Transcript
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1
Variation Reduction (DMAIC) Fundamentals
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2002 ConceptFlow 2
Module Objective
By the end of this module, the participant should be able to:
Discuss the fundamentals of DMAIC in Variation Reduction
Explain the benefits of DMAIC in Reducing Variation
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2002 ConceptFlow 3
ReduceVariabilityEliminateWaste
Growth
DMAICLEAN
DFSS
Merrill Lynch Six Sigma is a System ofProven Methodologies
Growth Engines
El iminate
Redundancies
Develop Talent
Service
Lets look at the second of these 3 Key Components . . .
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2002 ConceptFlow 4
Premise
The basic premise of DMAIC is that sources of variation can be: Identified
Quantified
Eliminated or Controlled
Focused on strategic or core processes
Data driven
Measurements focused on right things
Variation Is The Enemy!
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2002 ConceptFlow 5
The Goal: Breakthrough Performance
Time
Defectsand
Waste
Six SigmaBreakthrough
Current State
Breakthrough State
Improvement Period
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2002 ConceptFlow 6
99.99966%
99.98%
99.38%
93.32%
69.15%
3.4
233
6,210
66,807
308,537
6
5
4
3
2
Long Term YieldDefects per Million OpportunitiesProcess CapabilitySigma Level
If you played 100 rounds of golf per year, and played at:
2 sigma - you'd miss 6 putts per round
3 sigma - you'd miss 1 putt per round 4 sigma - you'd miss 1 putt every 9 rounds
5 sigma - you'd miss 1 putt every 2.33 years
6 sigma - you'd miss 1 putt every 163 years!
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Simple Definition of Variation
Reduce spread
Client target
Defects
Defects
Accuracy = Centering Precision = Spread
Center on target
Client target
Off center and spread = process variation = Defects
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Voice of the Process Versus Voice of theClient
Voice of the Process is independent of the Voice of the Client
Defects
Voice of the Process
InadequateDesignMargin
InadequateProcess
CapabilityUnstable
Defects Acceptable
LSL USL
Voice of the Client
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Goals of Six Sigma
Center Process on TargetReduce Variation
Client target
Meet Client Targetand Specifications
Client target
Eliminate DefectsReduce Variation
Client target
Defects Defects
GOAL
USLLSL
LSLLSL USL USL
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-3 -2 -1 0 1 2 3
3 Sigma ProcessAverage = 0St.Dev. = 2Tolerance = 12
Shift the average 1.5
-4-5-6 4 5 6
-3 -2 -1 0 1 2 3-4-5-6 4 5 6
Shift the average 1.56 Sigma Process
Average = 0
St.Dev. = 1Tolerance = 12
LSL USL
In a six sigma process, Client Satisfaction and Business Objectives are robust
to shifts due to process or product variation!
By shifting a 6 sigma process1.5 we create 3.4 defects per
million opportunities
By shifting a 3 sigma process1.5 we create 66,807 defects
per million opportunities
Six Sigma As a Statistical Measure
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Cost
Cost
LSL USLNom
Taguchi Loss Function
(New View)
LSL USLNom
TraditionalView
Acceptable
Can We Tolerate Variability?
There will always be variability present in any process We can tolerate variability if:
The process is on target
The total variability is relatively small compared to the processspecifications
The process is stable over time
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Is 99% Good Enough?
99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)20,000 lost articles of mail perhour
Seven articles lost per hour
Unsafe drinking water for
almost 15 minutes each day
One unsafe minute every
seven months5,000 incorrect surgicaloperations per week
1.7 incorrect operations perweek
Two short or long landings atmost major airports each day
One short or long landingevery five years
200,000 wrong drugprescriptions each year
68 wrong prescriptions peryear
No electricity for almost sevenhours each month
One hour without electricityevery 34 years
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2002 ConceptFlow 13
The Magnitude of Six Sigma
Sigma Area Spelling Money Time Distance
3 Floor space of 1.5 misspelled $2.7 million 3 1/2 months Coast-to-coasta small hard- words per page indebtedness per per century tripware store in a book $1 billion in assets
4 Floor space of 1 misspelled $63,000 indebted- 2 1/2 days per 45 minutes of
a typical living word per 30 pages ness per $1 billion century freewayroom in a book in assets driving(inany direction
5 Size of the 1 misspelled word $570 indebtedness 30 minutes A trip to thebottom of in a set of per $1 billion in per century local gasyour telephone encyclopedias assets station
6 Size of a 1 misspelled word $2 indebtedness 6 seconds 4 steps in any
typical in all of the books per $1 billion per century directiondiamond contained in a assets
small library
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2002 ConceptFlow 14
7
Sigma Scale of Measure
1,000,000
100,000
10,000
1,000
100
10
1
DPMOPPM
Restaurant Bills
Doctor Prescription WritingPayroll Processing
Order WriteupJournal Vouchers
Wire TransfersAirline Baggage Handling
Purchased MaterialLot Reject Rate
Domestic Airline FlightFatality Rate (0.43 PPM)
Best-in-ClassAverageCompany
3 4 5 621
Phone In Tax Advice(140,000 PPM)
Six Sigma... Todays Performance
How does your industry rank?
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2002 ConceptFlow 15
Can We Inspect Our Way to Six Sigma?
PPMlt
2 308,5373 66,807
4 6,2105 2336 3.4
Process Capability
Defects Per Million
Opportunities
Inspection can only get us so far
st
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2002 ConceptFlow 16
The Inspection Exercise
Task: Count the number of times the 6th letter of the alphabet appearsin the following text:
The necessity of training farm hands for first class farms in the fatherlyhandling of farm live stock is foremost in the eyes of farm owners.Since the forefathers of the farm owners trained the farm hands forfirst class farms in the fatherly handling of farm live stock, the farmowners feel they should carry on with the family tradition of trainingfarm hands of first class farmers in the fatherly handling of farm livestock because they believe it is the basis of good fundamental farmmanagement
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2002 ConceptFlow 18
Practical Problem Statistical Problem
Statistical SolutionPractical Solution
Overall Problem Solving Approach
Measure Analyze
ImproveControl
y f x x xk ( , , ... , )1 2
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2002 ConceptFlow 19
Process Focus of Six Sigma
Inputs (X1, X2 . . . Xn)
Independent
Cause
Control
Output
Dependent on Input
Effect
Monitor
ProcessY = f(x)X Y
Determining the critical Xs & controlling the Xs to guarantee the Ys
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2002 ConceptFlow 20
How Y=f(x) Relates to a Process
Process
X1
X2Y
(VOP)
Correct
(In-Spec.)
Xn
X3
Process InputVariables
(PIV)
Process OutputVariables
(POV)
ClientsNeeds &
Expectations(VOC)
Critical To Satisfaction(CTS)
Cost Quality Delivery
Control the INPUTS to achieve the desired OUTPUTS
that satisfies our Clients Expectations
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2002 ConceptFlow 21
Optimized Process
10-15 Xs
8-10 KPIVs
4-8 Key KPIVs
Dynamics of Execution Strategy - The FunnelEffect
3-6 Key KPIVs
30-50 Inputs (X)Define Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase
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2002 ConceptFlow 22
Leaders Need to Speak a New Language,Ask Relevant Questions
To better understand our process, Leaders need to ask questions Same questions same answers
Changing the result means we have to change the question
As questions arise, visions emerge, direction becomes apparent
To lead change, Black Belts have to be able to ask critical questions
Of the organization
Of process experts
Of process authority
Questions may often drive behavior
Our Process Owners, Managers and Black Belts will work on what you
are interested in . . . What gets measured, gets done
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2002 ConceptFlow 23
Purpose of the Define Phase
Identify product and/or process to be improved
Identify the clients, their needs and requirements
Quantify the gap(s) between process outputs and clientrequirements
Define the performance standards or measures
Establish project objectives
Ensure resources are in place for the improvement project
Primary responsibility of Project Champion and Black Belt
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2002 ConceptFlow 24
Define Phase Deliverables
Product or process balanced against strategic businessrequirements
Client, critical-to-satisfaction requirements
Linkage of client requirements to process outputs
Team formed with charter describing purpose, goals andbenefits of the six sigma project
Financial benefits approved by Finance Department
A high-level process map of major processing events
occurring in the process Project plan with milestones and deliverables
States the need of the client (CTS) and the problem
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2002 ConceptFlow 25
The Funnel Effect - Measure Phase
Key Tools Process Map
C&E Matrix
FMEA
Measurement System Analysis
Data Collection Plan
Baseline Control Charts
Process Capability Analysis Graphic Techniques
Optimized Process
30 - 50 Inputs (X)
10 - 15 Xs
Eliminate Waste
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2002 ConceptFlow 26
Measure Phase Deliverables
Validated project definition Detailed process map with outputs and labeled inputs Clearly defined process output measures (Ys) Measurement System Analyses on the Ys Control charts on baseline, process performance
Process capability and entitlementAssessment of current control plan C&E Matrix to determine focus within process FMEA to assess and prioritize process risk Low hanging fruit actions assigned to team Valid data in accordance with the data collection plan Graphical interpretation of data
Determines baseline process performance
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2002 ConceptFlow 27
Key Tools Hypothesis Testing
Multi-Vari Studies
Variance Components
ANOVA
Correlation
Regression
Optimized Process
30 - 50 Inputs (X)
10 - 15 Xs
8 - 10 KPIVs
Eliminate Waste
The Funnel Effect - Analyze Phase
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2002 ConceptFlow 28
Analyze Phase Deliverables
A prioritized list of potential sources of variation
Variation Component Studies
Measurement Analysis on the xs
Data collected to validate sources
Graphical and statistical analysis of data
p-value establishing level of significance and probability
Correlation and regression analysis to determine variablerelationships
Reduced list of potential key input variables that affect the
output(s) Updated control charts, process map & FMEA
Results to data (compared to baseline)
Statistically links key input variables with key output variable
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2002 ConceptFlow 29
The Funnel Effect - Improve Phase
Key Tools Screening DOEs
DOEs
Historical DOEs
Modeling DOEs
Optimized Process
30 - 50 Inputs
10 - 15 Xs
8 - 10 KPIVs
4-8 Key KPIVs
3-6 Key KPIVs
Eliminate Waste
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2002 ConceptFlow 30
Improve Phase Deliverables
Systematically experiment with KPIVs
Determine optimum conditions of KPIVs to result inoptimum KPOV to meet CTQ
Proposed optimum operating conditions and solution
Proposed operating tolerances
Continue to lean processA new (improved) process performance baseline and
capability
Validated significance of improvements
Confirmation plan or results
Statistically validates optimum process operation conditions
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2002 ConceptFlow 31
The Funnel Effect - Control Phase
Key Tools Control Plan
SPC
Mistake Proofing
Standard Operations
Optimized Process
30 - 50 Inputs (X)
10 - 15 Xs
8 - 10 KPIVs
4-8 Key KPIVs
3-6 Key KPIVs
Eliminate Waste
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2002 ConceptFlow 32
Control Phase Deliverables
Approved Control Plan encompassing documentationrequired to maintain improvements
Lock in optimum KPIVs
Monitor and control KPIVs to generate optimum KPOV
Continue to lean process
Meet CTQ consistently; sustainable results
Documented project and process improvements
Statistically validated process performance monitoringvehicle
Keep the Process Owner involved throughout the project!
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2002 ConceptFlow 33
Optimized Process
10-15 Xs
8-10 KPIVs
4-8 Key KPIVs
Dynamics of Execution Strategy - The FunnelEffect
3-6 Key KPIVs
30-50 Inputs (X)Define Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase
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2002 ConceptFlow 34
Module Objective
By the end of this module, the participant should be able to:
Discuss the fundamentals of DMAIC in Variation Reduction
Explain the benefits of DMAIC in Reducing Variation
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D M
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2002 ConceptFlow 36
Identify the problem
Define client requirements
DDEFINE PHASE
Who are your key clients and their criticalrequirements (CTSs)?
What are your key process metrics (KPOVs or Ys)and key deliverables objectives and milestones?
Have you created a high-level process map? Has team been initiated (kick-off)? Have you identified areas where you need to collect
data? What is your plan for getting started with your
project? What steps will you take first? Have you selected the key players associated with
the project? Has Finance been involved (approved) in the
project? What is the objective of the project . . . Vision of the
area management team? Review with process owner, IT and Finance? Project definition refined? Project entered in Tracking System?
For the define stage of your project:
Six Sigma Key Concepts
Average vs. VariationAverage tells little about client experience.
The average is hidden within the variationof the data. Within the variation of aprocess are the defects, which prevent youfrom consistently achieving your
Entitlement.
Quantify process performance
Calculate Sigma level
Measure key steps / inputs
MMEASURE PHASE
Have you determined what type of data (KPOVs) isavailable and how has it been collected?
Baseline control charts over time of the KPOVs? Have you completed a process map (flowchart) and
who was involved in its development? Have you determined the categories of defects as
shown in your Pareto analysis? Have you determined if a technology problem is
indicated? If yes, what do you think it will take toimprove it? Are there any other alternatives?
What did you learn when you verified themeasurement system on this project? How did youemploy measurement system analysis to yourproject and what were your takeaways?
Did you identify your next steps? Are you satisfied with the level of cooperation and
support that you are getting? Have you determined the Entitlement of the
Process? What process did you use to determinethe Entitlement?
Have you finalized performance objectives andproject scope?
Update project in Tracking System?
For the measure stage of your project:
Six Sigma Key Concepts
Enti t lementDemonstrated examples of superior
performance represent your Entitlement.Entitlement is a statistical term that refers
to the short-term capability of a process . . .That is referred to the best you have been
in the process
A I
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2002 ConceptFlow 37
Identify, verify and quantify
root causes
Establish improvement targets
Validate hypothesis
ANALYZE PHASE
What tools have you used in this phase and howwere they helpful?
What interim actions have you taken to containdefects until a final solution can be developed andimplemented? Has an FMEA (Failure Modes andEffects Analysis) been completed?
What are your improvement plans and next steps toget there (including timing, responsibility andexpected results)?
Are you satisfied with the level of cooperation andsupport that you are getting?
What other support actions or activities do you needto accelerate your progress?
Is your project statistically a Mean issue, a
Variation issue or both?
Update project in Tracking System?
For the analyze stage of your project:
Six Sigma Key Concepts
DefectsVarious statistical models uncover the
critical factors, which prevent the majorityfrom performing at the Entitlement.
Process change removes the defects andallows performance to shift to theEntitlement.
ACreate the solution design
Validate and pilot the solution
Implement improvement plan
Test solutions
IIMPROVE PHASE
What new tools have you used in this phase andhow were they helpful?
What are the possible root causes of defects?
What product or process design changes arerequired to achieve your improvement goals?
What are your next steps toward achieving yourimprovement targets?
Has Finance been involved in the project to fullyunderstand the cost implications of yourimprovement plans?
Are you satisfied with the level of cooperation andsupport that you are getting?
What other support actions or activities do youneed to accelerate your progress?
For the improve stage of your project:
Six Sigma Key Concepts
Rolled Throughput YieldTypically, we measure the equality of agiven process by calculating the numberof transactions that pass the final step in
the process. However, Rolled ThroughputYield accurately measures the cumulativedefect rate across all critical steps in a
process. Y=f(X1 ,X2 ,X3 ,X4 ,X5)
C
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2002 ConceptFlow 38
EliminateWaste
ReduceVariability
Growth
Six Sigma Elements
Six Sigma is a business phi losophythat employs aclient-centric, fact-based appro achto reduc ing
variat ionin order to dramatically improve qu al i tybyeliminating defects and, as a result, reduc ing cost.
Variation Reduction Report-OutQuestions and Key Concepts
Document procedures
Standardize Process
CCONTROL PHASE
What process controls are being implemented toensure we sustain the gains?
Who is the process owner? Is he or she present?Are they fully aware that they are responsible formaintaining the process after your team hascompleted its project?
Is there a plan to revisit this process in the future toensure the new capability level is maintained?
What is the expected improvement in terms of costreduction? Has finance been involved in theproject?
What new tools have you learned that were used inthe phase of the project?
Are you satisfied with the level of cooperation andsupport that you received during the project? Whatshould we do differently to better support the nextproject?
For the control stage of your project:
Six Sigma Key Concepts
Putt ing it in PerspectiveSigma Level % Defect Free DPMO*
3 Sigma 93% 66,807
4 Sigma 99.4% 6,210
5 Sigma 99.976% 233
6 Sigma 99.9997% 3.4
*Defects Per Million Opportunities
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Trademarks and Service Marks
Six Sigma is a federally registered trademark of Motorola, Inc.
Breakthrough Strategy is a federally registered trademark of Six Sigma Academy.
VISION. FOR A MORE PERFECT WORLD is a federally registered trademark of Six Sigma Academy.
ESSENTEQ is a trademark of Six Sigma Academy.
FASTART is a trademark of Six Sigma Academy.
Breakthrough Design is a trademark of Six Sigma Academy.
Breakthrough Lean is a trademark of Six Sigma Academy.
Design with the Power of Six Sigma is a trademark of Six Sigma Academy.
Legal Lean is a trademark of Six Sigma Academy.
SSA Navigator is a trademark of Six Sigma Academy.
SigmaCALC is a trademark of Six Sigma Academy.
iGrafxis a trademark of Micrografx, Inc.
SigmaTRAC is a trademark of DuPont.
MINITAB is a trademark of Minitab, Inc.
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