Six Sigma for Beginners- Yellow and Green Belt

Six Sigma Concepts for Beginners (Yellow and Green Belt level)

Rajiv Kumar Tiwari

CONTENT

• Origin Of Six Sigma

• Overview Of Six Sigma

• Six Sigma Goals

• Basic Quality Concepts

• DPU & DPMO

• Cost of Quality – Impact on Sigma Level

• Seven Tools of Quality

• Six Sigma Components

• Project Selection

Origin of Six Sigma

1987 Motorola Develops Six Sigma

Raised Quality Standards

Other Companies Adopt Six Sigma

GE, Dow Chemical, Dupont, Honeywell, Whirlpool

Dr Mikel J Harry wrote a paper relating early failures to quality

19921987

1985

MotorolaAllied Signal

1995

General Electric

2002

Johnson & Johnson

Ford

Nissan

Honeywell

Current Leadership Challenges

Delighting Customers

Reducing Cycle Times

Keeping up with Technology Advances

Retaining People

Reducing Costs

Responding More Quickly

Structuring for Flexibility

Growing Overseas Markets

Six Sigma— Benefits?

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.

• Motorola:

– 5-Fold growth in Sales

– Profits climbing by 20% pa

– Cumulative savings of $14 billion over 11 years

• General Electric:

– $2 billion savings in just 3 years

– The no.1 company in the USA

• Bechtel Corporation:

– $200 million savings with investment of $30 million

Overview of Six Sigma

It is a PhilosophyAnything 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

Management involvement?

Executives and upper management drive the effort through:

Understanding Six Sigma

Significant financial commitments

Actively selecting projects tied to strategy

Setting up formal review process]

Selecting Champions

Determining strategic measures

Six Sigma Goals

Reduce defects

Eliminate Wasteful practices

Delight Internal & External Customer

Fitness for use (Juran principle)Component said to possess good quality if they work well in equipment for which they

are meant

Quality Characteristics Appearance

Performance

Reliability

Taste

Maintainability etc

Voice Of Customer

Basic Quality Concepts

Quality is customer satisfaction, aimed at meeting:

Stated needs (Satisfiers) – Videos & Internet Facility in Cellphone

Unstated needs (Dis-Satisfiers) – Calling, SMS

Expectations (Delighters) – 100 free audio songs

CTQ - Measure of “What is important to Customer”

6 Sigma projects are designed to improve CTQ

Derived from VOC

Examples:

Waiting time in clinic

Spelling mistakes in letter

% of valves leaking in operation

Process Approach

A Process is a group of steps, tasks, or activities, which take inputs (People, Material,

Information …..) and in some way change them to produce an output (Service, Product……)

Transformation

(Using Resources & Management of Activities)X1, X2, X3….Xn Output (Y)

Controllable (& Measurable) Factors

Non Controllable (Measurable or Not measurable) Factors

Inputs

If we understand X1, X3, X4 are causes, why do we constantly test Y

Y X1, X2, X3,……Xn

Dependent variable Independent Variable

Output Input & Controllable factors

Effect Causes

Sympton Problem

Monitor Monitor

Achieving Process Improvement

What we need?

Identify Measurable Outputs – CTQs

Identify Measurable & Controllable inputs/factor that affect CTQs - CTPs

Assign a owner to the Process – Process Owner

Ensure every step in process Adds value – Reduce Waste

How We Achieve?

Reduce Error – Increase Effectiveness

POKA YOKE :

RCO – Reduce chances of Occurrence – e.g. Microwave will shut down the moment we open the door

ICD – increase chances of detection – e.g. Alarms & Signals

Reduce Waste – Increase efficiency

Remove processes that's not adding value to CTQs

Use less resources

Defective - A non-conforming unit

Defect - A non-conformance on any of quality characteristics of a unit that may led to customer dissatisfaction. Defect does not necessarily make the unit defective

E.g. - Design issues in jewellary

DPO & DPMO

Defect Per Unit (DPU) – No. Of defects in a given unit of product or process

DPU = No. Of Defects detected (at given review point) / No. Of units processed at that review point

Defect Per Opportunity (DPO) - Circumstances in which CTQ can fail to meet

E.g. - A units has 5 parts, and in each part there are 3 opportunities of defects –

Total defect opportunities are 5 x 3 = 15

Defect Per Million Opportunity (DPMO) - DPO multiplies by 1 million

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

DPU = Defects detected / no. of units = 2 / 10 = 0.2

DPO = DPU/ (Defect Opportunity *No. Of Units) = 2 / (15 x 10) = 0.0133333

DPMO = DPO * 1 million = 0.013333333 x 1,000,000 = 13,333

Defects, Units & Opportunities

Every process should have definitions for defect, unit and Opportunity

HOW TO IDENTIFY ?

Start with Customer1. Understand the need of your customer (VOC)

2. From VOC identify the critical to Quality – a product or service characteristics that must be met to satisfy a customer requirement

Define Product/Service Defects – Any part of product or service that:1. Does not meet customer specifications or requirements

2. Causes customer dissatisfaction

3. Does not fulfil functional or physical requirements

Define your Product/Service Units:1. Measurable and Observable output of your business process

2. For product – must be seen as physical unit

3. For Service – Must have a specific start and end point

Define your Product/Service Opportunities for error1. Total number of chances per unit to have a defect

2. Each opportunity must be independent of other

3. It must be directly related to CTQs

DPMO & Sigma Level

Six Sigma performance is 3.4 DPMO

Sigma Level DPMO %Defects

One Sigma 690,000 69.0%

Two Sigma 308,000 30.8%

Three Sigma 66,800 6.68%

Four Sigma 6,210 0.62%

Five Sigma 230 0.023%

Six Sigma 3.4 0.0003%

COPQ (Cost of Poor Quality/Defects)

- Lost Opportunities

- The Hidden Factory

- More Setups

- Expediting Costs

- Lost Sales

- Late Delivery

- Lost Customer Loyalty

- Excess Inventory

- Long Cycle Times

- Costly Engineering

Changes

Average COPQ

approximately 15% of Sales

Hidden Costs:

Intangible

Difficult to Measure

Traditional Quality Costs:

Tangible

Easy to Measure

- Inspection

- Warranty

- Scrap

- Rework

- Rejects

7 Tools of Quality

Flow Chart

Check Sheet

Pareto Chart

Histogram

Cause & Effect (Ishikawa/Fishbone diagram)

Scatter Diagram

Control Chart

Note: Pareto Chart and Cause & Effect Diagram are widely used tools

Tools of Quality

Flow Chart:

Describe a process in as much detail by graphically displaying the steps in proper

sequence

How it helps in Six Sigma ?

By Identifying critical process points that need to be controlled so that suitable appraisals

and preventions can be added

Checking the value additions provided by each step in the process

Start/Finish Activity/Operation Decision

Link to ext

activity

A Document

Tools of Quality – Flowchart

A Typical Flow Chart

START

Customer Applied for Loan

Application Form Validated

Information

provided

Valid?

Sent to Audit depart for eligibility check

Eligible for

Loan?

Application Form Rejected

Loan Rejected

No

Yes

Yes

Loan Granted

Check Sheet:

It’s a data collecting device

How it Helps in Six Sigma ?

Organizing the data by category

Shows how many time each value occurred

Setting priorities based on results shown on the check sheets

Tools of Quality – Check sheet

Pareto Chart:

Identify the factors which have greater effect on Service delivery challenges

How it Helps in Six Sigma ?

Using 80:20 principle help user to focus on few important factors in a process

known as vital few

Example of Pareto

Tools of Quality – Pareto Chart

Histogram:

Displays the frequency of distribution of continuous/variable data

How it Helps in Six Sigma ?

Provides a view of data distribution in a process

0

0.5

1

1.5

2

2.5

3

3.5

Freq

uenc

y

Students Performance

Tools of Quality – Histogram

Measures of Central Tendency Mean = Provides the average of a data set

Median = midpoint of the distribution of the data i.e. 50 % above and 50 % below

Mode = Range with maximum observations

Range – (Xmax – Xmin) = spread of the distribution

Standard Deviation – Measure the variation in process represented by Greek letter б

Tools of Quality – Central Tendency

How it Helps in Six Sigma ?

When mean median and Mode are closer to each other it represent less variation in process

If bars are more spread out that means variation is high

More than one Mode represent presence of another distribution imposing on main distribution

and need to be investigated

Cause & Effect (Fishbone) Diagram – ISHIKAWA

Provides a scope to brainstorm and identify failure areas related to 5 M’s

Men Money Machine

MaterialMethodEnvironment

Drunk Driving

Lack of Accident

proof mechanism

Signal failure

Railway TracksProper regulating

mechanism

Bad Weather

Obstruction on

Tracks

Rail Accidents

How it Helps in Six Sigma ?

Most Effective tool for brainstorming

Mapping of failures against 5 M’s

Tools of Quality – Cause & Effect Diagram

Co-Relation Diagram/Scatter Diagram

How it helps in Six Sigma ?

To Find Critical parameters in ProcessY: dependent Variable

Xs (X1, X2, X3 …….Xn): Independent Variable

Scatter diagram is drawn to see the kind of

relationship of Y with each of the Xs i.e. X1, X2, X3,

X4……Xn)If Y increases as X1 increases, it’s a positive Co-relation

If Y decreases as X1 increases, it’s a negative Co-relation

Coefficient of Co-relation – denoted by ‘r’

a) If r>0.7 – Strong Co-relation – CTP

b) If r>=0.3 & r<=0.7 – Weak Co-relation – Not CTP

c) If r<0.3 – No Co-relation – Not CTP

Tools of Quality – Co-relation/Scatter Diagram

Tools of Quality – Co-relation/Scatter Diagram

Control Charts:

Displays statistically determined upper and lower limits drawn on either side of

process average.

Limits are:

Upper control Limit = X + 3σ

Lower Control Limit = X - 3σ

How it helps in Six Sigma?

It reveals whether the data is within upper and lower control limit. If it is then the process is

said to be in Control

It also can sense likelihood of process to go out of control.

Upper & Lower control limit must remain within the Upper Specification limit AND Lower Specification Limit, generally provided or

agreed with Customer

Tools of Quality – Control Charts

Characteristics of any process are dependent on 2 elements

Mean i.e. X

Standard Deviation i.e. σ

Calculating process Capability: Cp

a) Specification Width (SW) = USL-LSL

b) Process Width (PW) = UCL – LCL

= (X + 3σ) – (X - 3σ)

= 6σ

C) Process Capability index:

Cp = SW/PW = SW/6σ

Process is capable only is Cp>1

Control Charts

Tools of Quality – Control Charts

Causes Of Variation

Non-Assignable/Inherent Assignable/Special

Acceptable Variation

If UCL , LCL inside USL &

LSL

UnAcceptable Variation

If data point outside UCL

LCl

Need breakthrough

improvement

Corrective Action required

(By Employees)

Process Power People Power

Approach

Pra

ctica

l

Pro

ble

m

Sta

tistica

l

Pro

ble

m

Sta

tistica

l

So

lutio

n

Pra

ctica

l

So

lutio

n

DMAIC - simplified

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

DMAIC approach

M

Measure

A

Analyze

I

Improve

C

Control

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

D

Define

Define

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

VoC - 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

Key Output:

Project Charter

SIPOC

Measure

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 ?

D

Define

M

Measure

A

Analyze

I

Improve

C

Control Key Output:

Sigma Level

Pareto/Correlations

Analyze

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

D

Define

M

Measure

A

Analyze

I

Improve

C

Control Key Output:

Control Chart

Fish Bone

SWOT Analysis

Improve

Present recommendations to process owner.

Pilot runFormulate 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

Key Output:RecommendationsTested Solutuions

Control

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

D

Define

M

Measure

A

Analyze

I

Improve

C

ControlKey Output:

Sigma Level achieved

Documentation

People Power

Tell me, I forget.

Show me , I remember.

Involve me, I understand.

6 s Training

Master

Black Belt

Black Belts

Green Belts

Team Members /

Yellow Belts

Ch

am

pio

ns

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.

Ch

am

pio

ns

Champion

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

Master Black Belt

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 (e.g.,

advanced statistical analysis, project management, communications,

program administration, teaching, project coaching)

Identifies high-leverage opportunities for applying the Six Sigma

Basic Black Belt training

Green Belt training

Coach / Mentor Black Belts

Master

Black Belt

Black Belt

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

Black Belts

Green Belt

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

Green Belts

Yellow Belt

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

Team Members /

Yellow Belts

Sources of Projects

External Sources:

Voice of Customer

What are we falling short of meeting customer needs?

What are the new needs of customers?

Voice of Market

What are market trends, and are we ready to adapt?

Voice of Competitors

What are we behind our competitors?

Internal Sources:

Voice of Process

Where are the defects, repairs, reworks?

What are the major delays?

What are the major wastes?

Voice of Employee

What concerns or ideas have employees or managers raised?

What are we behind our competitors?

What Qualifies as a Six Sigma Project

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.