J0444 OPERATION MANAGEMENT Six Sigma Pert 12 Universitas Bina Nusantara.

J0444J0444

OPERATION MANAGEMENTOPERATION MANAGEMENT

Six SigmaSix Sigma

Pert

12

Universitas Bina Universitas Bina NusantaraNusantara

HistoryHistory

•Carl Frederick Gauss (1777-1885) introduced the Normal Curve concept.

•Walter Shewhart (1920): Six Sigma as a measurement standard in product variation

•Bill Smith, an engineer from Motorola terminologized the “Six Sigma”

•In the late 1970's, Mikel Harry, a senior engineer at Motorola's Government Electronics Group (GEG), began to experiment with problem solving through statistical analysis. Using his methodology, GEG began to show dramatic results

•Dr. Mikel Harry and Richard Schroeder, were responsible for creating the unique combination of change management and data-driven methodologies that transformed six sigma from a simple quality measurement

Metric Benchmar

k Vision Philosophy Method Tool Symbol Goal Value

• Letter in the Greek Alphabet.

• Used to Describe the Distribution of Any Process.

• The “Sigma Value” is a Metric. It Indicates How Well a Business Process is Performing.

• “Six Sigma” is a Philosophy Aimed at Increasing the Sigma Value of All Business Processes.

Konsep Six SigmaKonsep Six Sigma

• Measure of Quality

• Process For Continuous Improvement

• Enabler for Culture Change

What is Six SigmaWhat is Six Sigma

Measure of QualityExample #1: Manufacturing Steel Rolling Mill

Sheet Thickness is a CTQ(Critical to Quality Parameter)

Nominal Thickness = 1000 mm

Minimum Spec = 950 mm

Maximum Spec = 1050 mm

Scrap Production averages 100 Scrap Production averages 100 meter / Coilmeter / Coil

Measure of Quality

Steel StripThickness

Quite some Variation

-Ending up as Scrap

UpperSpecification

Limit

No Less Than

950mm

Lower Specification

Limit

No More Than

1050mm

Scrap Scrap

Measure of Quality

Let’s Look at some Basic Statistics

Mean Thickness = 993 mm

Standard Deviation = 25 mm

UpperSpecification

Limit

Lower Specification

Limit

Mean Thickness

993mm

Standard Deviation

25mm

On Average it’s OK - it’s a Variation issue

Measure of Quality

How Capable is How Capable is our Process to our Process to Produce within Produce within

Spec?Spec?

Sigma Rating = Spec Width / 2* Sigma Rating = Spec Width / 2* SDSD

UpperUpperSpecificationSpecification

LimitLimit

Lower Lower SpecificationSpecification

LimitLimit

Spec Width (1050-950)Spec Width (1050-950)

100100mmmm

Standard Standard DeviationDeviation

2525mmmm

= 100 / 50= 100 / 50

22==

Measure of Quality

Reducing Variation is

Clearly the Key to Improving

Process Capability

UpperSpecification

Limit

Lower Specification

Limit

Std Dev

Spec Width

2100 m

25 m

Measure of Quality

Reducing Variation is

Clearly the Key to Improving

Process Capability

UpperSpecification

Limit

Lower Specification

Limit

Std Dev

Spec Width

3100 m

17 m

Measure of Quality

Reducing Variation is

Clearly the Key to Improving

Process Capability

UpperSpecification

Limit

Lower Specification

Limit

Std Dev

Spec Width

4100 m

12 m

Measure of Quality

Reducing Variation is

Clearly the Key to Improving

Process Capability

UpperSpecification

Limit

Lower Specification

Limit

Std Dev

Spec Width

5100 m

10 m

Measure of Quality

Reducing Variation is

Clearly the Key to Improving

Process Capability

UpperSpecification

Limit

Lower Specification

Limit

Std Dev

Spec Width

6100 m

8 m

Measure of Quality

Spec Standard Sigma DPMO %Width DeviationLevel In Spec

UpperSpecification

Limit

Lower Specification

Limit

2

100 25 2 308,500 69.1

Unit : Each Measurement

Defect : Measurement out of Spec

Defect Opportunities per Unit : 1

Quality expressed as DPMO

( Defects per Million Opportunities)

6 Sigma Lingo

Measure of QualityUpper

SpecificationLimit

Lower Specification

Limit

33

Spec StandardSigma DPMO %Width Deviation Level In Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3

Unit : Each Measurement

Defect : Measurement out of Spec

Defect Opportunities per Unit : 1

Quality expressed as DPMO

( Defects per Million Opportunities)

6 Sigma Lingo

Measure of QualityUpper

SpecificationLimit

Lower Specification

Limit

4Spec StandardSigma DPMO %Width Deviation Level In Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3 100 12 4 6,200 99.4

Unit : Each Measurement

Defect : Measurement out of Spec

Defect Opportunities per Unit : 1

Quality expressed as DPMO

( Defects per Million Opportunities)

6 Sigma Lingo

Measure of QualityUpper

SpecificationLimit

Lower Specification

Limit

5Spec StandardSigma DPMO %Width Deviation Level In Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3 100 12 4 6,200 99.4 100 10 5 233 99.98

Unit : Each Measurement

Defect : Measurement out of Spec

Defect Opportunities per Unit : 1

Quality expressed as DPMO

( Defects per Million Opportunities)

6 Sigma Lingo

Measure of Quality

Unit : Each Measurement

Defect : Measurement out of Spec

Defect Opportunities per Unit : 1

Quality expressed as DPMO

( Defects per Million Opportunities)

6 Sigma Lingo

UpperSpecification

Limit

Lower Specification

Limit

Spec StandardSigma DPMO %Width Deviation Level In Spec 100 25 2 308,500 69.1

6

100 17 3 66,800 93.3 100 12 4 6,200 99.4 100 10 5 233 99.98 100 8 6 3 99.9997

Example #2: Product DeliveryPT X deliver their products to it’s customer five times, their delivery time data are

•21 days,

•15 days,

•12 days,

•10 days, and

•2 days.

The AVERAGE (Mean) of Their Delivery Time is:21 + 15 + 12 + 10 + 2 = 60/5 = 12 DAYS

PT Y deliver their products to it’s customer five times, their delivery time data are

•14 days,

•12 days,

•12 days,

•12 days, and

•10 days.

The AVERAGE (Mean) of Their Delivery Time is:14 + 12 + 12 + 12 + 10 = 60/5 = 12 DAYS

Measure of Quality

Measure of QualityUpper

SpecificationLimit

UpperSpecification

Limit

Lower Specification

Limit

Lower Specification

Limit

UpperSpecification

Limit

UpperSpecification

Limit

Lower Specification

Limit

Lower Specification

Limit

PT X The AVERAGE (Mean) of

Their Delivery Time is: 12 DAYS

But…

Standard Deviation = 7.0PT Y The AVERAGE (Mean) of

Their Delivery Time is: 12 DAYS

And….

Standard Deviation = 1.4

Measure of QualityBaseline

122414716820251410113016

15.8

Improved (?)277154186236224265

11.2Mean

SD 7.0 9.0

• BUT….our customer only feels the VARIANCE,….and cancel the next orders!

What the Company Feels

11.2 15.8

What Customer Feel

•Using mean-based thinking, we improve average performance by 29%, and break out the champagne…..

Example #2: Service Time

Measure of QualityImproved

(?)11111010121111111112121210

11.07Mean

SD 0.76

• but UNFORTUNATELY, what the customer wants is 9 days (or what competitors can do is 9 days)….so it is not variance issue anymore, but now about the Process Centering issue

•Now it is improved….the Mean is 11, and the STD is below 1….

2323

Variation is the enemy!

•Variation reduction = Defect reduction

•Six Sigma process = Defect reduction until 3.14 out of 1 Million products/process

•Quality measurement = measurement of defect on the process/products

2424

Variation Reduction

Goal: Reduce Process Width-Variation is the Enemy

A Process is “A Distribution of Distributions”

2525

The Athletic View of Performance

•Consider a goalkeeper who plays 50 games a year and faces 40 shots on goal each game.

•A defect is when the opposition scores.

•A 6s goalkeeper will be scored against once in every 147 years

US airline fatality rate:< ½ per million flights, > 6s

Is 6 Sigma Impossible? • US airline baggage handling: 30-50,000 lost items per

million, ~ 3 - 3.5• Average Companies: 30-50,000 defects per million ~ 3 -

3.5• World-Class Companies: <1000 defects per million 5 -

5.5

ReduceSpreadReduceSpread

CenterProcessCenterProcess

Off-Target

XXXXXXX XX

On-Target

XXXXXXX XXXVariation

XX

X

X

X

X

XXX

XX

X

Nature Of The Problem

Process for Continuous Improvement

Process for Continuous Improvement

Y = f {X1, X2, X3, …Xn}

Output(Dependent Variable)

Process(Independent Variables)

2929

Identifying Variation Sources

Y = f ( X1, X2, X3, X4, … , Xn-2, Xn-1, Xn)

OUTPUTY

ProcessX1

X2

X3

X4

Xn-2 Xn-1 Xn

Inside the Box XsControllable

Outside the Box Xs

Un-Controllable

Six Sigma approach is focus on process…Fixing process so they will produce perfection on products and services

Define

Measure

Analyze

Improve

Control

For improve existing process/products

DMAIC

Six Sigma Methodology

Define

Measure

Analyze

Design

Verify

For new process/products (sometime called DFSS, Design For Six Sigma)

DMADV

Six Sigma Methodology

3333

Define Phase• Voice of Customer (VOC)?• Problems?• Unit, Defects, Opportunities?

3434

Measure Phase• Collect data baseline• Identify frequency of defects?• Baseline process capability?• Target or benchmark process capability?

3535

Analyze Phase• Why, when, where defects occurs?• Data analysis• Process analysis• Identify Vital X’s

3636

Improve Phase• How to reduce defects?• Fix problems• Collect improved data

3737

Control Phase• Calculate new process capability• Verify statistically improvement made• Implement process control

Establishing these factors provides the seeds of success.

They need to be integrated consistently to fit each business.

They are all necessary for the best result

The most powerful success factor is “committed leadership.”

Committed and Involved

Leadership

Business Process Framework

Six SigmaProjects

StrategyIntegration

Full Time 6 Sigma Team Leaders

Incentives & Accountability

Quantifiable Measures &

Results

The 6 Sigma Success Factors

What Is Six Sigma Projects?• Project needs to be done by Every Employee (Green

Belt)

• Project using Six Sigma methodology (DMAIC/DMADV)

• Project that making Improvement (DPMO reduction)

• Project that has a measurable unit and defect

• Project that has a measurable impact

• Project that start with Customer (internal/external) CTQ

Harvesting the Fruit of Six Sigma

Sweet Fruit - 6s Design for Six Sigma (DFSS)

Bulk of Fruit - 4 to 5s Process ImprovementSix Sigma Tools

Low Hanging Fruit - 3 to 4sBasic Quality Tools

Ground Fruit - up to 2sLogic and Intuition

Process Entitlement

Start With Low Hanging Fruit