Six sigma

SIX SIGMA

Introduction

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The need for SS, historical perspective

Philosophies; Deming, Juran & Ishikawa

What is Six Sigma, an overview

Knowledge based management;

Basic tools & techniques to obtain knowledge

Advanced tools and techniques to obtain knowledge

Main Topics

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What is Six Sigma; an overview

Six sigma is a statistically – based process improvement methodology that aims to reduce defects to a rate of 3.4 defects per million defect opportunities by identifying and eliminating causes of variation in business processes. In defining defects, Six Sigma focuses on developing a very clear understanding of customer requirements and is therefore very customer focused.

The Six Sigma methodology is based on a concept called DMAIC: Define, Measure, Analyze, Improve, and Control. The main core of Six Sigma methodology is the application of statistical and other analytical tools in the context of a well disciplined, easy to follow methodology.

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D Define Define the project goals & customer (internal & external) deliverables

M Measure

Measure the process to determine current performance

A Analyze Analyze & determine the root cause(s) of the defects

I Improve

Improve the process by eliminating defects

C Control Control future process performance

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Six Sigma is mainly focused on following two perspectives;

Quality perspective is focused to achieve an output of interest from a process must produce no more than 3.4 defects per million opportunities, where an opportunity is defined as a chance for nonconformance, or not meeting the required specifications.

Business results perspective is focused that waste generally called Cost of Poor Quality (COPQ) must be reduced in order to improve net profit margins 20 to 40 % or more.

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What is Six Sigma; an overview

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The Need for SS; historical perspective

Six sigma was developed by Motorola as a way to improve their quality in the mid-1980s, and became well known after GE’s Jack Welch made it a central focus of his business strategy in 1995. About 500 companies have started Six Sigma initiatives. It is the culmination of many years of work by some of the best minds in business and management.

Over the last several years, many industries and specific companies like Boeing, IBM, General Dynamics, Johnson & Johnson etc have had severe problems. As consequences of these problems, the companies had either to layoff or trim thousands of their workers / employees.

If we are to move forward, there needs to be sufficient emphasis on improved product and service quality. Quality improvement should be a critical part of any business strategy that is designed to generate maximum return on investment, ROI. If quality improvement is synonymous with better, faster and lower cost products and services, how can you not get return on investment?

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The study points out that Six Sigma quality efforts have shown significant achievements / improvements for;

reducing in-process defect levels

reducing wastes or COPQ

reducing the cost of manufacturing

increasing production / yield %

increasing stockholders’ share value

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<< Crestex Achievements >>

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Philosophies; selected quality gurus

Deming’s Fourteen Points:1. Create a consistency of purpose toward the improvement of

product and service. Consistently aim at improving the design of your

products.

2. Adopt a new philosophy of rejecting defective products, poor workmanship and inattentive service.

3. Do not depend on mass inspection because it is usually too late, too costly and ineffective.

4. Do not award business on price tag alone, but consider quality as well.

5. Consistently improve the system of production and service. Involve workers in this process, but also use statistical experts who can separate special causes of poor quality from common ones.

6. Institute modern training methods.

7. Institute modern methods of supervision. < Menu >

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8. Drive out fear. Great economic loss is usually associated with fear, when workers are afraid to ask the questions or to take a position.

9. Breakdown barriers among the functional areas. Teamwork.

10 Eliminate numerical goals, targets and slogans for your workforce. Setting the goals for other people without providing a plan on how to reach it is often counterproductive.

11 Eliminate work standards and numerical quotas.

12 Remove barriers that discourage the hourly workers from doing their job.

13 Institute a vigorous program from training and education. Education in simple, but powerful, statistical techniques should be required by all employees.

Knowledge based management is a an extension of the work by Juran, Demings and Ishikawa with a focus on the “HOWs”

Deming’s Fourteen Points:

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The Juran Philosophy

Like Deming, Joseph M. Juran spent a good bit of time in Japan during the

early 1950’s. Juran developed his philosophy and approach over many years

and in 1979, he founded the Juran institute.

Juran’s 10 steps

1. Build awareness of the need and opportunity for improvement.

2. Set goals for improvement.

3. Organize to reach the goals (have a plan and an organizational structure).

4. Provide training.

5. Carry out projects to solve problems,

6. Report progress.

7. Give recognition

8. Communicate results.

9. Keep score.

10. Maintain momentum by making annual improvement part of the regular system and process of the organization.

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The IshiKawa Philosophy

What must top management do?1. Study quality improvement ahead of anyone else in your company and understand the issues involved.

2. Establish the policies towards promoting quality improvement efforts-what the general attitudes will be.

3. Specify the priorities for implementing quality improvement and the short and long term goals.

4. Assume a leadership role in making quality improvement happen

5. Provide a means for educating the people

6. Check to see if quality improvement is implemented as planned

7. Make clear the responsibility of top management

8. Establish a system or cross functional management

9. Drive home the notion that the outputs from your process are inputs to your customers

10. Provide leadership towards making a “breakthrough”

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Introduction

Questions managers need to answer,

Questions managers need to ask.

Modern quality improvement paradigm,

Knowledge based management (KBM)

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Knowledge based management is an extension of the works of Deming, Juran, and Ishikawa.

Continuous learning leads to knowledge of customer requirements, products, and processes.

Which Steps have you taken?

Job Security

Long term Success

Return on Investment (improved bottom Line)

Quality Improvement (Better, Faster, Lower cost)

Knowledge

Knowledge Based Management Means, “TAKING THE RIGHT STEPS” < Menu >< Back >


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Questions managers need to answer1. What is your product or service and who are your customers?

2. What perception do your customers have of your product or service? How do you know?

3. Do you know quality issues are important for your company? Which ones?

4. What is the company’s current share of the total market? Can quality improvement initiative assist you in increasing the market share and/or increasing profits? How?

5. Are you actively pursuing quality improvement in your areas of responsibility? How?

6. How many hours have you scheduled that are devoted to the quality issue.

7. How often do you get feedback from the people you manage? What kind of feedback that is it? What do you do with that feedback?

8. What are the right quality-oriented questions managers need to ask their people. What methods and tools can be used to answer them?

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9. Are your people trained to use the best quality improvement tools? What is your ROI from training?

10. Do you have standard procedure for documenting quality improvement efforts? What is it?

11. What barrier your people face when trying to do quality improvement efforts? What are you doing to remove them

12. What matrices are you evaluated on, that relate to quality issues? Are you held accountable for these matrices? What are the specific improvement goals for these matrices?

13. How much waste does your company has? What in $ terms is the company’s Cost of poor quality (COPQ). How much of the total waste is your area responsible for.

14. One year from now what evidence will you have to show that you made a difference.

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Questions managers need to answer:


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Questions managers need to ask: 1. What processes (activities) are you responsible for? Who is the

owner of those process? Who are the team members? How well does the team work together?

2. Which processes have the highest priority for improvement? How did you come to this conclusion? Where is the data that supports this conclusion?

For those processes to be improved,

3. How is the process performed?

4. What are your process performance measures? Why? How accurate and precise is your measurement system?

5. What are the customer-driven specifications for all of your performance measures? How good or bad is the current performance? Show me the data. What are the improvement goals for the process?

6. What are all the sources of variability in the process? Show me what they are?


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7. Are any of the sources of variability supplier dependent? If so, what are they, who is the supplier, and what is being done about it?

8. What are the key variables that affect the average and variation of the measures of performance? How do you know this? Show me the data.

9. What are the relationships between the measures of performance and the key input variables? Do any key variables interact? How do you know for sure? Show me the data.

10. What setting for the key variables will optimize the measures of performance? How do you know this? Show me the data.

11. For the optimal settings of the key variables, what kind of variability exists in the performance measures? How do you know? Show me the data.

12. How much improvement has the process shown in the past six months? How do you know this? Show me the data.

13. How much time and/or money have your efforts saved or generated for the company? How did you document all of your efforts? Show me the data.

Questions managers need to ask:


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Modern quality improvement paradigm:Around the world all types of organizations have wrestled with how to make their products, services, and associated process performance better, faster, and at lower cost. The problem in our organizations is how to make it happen. Past attempts focused on reorganizing or chasing the “fad of the month.” The height of frustration comes with mandated or regulated supplier quality improvement requirements like ISO 9001, QS 9000, D1-9000, FDA’s process validation, and Quality Systems (QSR) etc. Many other industries have similar requirements or use the Malcolm Baldrige criteria for self evaluation. The puzzle appears to be getting more complicated and can cause people to give up in frustration.

This paradigm of letting regulations drive quality improvement is like the old saying, “ We have put the cart before the horse!A Modern Quality Improvement Paradigm


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The knowledge Based Management (KBM) paradigm has the cart and horse hitched together in a way that will get us safely and efficiently down the road to success.

KBM Paradigm for Quality Improvement

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A Modern Quality Improvement Paradigm

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SUCCESS


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Process flow diagram (Flow Chart) Cause and Effect Diagram Affinity Diagram Benchmarking Common Sense Failure Mode and Effect Analysis (FMEA) Input-Process-Output (IPO) Diagram Quality Function Deployment Nominal Group Technique Pareto Chart Scatter diagram Run Chart Histogram Measures of Central Tendency Measures of dispersion Process Capability Measurements Control Chart Design of Experiment (DOE)


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Basic tools & techniques to obtain knowledgeProcess Flow Diagram

Is a visual representation of all the major steps and decision points in a process. It helps us understand the process better, identify critical or problem areas, and identify where improvement can be made. < Example >

Cause and Effect Diagram with CNX

Is a graphical representation of the relationship between a given response and the factors that influence this response. It helps us to identify, display, and examine possible causes of any observed condition. Other names are; Ishikawa, fishbone, tree, and river diagram. < Example >

Affinity Diagram

Is a technique used to cluster related items into a more general group. It helps us to organize verbal information into a visual pattern. Unlike the cause and Effect diagram where we move from the general categories to the more specific, an affinity diagram starts with specific ideas and helps us work toward broader categories, each of which contains several of the more specific ideas. <Example>

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Basic tools & techniques to obtain knowledgeBenchmarking

Benchmarking involves gathering information on “best” practices. It helps to provide us with knowledge of the following: who the industry leaders are, how we are doing compared to industry leaders, and what our priorities are for process improvement.

Common Sense

It may be defined as “good judgment” or “critical thinking” but actually it is a combination of certain traits that someone with common sense should demonstrate. < Example > Failure Mode and Effect Analysis (FMEA)

Is a procedure used to identify and assess risks associated with potential product or process failure modes. FMEA is generally accomplished early in the design phase of a new product or process or when design changes occur. < Example > < Back >

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Input-Process-Output (IPO diagram)

Is a visual representation of a process or activity. It lists input variables and out put characteristics. It helps us in defining a process and recognizing the relationships between input variables and responses. < Example >

Quality Function Deployment (QFD)

Is a systematic process used to integrate customer requirements into every aspect of the design and delivery of the products and services. It helps us to provide a structure for identifying those design characteristics that contribute most (and least) to customer requirements.

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Nominal Group Technique

Is a structured method used to generate and rank order a list of ideas. It helps to prioritize a list of items. < Example >

Pareto Chart

Is a bar chart for non-numerical categories that rank orders the bars from highest to lowest. It is based on “Pareto Principle” that says that 80% of the effects are due to 20 % of the causes. It helps us to identify the “Heavy hitters”. <Example>

Scatter Diagram

Is a graphical display of a set of points or ordered pairs. It helps us to visually study the relationship between two variables. <Example>

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Run Chart

Is a graphical tool that turns data into information. It helps us to show changes in a process measure overtime. Variation in the data as well as trends and shifts in the process measure are easily seen. < Example >

Histogram

A histogram is a bar chart for numerical variables. It gives pictorial representation of how the data are distributed. It helps us for visualizing the central tendency and variability of a data set.

Measures of central tendency

The two most common measures of central tendency are Mean and Median. < Example >

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Measures of dispersion

The three common measures of dispersion are the Range, the Variance, and the standard deviation. < Example >

Process capability measurements

Are used to describe the capability of a process. There are three matrices that are used for this purpose, and most are calculated under the assumption that the critical measurements are normally distributed. The metrics dpm, Cp, and Cpk, all give a numerical value that indicates how well the process is doing with respect to these specification limits.

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Statistical Process Control (SPC)

Design of Experiments (DOE)

Advanced tools & techniques to obtain knowledge

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Control Chart

A control chart is just a run chart which includes statistically generated upper and lower control limits. Control limits are not specification limits or objectives, but are reflections of the natural variability of the process. Several types of control charts have been developed to analyze variables and attribute data. However, all control charts have the same basic purpose:

to provide evidence of whether a process has been operating in a state of statistical control and to signal the presence of special causes of variation so that corrective action can be taken.

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Design of experiments, DOE

To understand DOE, we must have a good understanding of the term process. In a general sense, a process is an activity based upon some combination of inputs (factors), such as people, material, equipment, policies, methods, and environment, which are used together to generate outputs (responses) related to a product, service, or task. < Example > In conducting a design of experiment, we will purposefully make changes to the inputs (or factors) in order to observe corresponding changes in the outputs (or responses). The information gained from DOE helps us to improve performance characteristics, to reduce costs and time associated with product development, design and production, and to optimize the process.

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Achievements / improvements through Crestex Six Sigma quality efforts;

Achievement Target saving To date saving

S6 Yield Incrs 1% $ 95,675 $ 68,441

Stores Inv Rdctn 15% $ 3,00,000 $ 1,60,000

PG Oprtng Cst Rdctn $ 50,000 $ 4,753

Spare Parts Inv Rdctn 20% $ 50,000 $ 29,649

H Tx Yield Incrs 1% $ 1,20,000 $ 80,385

Proc Fab Rejtn Rdctn 1% $ 2,52,632 $ 92,233

Lm Eff Incrs 1%

Lightng Cst Rdctn 10.7% $ 50,000 $ 19,000

Total $ 9,18,307 $

4,54,461


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PROCESS

A Blending of Inputs to

Achieve the Desired Outputs

INPUTS

PeopleMaterialEquipment

PoliciesProceduresMethodsEnvironment

OUTPUTS

Perform a service

Produce a product

Complete a task

General Diagram of a Process

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Billing

Process

INPUTS

Data entry method

Amount of personnel training

Method for obtaining bill information

OUTPUTS

Time to complete a bill

Number of errors/bills

Billing Process Diagram

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Machining

Process

INPUTS

Drill feedrate

Drill speed

Material hardness

Type of coolant

OUTPUTS

Inner diameter (I.D.)

Outer diameter (O.D.)

Machining Process Diagram

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Profits

Total Cost to Produce or Provide

Profits

Total Cost to Produce or Provide

Maintaining Profits in highly competitive Environments

Profits

Waste(COPQ)

Theoretical Costsi.e,Cost of Doing the right things right the first time

Profits

Waste(COPQ)

Theoretical Costsi.e,Cost of Doing the right things right the first time

Profit

Waste(COPQ)

Theoretical

Costs

Profit

Waste(COPQ)

Theoretical

Costs

Profit

COPQ

Theoretical

Costs

Profit

COPQ

Theoretical

Costs

Total product or service price to customers

Budget constraints and competition drive a lowered price

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Thanks for Thanks for attention!attention!

Six sigma

Business

quality improvement

sigma quality efforts

service quality

sigma methodology

quality gurusdemings

overviewsix sigma

sigma initiatives

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