateimprovement projects

1 Week Green-Belt Training

- Part of project teams- Sometime lead the

teams

1 / 2 Days core training on Six-Sigma

- General process control &

improvement- Project Team

Member

Black-Belt

Project work

Position in Six Sigma Organisation

Typical Training

Expected Role Post Training

+

(Total 5 days)

Week 1

• Plans improvement projects

• Charters or champions chartering process

• Identifies, sponsors and directs Six Sigma projects

• Holds regular project reviews in accordance with project charters

• Includes Six Sigma requirements in expense and capital budgets

• Identifies and removes organizational and cultural barriers to Six Sigma success.

• Rewards and recognizes team and individual accomplishments (formally and informally)

• Communicates leadership vision

• Monitors and reports Six Sigma progress

• Validates Six Sigma project results

• Nominates highly qualified Black Belt and/or Green Belt candidates

Roles Responsibilities

- Enterprise Six Sigma expert

- Permanent full-time change agent

- Certified Black Belt with additional specialized skills or experience especially useful in deployment of Six Sigma across the enterprise

- Highly proficient in using Six Sigma methodology to achieve tangible business results.

- Technical expert beyond Black Belt level on one or more aspects of process improvement (e.g., advanced statistical analysis, project management, communications, program administration, teaching, project coaching)

- Identifies high-leverage opportunities for applying the Six Sigma approach across the enterprise

- Basic Black Belt training

- Green Belt training

- Coach / Mentor Black Belts

Roles Responsibilities

- Six Sigma technical expert

- Temporary, full-time change agent (will return to other duties after completing a two to three year tour of duty as a Black Belt)

- Leads business process improvement projects where Six Sigma approach is indicated.

- Successfully completes high-impact projects that result in tangible benefits to the enterprise

- Demonstrated mastery of Black Belt body of knowledge

- Demonstrated proficiency at achieving results through the application of the Six Sigma approach

- Coach / Mentor Green Belts

- Recommends Green Belts for Certification

Roles Responsibilities

- Six Sigma Project originator

- Part-time Six Sigma change agent. Continues to perform normal duties while participating on Six Sigma project teams

- Six Sigma champion in local area

- Recommends Six Sigma projects

- Participates on Six Sigma project teams

- Leads Six Sigma teams in local improvement projects

Roles Responsibilities

- Learns and applies Six Sigma tools to projects

- Actively participates in team tasks

- Communicates well with other team members

- Demonstrates basic improvement tool knowledge

- Accepts and executes assignments as determined by team

• Hard Savings:– Cost Reduction

• Energy Saving• Raw Material saving• Reduced Rejection, Waste, Repair

– Revenue Enhancement• Increased production• Yield Improvement• Quality Improvement

• Hard Savings:– Cash flow improvement

• Reduced cash tied up in inventory• Reduced late receivables, early payables• Reduced cycle time

– Cost and Capital avoidance• Optimizing the current system / resources• Reduced maintenance costs

Types of Savings

• Soft Savings:– Customer Satisfaction / Loyalty– Employee Satisfaction

Types of Savings

• Direct Payroll– Full time (Black Belts, Master Black Belts)

• Indirect Payroll– Time by executives, team members, data

collection

• Training and Consulting– Black Belt course, Overview for Mgmt etc.

• Improvement Implementation Costs– Installing new solution, IT driven solutions etc.

• Three basic qualifications:– -There is a gap between current and

desired / needed performance.– The cause of problem is not clearly

understood.– The solution is not pre-determined, nor is

the optimal solution apparent.

How many projects out of 20 now qualify as Six sigma projects?