Copyright 2010 CGM Associates, LLC – All Rights Reserved Professional Development Series: SIX SIGMA University of Louisville School of Business March 27, 2010
Jan 21, 2015
Copyright 2010 CGM Associates, LLC – All Rights Reserved
Professional Development Series:
SIX SIGMA
University of Louisville School of BusinessMarch 27, 2010
Agenda
Part I: The Nature of Six Sigma
Part 3: Benefits and Value
• Historical perspective
• 100,000 foot view – roles, methodology
• Advantages
• Trends
• Career value
• Personal value
Part 2: Training and Certification• Curriculum and requirements
• Providers and costs
• Other Resources
2
Copyright 2010 CGM Associates, LLC – All Rights Reserved
PART 1:
The Nature of Six Sigma
• Early 80’s: Motorola develops a statistically-based problem-
solving methodology to improve the „Bandit‟ pager
(manufacturing focus only)
• Late 80’s: Motorola entrepreneurs leave to promote Six
Sigma elsewhere
• 1995: Allied Signal introduces Six Sigma to GE
• 1998 - Present: Six Sigma evolves into non-manufacturing,
design and transactional applications
• 2000 – Present: Lean Six Sigma and DFSS become prevalent
Six Sigma changes the business culture
The History of Six Sigma
4
Determine
customer
need to
be
satisfied
Identify
the
business
process
that fulfills
the need
Study the
process,
identify
variation
drivers
Optimize
the
processEnsure that
customer
need is met
and fix is
sustained
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROLCustomer
Scope
TeamMeasurement
Baseline
Graphs
Statistics
Experiment
OptimizeSustain Validate & Close
The Phases of Six Sigma
5
• ‘Effectiveness’ (customer‟s view): meeting customer requirements and creating „delight‟
Customers feel VARIATION, not averages
Win by preventing fires, not fighting them
Customer Satisfaction is the differentiator in today‟s market
• ‘Efficiency’ (management view): providing streamlined processes, minimizing internal costs
Six Sigma goal: satisfy customers profitably
Why Six Sigma Now?
6
‘Top 10’ Six Sigma Concepts
1. Customers are ALWAYS the starting point
2. The methodology is the key, not the tools
3. Issues arise from the process, not the people
4. Excessive variation is the enemy
5. Control the x‟s, not the „y‟
6. Change must be managed
7. Measurement systems create variation
8. Data always drive good decision-making
9. Test theories before making decisions
10.Create systems to sustain the gains
7
Six Sigma Roles
Green Belts
~ 80% of those
trained
Black Belts~ 15%
~ 5%Master Black
Belts:
Yellow Belts (team members)
• Project leaders (typically smaller-scope projects)
• Part-time process improvement role
• Project leaders (typically larger-scope projects)
• Typically full-time process improvement role
• Mentor Green Belts
• Project leaders (typically strategic initiatives)
• Full-time process improvement role
• Mentor Black Belts, Green Belts
• Subject-matter experts, trainers, facilitators
Other Roles:
• Process Owner – first-level „client‟, budget-owner of functional area
• Champion – roadblock remover, resource provider, ultimate process owner
• Sponsor – high-level supporter of project (typically VP+)
8
Six Sigma Roadmap & Tools
DEFINE PHASE – Understand Customer Needs
Step 1: Customer
Step 3: Scope
Step 2: Team
MEASURE PHASE – Develop Process MeasurementsStep 4: Measurement
Step 5: Baseline
ANALYZE PHASE – Develop Theories
Step 6: Correlation
Step 7: Theories
IMPROVE PHASE – Create Solutions, Test & Optimize
Step 8: Causation
Step 9: Performance
CONTROL PHASE – Sustain the Gains
Step 10: Methods
Step 11: Closure
Tools: VOC, COPQ, Stakeholder Analysis
Tools: Pareto, C & E, CTQ tree, QFD, SIPOC, Process Map, Value Stream
Tools: Project Charter, Elev. Speech, T/O Matrix, Comm. Plan
Tools: Operational Definition, Measurement Validation
Tools: Brainstorming, Sampling, DPMO/Sigma Level, Benchmarking
Tools: Graphical analysis, Basic Stats
Tools: Inferential Stats, Analogy, FMEA, Impact/Control Matrix
Tools: Anti-solution, Pilot Studies, DOE
Tools: Confirmation Runs, Tolerancing, Re-baselining
Tools: Control Plan
Tools: 5-S‟s, Mistake-Proofing, SPC
9
(DPMO Distribution Shifted 1.5s)
2 308,5373 66,8074 6,2105 2336 3.4
Sigma Level DPMO
Process
‘Capability’Process
‘Performance’
1.5 500,000
Yield
50%69%93.3%99.379%99.9767%99.9997%
Quantifying ‘Six Sigma’
(Defects Per Million Opportunities)
10
X’s
Independent
variables
CAUSES
f = Process
Noise
The Mechanics of Six Sigma
INPUT OUTPUTY’s
Dependent
variables
EFFECTS
‘Process’: a sequence of steps that produces an output
THE OUTPUT IS A FUNCTION OF THE INPUT (‘y = f(x)’)
Three Basic Strategies:1. Control the X‟s (DMAIC)
2. Change the Process
3. Reduce the Noise
11
Trying to control the output is like closing the doors after the horse has already left the barn . . .
Control the X’s
• The „y‟ is the OUTPUT . . . It depends
on the INPUT (the x‟s)
• Trying to control the output is a
reactive approach that doesn‟t work –
it‟s too late
• By the time you take action on process
output that has gone bad, the customer
has already felt the „pain‟
Proactive Approach: CONTROL the x’s, monitor the ‘y’
12
N
Y
Start Point: Customer calls to place order End Point: Call is ended by customer
Y
YY
Y
N N
NN
Customer call
answered
New
customer
?
Enter
demographic
info
Model # known
?
Look up
model #’s
Access
demographic
database
Are models
available
?
Check
credit
Credit OK
?
Transfer to
Customer
Service
Verify order
Submit
order
Is
B/O
OK
?
Check
Availability
END CALL
Order Entry Process Map
Request
delivery loc,
date, time
END CALL
13
What you
think it is . . .What it actually
is . . .What you
would
like it to be
Understanding the Process
14
From a statistical point of view, there are only two
problems with any process . . .
It has too much spread -
too variable
It needs centering -
off target
xx
x
x
x
xx
xx
x
x
x
x
x
xxx
xxx
xxxx
xx
Basic Process Issues
15
Concept Focus: Measurement Validation
Measurement systems can be
extremely variable
The necessity of training farm hands for first-class farms in
the fatherly handling of farm livestock is foremost in the
minds of farm owners. Since the forefathers of the farm
owners trained the farm hands for first-class farms in the
fatherly handling of farm livestock, the farm owners feel
they should carry on with the family tradition of training
farm hands of first-class farms in the fatherly handling of
farm livestock because they believe it is the basis of good
fundamental farm management.
How many ‘f’s do you see?
16
• The methodology is „closed loop‟, not one-way . . . It
begins and ends with the customer
• The Six Sigma methodology requires valid measurement of
quantifiable results that are tied to business strategies
• Implementation of the methodology instills a disciplined
approach to problem-solving and process improvement
• Because of the required team approach, functional „silos‟
in an organization are bridged by doing projects
• When done correctly, the fix stays fixed
Six Sigma Advantages
Six Sigma can be used anywhere a
process can be defined (ANYWHERE!)
17
PROCUREMENT
Blocked Invoice
Reduction
Late Payment Reduction
SERVICE
Service Call Completion
Rate Improvement
Repeat Call Reduction
Parts Availability
Service Call Scheduling
LOGISTICSOn-time Delivery
Pick/Pack Accuracy
Returns Reduction
Damage Reduction
HUMAN
RESOURCES
Attendance Improvement
Employee Retention
Open Position Fill Time Improvement
CALL CENTERS
Speed of Answer Increase
% of Calls Answered Increase
Claim Cycle Time Reduction
ORDER-TAKING
Fill Rate Improvement
Order Accuracy
Invoice Error Reduction
Speed of Order Improvement
Six Sigma Project Examples
FINANCE
DSO Reduction
Quarter Close Efficiency
MANUFACTURING
Cycle Time Improvement
Waste Reduction
Defect Elimination
INVENTORY
Forecasting Accuracy
Warehouse Availability
Inventory Aging Reduction
Inventory Turns Improvement
IT
System Downtime Reduction
Code Error Reduction
18
Project Benefits
Quantifying project benefits is a critical success factor
The 3 ‘Benefit Buckets’:
1 2 3
Cost Out
• „Hard‟ savings
• Direct budget
impact
• Internal focus
(typically)
• „Bottom Line‟
Customer
Satisfaction
• „Soft‟ savings
• Indirect budget
impact
• External focus
• „Top Line‟ or
„Bottom Line‟
Revenue
Growth
• „Soft‟ savings
• Indirect budget
impact
• External focus
• „Top Line‟
19
Six Sigma Linkages
Change Mgmt
Lean
Project Mgmt
Six Sigma:
DMAIC
For maximum effectiveness, ‘traditional’ Six Sigma is blended with
concepts from other disciplines
• Vision
• Stakeholders
• Communication
• Elimination of waste
• Cycle time
• Continual improvement
• Scope
• Schedule
• Cost
20
Six Sigma Trends
• Customization for business needs
o Transactional vs. manufacturing
o Naming („BPM‟, „BPI‟, „PDO‟, „PIDEAS‟, „VDS‟ . . . etc.)
• Benefits are not just cost-out; more direct customer focus
• Emphasis on DFSS – Design for Six Sigma – designing in quality for both
new products and new processes
• Practitioner collaboration (not Lean vs. PMP® vs. Belt)
• Lean first, then Six Sigma; project and change management
throughout
• Recognition that “the soft stuff is the hard stuff” – Michael Hammer
(the need for effective change management)
• The methodology is the power, not the tools
21
The 10 Questions
DEFINE Phase:1. Who is (are) the customer(s)?
2. What does the customer care about? (or, What „pain‟ is the customer is having with the process output you provide?)
3. How should we measure what the customer cares about?
MEASURE Phase:4. Is the measurement system acceptable/valid?
5. How are we performing today, relative to what the customer cares about?
ANALYZE Phase:6. What are all of the potential causes of the process problems?
7. What is the proof (data) that shows that the things we think need fixing really should be fixed? (are these really the
causes of the problem?)
IMPROVE Phase:8. Have we tested the proposed solution to be sure that it really fixes the problem? (without unintended consequences)
CONTROL Phase:9. What provisions have been made to keep the fix fixed? (sustainability)
ALL Phases:10. How will we communicate the changes made and the results of the project outside of the project team?
10 questions that must be answered satisfactorily to
successfully implement any improvement project:
22
Copyright 2010 CGM Associates, LLC – All Rights Reserved
PART 2:
Training and Certification
Typical Six Sigma Green Belt Curriculum
DEFINE MEASURE ANALYZE IMPROVE CONTROL
Deliverables required for Certification:
Optional Tools to Support Each Phase:
Define:Assess stakeholder
impact
Translate VOC to
CTQ to Project y
Create Project
Charter
Develop
communication plan
Create high-level
process map
Review, sign-off of
Define Phase by
Certification Board
Measure:Create detailed process map
Define a defect in „y‟
Develop operational
definition for „y‟
Validate measurement
system
Brainstorm list of potential
x‟s
Develop data collection plan
Baseline process performance
– graphical presentation
Review, sign-off of Measure
Phase by Certification Board
Analyze: Conduct Process Analysis with
supporting in-depth process
maps
Conduct Data Analysis with
supporting graphs and/or
statistics
Provide a summarized list of
screened potential Vital x‟s
Review, sign-off of Analyze
Phase by Certification Board
Improve:Brainstorm list of
potential solutions
Select the potential
solution(s) that optimize
performance
Pilot improvements
Collect data to verify
performance with
comparison of before &
after
Implement improvements
Review, sign-off of
Improve Phase by
Certification Board
Control:Develop and implement
Control Plan
Document new process
Summarize and validate
business benefits with
Champion
Transition to Process
Owner
Review, sign-off of
Control Phase by
Certification Board
Complete project closure
documentation
Measure:
Process Map
MSA (Measurement System
Analysis)
Brainstorming Tools: Fishbone,
Affinity diagram, Multi-Voting
Data Collection Plan
Baseline Performance Tools:
Histogram, Pie Chart, Bar
Chart, Run Chart, Individuals
Chart, DPMO, Sigma Quality
Level, Capability Analysis,
Benchmarking
Analyze:
Process Analysis: Analogy, 5
Why?s, Walk the Process,
Value-Adding Analysis, FMEA
Graphical Analysis: Boxplot,
Scatterplot, Dotplot, Pareto
Chart, Multi-vari chart
Statistical Analysis:
Hypothesis Testing
Team Effectiveness
Evaluation
Improve:
Solution Brainstorming:
Anti-solution, Chain
Letter,5S, Mistake-Proofing
Solution Selection:
Selection Matrix , Pugh
Matrix, Cost-Benefit
Analysis
Process Map (To Be)
Pilot Study
DOE (Design of
Experiments)
Re-Baseline, Interval Plots
Control:
FMEA (on improved process)
Change Sustainability Model
Control Plan
Process Monitoring: Control
Charts, Dashboards and/or
Scorecards
Training Plan
Change Management Plan
Project closure and team
recognition
Define:
Stakeholder Analysis
CTQ Tree
SIPOC Map
Risk Mitigation Plan
Cost of Poor Quality
Communication Plan
Roles & Responsibilities
Chart
Elevator Speech
Quick Wins (if applicable)
MGPP (Multi-Generational
Project Plan
24
Typical BB/MBB Training Enhancements
The training content at each Belt level builds upon the previous level
(although the basic project deliverables remain the same)
Black Belt (BB) = Green Belt (GB), PLUS
• Higher-order statistical tools
• Lean applications, details
• DFSS (Design for Six Sigma) elements, including
modeling
• Mentoring skills (BBs provide mentoring for GBs)
Master Black Belt (MBB) = Black Belt (BB), PLUS
• Financial analysis
• Leadership skills
• Mentoring skills
• Program management skills
• Other technical tools, such as TRIZ, Theory of
Constraints, Systems Theory, etc.
• High-level statistical tools, statistical theory
NOTE: the
elements
described here are
recommended,
but illustrative
only – there may
be significant
variation in course
content from one
training provider
to another
25
Six Sigma Belt LevelApproximate
Duration (Hrs)
Yellow Belt (awareness) 24
Green Belt (GB) 60
Black Belt (BB) 120
Master Black Belt (MBB) 80
Training – Providers, Costs
Where?
• Corporations –o Internal training
• Open Enrollment
Providerso Air Academy
o ASQ (American
Society for Quality)
o BMG
o Juran Institute
o Motorola University
o SSA & Co.
o Stat-a-Matrix
o Others . . .
• Universitieso NC State
o Rutgers
o UT-Austin
o Villanova
o Others . . .
How Much?
Six Sigma Belt Level Approximate Cost*
Yellow Belt (awareness) $1,000
Green Belt (GB) $3,500
Black Belt (BB) $8,000
Master Black Belt (MBB) $8,500*Costs based upon iSixSigma magazine survey, March, 2009 – value represents at
least 14 open-enrollment providers at each belt level
How Long?
*Duration based upon iSixSigma magazine survey, March, 2009 – value represents
at least 14 open-enrollment providers at each belt level
Each level
is a pre-
requisite
for the
next – costs
are
additive
Each level
is a pre-
requisite
for the
next –
durations
are
additive
26
Other Considerations
• Green Belt (GB) classes may be 5 or 10 days in duration; the 10-day courses are typically
separated by 4-6 weeks to allow application of concepts to a project
• Black Belt (BB) classes are typically one week per month over approximately four months
• Most providers require participants to bring a laptop; a few provide software . . . Most do not
• There are 3 statistical software packages widely used for Six Sigma training:
1. Minitab (currently version 15) - $1,195
2. JMP (pronounced “Jump” – from SAS) - $1,595
3. SigmaXL (Excel add-in) - $249
• Specialization – some providers offer differentiated courses for finance, healthcare, IT,
manufacturing and service
• Training Project – courses which do not require participants to work on their own projects as part
of the course are not viewed favorably . . . Six Sigma proficiency requires practical application
(some courses provide simulations, but these are still considered sub-standard for certification
purposes)
• Certification - typically requires successful course completion, passing a certification exam, and
completion of at least one project (BB and MBB requirements are more extensive – see the
example on the next slide)
27
Typical Certification Requirements
Green Belt Black Belt
• Two completed, certified projects
• Minimum score of 80% on certification exam
• Mentor at least four projects to completion
• Mentor/Certification Board approval
• One completed, certified project
• Minimum score of 80% on certification exam
• Mentor/Certification Board approval
Master Black Belt
• Two completed, certified projects (in addition to GB, BB)
• Successful leadership of a program aligned to a business metric
• Minimum score of 80% on MBB certification exam
• Mentor at least ten projects to completion.
(Mentored projects must be led by different GBs and BBs, and are in addition to the projects mentored as a BB)
• Lead a Six Sigma discussion forum, or teach or develop a GB training module
• Mentor/Certification Board approval
28
Successful Belt Characteristics
Yellow Belts• Willing to serve as a contributing project team member
• Able to gather data for the team
• Willing to actively participate in brainstorming and other team tool
sessions
Green Belts
• Good project management skills, capable of directing team activities
according to a budget and schedule
• Able to successfully lead 1-2 projects/year within their current job
role
• Proficiency in graphical tools and basic statistics
Black Belts
• Capable of successfully leading 4-5 projects/year, typically in a full-
time process improvement role
• Comfortable and proficient in Six Sigma methodology and higher-
level statistical tools
• Good presentation skills
• Able to effectively coach and mentor multiple GBs simultaneously
• Methodology expert in Six Sigma, Lean, Change Management, Project
Management
• Expert in Six Sigma tools, software and statistics
• Capable of developing and delivering all levels of training
• Excellent coach and mentor
• Strategic focus; able to lead programs of multiple BB and GB projects
• Able to interact effectively with upper management and customers
Master Black Belts
29
Successful Deployment Characteristics
• The Quality organization reports directly into the CEO leadership team
• Six Sigma project selection flows down from the business strategy;
senior executives are responsible for project identification
• Belt candidates are formally screened and/or nominated for admission
to training
• Belt progression is reflected in formal HR career path documentation
• Dedicated mentors (MBBs, BBs) are available inside the organization
• Projects are formally tracked and reviewed at phase tollgates
• Belts are encouraged to participate in Best Practice Sharing sessions
• Certification is a big event
30
Resources
Websites:
www.asq.org
www.isixsigma.com
www.moresteam.com
Other References:
1. American Society for Quality (ASQ)
2. ‘The Power of Six Sigma’ – Subir Chowdhury (Dearborn Trade, 2001)
3. ‘The Goal’ – Eliyahu M. Goldratt (North River Press, 2nd Ed., 1992)
4. ‘Six Sigma’ – Mikel Harry and Richard Schroeder (Doubleday, 2000)
5. ‘The Six Sigma Way’ – Peter Pande, Robert Neuman, Roland Cavanagh (McGraw-Hill, 2000)
6. ‘Lean Thinking’ – James P. Womack and Daniel T. Jones (Simon & Schuster, 1996)
7. ‘Lean Six Sigma for Service’ – Michael L. George (McGraw-Hill, 2003)
31
Copyright 2010 CGM Associates, LLC – All Rights Reserved
PART 3:
Benefits and Value
Copyright 2010 CGM Associates, LLC – All Rights Reserved
Career Value
• Expanded business opportunities across companies
o 82% of Fortune 100 companies use Six Sigma
o 53% of Fortune 500 companies use Six Sigma*
• Cross-functional career paths within companies
o Concepts apply to all functions
o Expertise in Six Sigma creates functional bridges and career vistas
• Promotion potential within companies
o Effective problem-solvers are valued managers, executives
• Salary impact
− Belt level
− Black Belt – US average: $90,600 + $13,600 bonus **
− Master Black Belt – US average: $122,500 + $22,000 bonus**
− Certification
− 89% of Black Belts are „certified‟ (caveat emptor)
− 73% of Master Black Belts are „certified‟
* From iSixSigma magazine, Jan ‟07
** From iSixSigma magazine, Mar/Apr „1033
Copyright 2010 CGM Associates, LLC – All Rights Reserved
Personal Value
• The gift of choice
− Many applications, including non-profits
− Continuing evolution generates a huge
range of specialization possibilities
• The confidence to solve problems
− Fear of the unknown is minimized
− The roadmap is always the same
− This stuff works at home, too
• Respect
− Funny titles aren‟t laughed at any more
34
Copyright 2010 CGM Associates, LLC – All Rights Reserved
Closing
35
• Other Questions?
• Evaluation Form
Goodbye . . . And, Thank You!