Six Sigma Management slides

• 1. Six Sigma Overview The Pennsylvania State University Frank L. Chelko October 9, 2006

2. Six Sigma

• A rigorous, focused and highly effective implementation of proven quality principles and techniques that aims for virtually error free business performance.

3. Further Defined?

• A statistical approach to problem solving

• A management culture

• A way of thinking

• A set of new behaviors

• Synonymous with:

• • Improving quality

• • Reducing cost

• • Improving customer loyalty/customer satisfaction

• • Achieving bottom-line results

4. The Six Sigma Methodology

• Six Sigma is a structured, DATA DRIVEN management methodology that can be applied to all aspects of business.

• The application of this methodology eliminates the use of opinion -I think and I feel- and drives the organization to a more scientific means of decision-making.

• Six Sigma isnota statistics program. Statistics are used solely as tools for interpretation and clarification of data.

5. Six Sigmas Modern Evolution

• 1980

• • Established by Motorola in response to foreign competition and Baldridge Quality Award goal.

• 1990s

• • Focus on process improvement using statistical tools.

• 2005

• • Lean Six Sigma combines the structured management methodology and problem solving tools of Six Sigma with the business strategy, objectives and goals of Lean Enterprise.

6. The Business Experience

• Reduced cycle times, defects and costs

• Reduction/elimination of waste

• Improved productivity and efficiency

• Measurable financial results

• Increased product quality and reliability

• Significant improvement in customer satisfaction!

• Directly supportsWorld Classperformance goals.

7. Cost Benefit 1996 Cost Benefit 1997 Cost Benefit 1998 Cost Benefit 1999 Cost Benefit 2000 GE Resultsfrom 6 Sigma $3.5B $3.4B Cost Benefit 2001 $3.4 Billion in 2001 Customers & Shareholders Love It! $ in Millions Unless Otherwise Stated $600 $500 $450 $380 $200 $2.5B $1.2B $700 $170 6 Sigma Cost 6 Sigma Productivity Delighting Customers $500 $3.0B $600 $2.5B $900 8. The Business Experience

• *Six Sigma is currently active in over 80% of Fortune 500 companies.

• * Masset, LLC Consulting

• Motorola

• Johnson & Johnson

• Honeywell

• TRW

• Merrill Lynch

• Xerox

• McKesson

• Sony

9. Management and Project Support Executives Senior DeploymentChampion DeploymentChampion ProjectChampion Process Owner Finance Champion Information Technology Champion Human Resources Champion 10. Management and Project Support

• Executives

• • Create the Six Sigma vision and company environment.

• • Define strategic and business goals.

• Senior Deployment Champions

• • Day-to-Day management of Six Sigma throughout the business.

• • Reports to and updates the executives on the progress of deployment.

• • Liaison between the executives and deployment champions.

• Deployment Champions or Sponsors

• • Responsible for the deployment of Six Sigma within the division or business unit.

• • Facilitates the identification and prioritization of projects assuring alignment with the business goals.

• • Establishes and executes training plans.

• • Selects the project champions.

• • Removes barriers for the project team.

11. Management and Project Support

• Project Champion

• • Selects and mentors the Black Belts

• • Leads in project identification, prioritization, and defining the project scope.

• • Removes barriers for Black Belts and aligns resources.

• Process Owner

• • Is a team member

• • Takes ownership of a project when it is complete

• • Responsible for maintaining the projects gain

• Finance Champion

• • Estimates and certifies project savings

• • Works with deployment champions to identify potential project opportunities.

• • Assigns a finance representative on to each project team.

• Information Technology Champion

• • Insures computer and software resourcing.

• • Works with project teams to access data from existing databases

• HR Champion

• • Works with Black Belts to develop a MBB, BB, and GB selection process.

12. Six Sigma Roles and Responsibilities 13. Yellow Belt Green Belt Black Belt MBB

• DataCollection Experts

• Assist in Measure & Control .

• Part-Time 6 Sigma Leaders

• Run Mini 6 Sigma Projects

• Full or Part Time 6 Sigma Leaders

• Manage 6 Sigma Projects

• Instruct & Train GBs & YBs

• Full Time 6 Sigma Leaders

• Manage BB Projects & Plant 6 Sigma

• Run 6 Sigma Projects

• Instruct & Train BB, GBs, & YBs

Six Sigma Project Teams define Measure Analyze Improve Control 14. Belt Structure Green Belts: Lead and execute process-level improvement projects.Yellow Belts: Entry Level team member. Understandsthe fundamentals of Six Sigma. Data collection. 15. Belt Structure Master Black Belts: Successfully completed 20 ormore Six Sigma projects. Black Belts: Implement the principles, practices, andtechniques of Six Sigma for maximumcost reductions.(Lead the project teams) 16. The Methodologies 17. Six Sigma Methodologies D efine M easure A nalyze I mprove C ontrol DMAIC(dee-may-ic) Improvement Model: D efine M easure A nalyze D esign V erify DMADV(dee-mad-v) (Re)Design Model: 18. Six Sigma Methodologies D efine M easure A nalyze I mprove C ontrol DMAIC(dee-may-ic) Improvement Model: D efine M easure A nalyze D esign V erify DMADV(dee-mad-v) (Re)Design Model: 19. The DMAIC Model At the heart of Six Sigma is a systematic method foranalyzingandimprovingbusiness processes calledDMAIC . The model includesfiveelements: D efine opportunities M easure performance A nalyze opportunity I mprove performance C ontrol performance 20. DMAIC and DMADV By Thomas Pyzdek Copyright 2003 by Thomas Pyzdek, all rights reserved. Reproduction permitted providing copyright notice remains intact. For more information visithttp://www. pyzdek .com . The tools of Six Sigma are most often applied within a simple performance improvement model known as Define-Measure-Analyze-Improve-Control, or DMAIC. DMAIC is summarized in Figure 1. DMAIC is used when a projects goal can be accomplished by improving an existing product, process, or service. Figure 1Overview of DMAIC Define What is the business case for theproject? Identify the customer Current state map Future state map What is the scope of this project? Deliverables Due date Measure What are the key metrics for thisbusiness process? Are metrics valid and reliable? Do we have adequate data on thisprocess? How will I measure progress? How will I measure project success? Analyze Current state analysis Is the current state as good as theprocess can do? Who will help make the changes? Resource requirements What could cause this change effort tofail? What major obstacles do I face incompleting this project? Improve What is the work breakdownstructure? What specific activities are necessaryto meet the project's goals? How will I re - integrate the varioussubprojects? Control During the project, how will I controlrisk, quality, cost, schedule, scope,and changes to the plan? What types of progress reports shouldI create? How will I assure that the businessgoals of the project wereaccomplished? How will I keep the gains made? Next Project Design for Six Sigma Project Framework Another approach, used when the goal is the development of a new or radically redesigned product, process or service, is Define-Measure-Analyze-Design-Verify, or DMADV. DMADV is part of the design for Six Sigma (DFSS) toolkit. Figure 3Overview of DMADV Figure 4 illustrates the relationship between DMAIC and DMADV. Figure 4DMADV and DMAIC Next Project D Definethe goals of the improvement activity. The most important goals are obtained from customers. At the top level the goals will be the strategic objectives of the organization, such as greater customer loyalty, a higher ROI or increased market share, or greater employee satisfaction. At the operations level, a goal might be to increase the throughput of a production department. At the project level goals might be to reduce the defect le