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Six Sigma Overview - What is Six Sigma?

Jan 19, 2016

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Page 1: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

-6 -4 -2 0 2 4 6

Six Sigma OverviewSix Sigma Overview- What is Six Sigma?- What is Six Sigma?

Page 2: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 3: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 4: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma Includes…Six Sigma Includes…

Master Black Belts, Black Belts, Green Belts

Training

Sponsors/Champions

Business Process Council

Rewards, Recognition, Promotions, Bonuses:NOT OPTIONAL!

Change Acceleration

Teams

DASHBOARDS that Drive to Achieve Strategy

Sigma Calcs

ACTIVELeadership

StrategyProcessesProjects

Six Sigma can seem overwhelming! What IS 6?

DOE

DMAIEC

DFSS

Lean Sigma

Page 5: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSigma Is a Measure of Process Capability...Sigma Is a Measure of Process Capability...

…that focuses on the average and variation of the output.

Sigma

123456

DPMO

680,000298,00067,000

6,0004003.4

CustomerRequirement

12

3

45

6

DPMO – Defects per Million Opportunities

Page 6: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltImportance of Reducing VariationImportance of Reducing Variation

To increase a process performance, you have to decrease variation

Less variation provides

� Greater predictability in the process

� Less waste and rework, which lowers costs

� Products and services that perform better and last longer

� Happier customers

Defects Defects

Too early Too late

Delivery Time

Reduce variation

Delivery Time

Too early Too late

Spread of variation too wide compared

to specifications

Spread of variation narrow compared to

specifications

Page 7: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltWhat Is the Goal?What Is the Goal?

Six Sigma is about satisfying customer needs profitably

From GE Capital’s Six Sigma Vision

Page 8: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

Six SigmaSix SigmaSix SigmaSix Sigma

Desig

n Fo

r Six

Sig

ma

DMAIEC

Process Management

Improve existing processes so that their outputs meet

customer requirements

Control and Manage cross-functional processes to meet business goals

Design new products and processes that meet customer needs

Six Sigma’s MethodologiesSix Sigma’s Methodologies

Alignment & Linkage to Business Strategy & Transformation Objectives

Page 9: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltHow Can Six Sigma Help Us?How Can Six Sigma Help Us?

Provides a standard toolkit to improve business processes

Makes processes transparent, manageable

Enables fact-based decision making

Provides a platform for profitable growth

Aligns organizational and process goals

Helps establish customer focus

Establishes a common language

Page 10: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 11: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltWhat Is Sigma?What Is Sigma?

Sigma is the scale that compares the output of a process to customer or design specifications.

70 80 90 95 100

FR

EQ

UE

NC

Y

Dimension

Getting better requires reducing the variation andGetting better requires reducing the variation andmoving the average away from the spec limit.moving the average away from the spec limit.

Getting better requires reducing the variation andGetting better requires reducing the variation andmoving the average away from the spec limit.moving the average away from the spec limit.

70 80 90 95 100

FR

EQ

UE

NC

Y

Dimension

Customerspec

Customerspec

Page 12: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSigma AdvantagesSigma Advantages

Which process is performing best?

PROCESS PERFORMANCE

Call servicing 32 seconds vs goal of 35

Manufacturing Cable 98% defect free

Accounts Receivable 33 days average aging vs goal of 40

Customer Service 82% rated 4 or 5 on responsiveness

The Sigma Scale provides a common metric for comparison.The Sigma Scale provides a common metric for comparison.The Sigma Scale provides a common metric for comparison.The Sigma Scale provides a common metric for comparison.

Page 13: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

Percent

93% 3.0

98% 3.5

99% 4.0

99.87% 4.5

99.9997% 6.0

DPMODPMO

66,800

22,700

6,210

1,350

3.4

Sigma AdvantagesSigma Advantages

99% seems outstanding; but 6,210 DPMO reveals 99% seems outstanding; but 6,210 DPMO reveals significant room for improvement. significant room for improvement.

99% seems outstanding; but 6,210 DPMO reveals 99% seems outstanding; but 6,210 DPMO reveals significant room for improvement. significant room for improvement.

Page 14: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltCalculating the “Sigma Level” Calculating the “Sigma Level”

“Counting Defects” Approach: A packaging process is required to put at least 5 kg. of fertilizer in each bag.

In addition, the fill date must be stamped on the bag. Last weeks performance:

� Bags produced (units) – 10,000

� Under-filled bags – 62

� Fill dates missing – 21

� Number of defect opportunities - 2 Sigma Calculation:

415010000,102

2162

10..

6

6

DPMO

unitsnooppsno

defectsDPMO

From Sigma Table:

Sigma Level ~ 4.1

Page 15: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSigma Conversion TableSigma Conversion Table

Long-Term Process Yield (%)

Short-Term Sigma

DPMO

6.68 0 933,193

8.08 0.1 919,243

9.68 0.2 903,199

11.51 0.3 884,930

13.57 0.4 864,334

15.87 0.5 841,345

18.41 0.6 815,940

21.19 0.7 788,145

24.20 0.8 758,036

27.43 0.9 725,747

30.85 1 691,462

34.46 1.1 655,422

38.21 1.2 617,911

42.07 1.3 579,260

46.02 1.4 539,828

50.00 1.5 500,000

53.98 1.6 460,172

57.93 1.7 420,740

61.79 1.8 382,089

65.54 1.9 344,578

69.15 2 308,538

72.57 2.1 274,253

75.80 2.2 241,964

78.81 2.3 211,855

81.59 2.4 184,060

84.13 2.5 158,655

86.43 2.6 135,666

88.49 2.7 115,070

90.32 2.8 96,801

91.92 2.9 80,757

93.32 3 66,807

94.52 3.1 54,799

95.54 3.2 44,565

96.41 3.3 35,930

97.13 3.4 28,716

97.73 3.5 22,750

98.21 3.6 17,864

98.61 3.7 13,903

98.93 3.8 10,724

99.18 3.9 8,198

99.38 4 6,210

99.53 4.1 4,661

99.65 4.2 3,467

99.74 4.3 2,555

99.81 4.4 1,866

99.87 4.5 1,350

99.90 4.6 968

99.93 4.7 687

99.95 4.8 483

99.97 4.9 337

99.98 5 233

99.98 5.1 159

99.989 5.2 108

99.9927 5.3 72

99.9951 5.4 48

99.9968 5.5 32

99.9979 5.6 21

99.99866 5.7 13

99.99914 5.8 8.5

99.99946 5.9 5.4

99.99966 6 3.4

Page 16: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltCalculating the “Sigma Level” Calculating the “Sigma Level”

When Process Data is Continuous: A packaging process is required to put at least 5 kg. of fertilizer in each bag. Last weeks performance:

� Bags produced (units) – 10,000

� Mean Fill Weight: 5.1 kg.

� Standard Deviation of Fill Weight: 0.03 kg. Sigma Calculation:

33.303.0

0.51.5

s

LSLXZ

“Short-Term Sigma Level

Page 17: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

PRACTICALPRACTICALPROBLEMPROBLEM

PRACTICALPRACTICALSOLUTIONSOLUTION

In some cases, effective . . . But can result in fire fighting and in In some cases, effective . . . But can result in fire fighting and in recurring problems.recurring problems.

In some cases, effective . . . But can result in fire fighting and in In some cases, effective . . . But can result in fire fighting and in recurring problems.recurring problems.

NEXT PROBLEMNEXT PROBLEM

Attacking Problems—Pre-Six SigmaAttacking Problems—Pre-Six Sigma

Page 18: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltThe Six Sigma Way to Attack ProblemsThe Six Sigma Way to Attack Problems

NEXT PROBLEMNEXT PROBLEMNEXT PROBLEMNEXT PROBLEM

STATISTICALSTATISTICALSOLUTIONSOLUTION AnalyzeAnalyze

PRACTICALPRACTICALSOLUTIONSOLUTION

IdentifyIdentify

PRACTICALPRACTICALPROBLEMPROBLEMDefineDefine STATISTICALSTATISTICAL

PROBLEMPROBLEM MeasureMeasure

ControlControl

What Factors Drive Performance?

How Can We Prevent Problem Reoccurrence?

What Factors Drive Performance?

How Can We Prevent Problem Reoccurrence?

ExecuteExecute

Page 19: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltThe Power of the DMAIEC . . .The Power of the DMAIEC . . .

Common language and synergy Common language and synergy of employing a standard of employing a standard improvement approachimprovement approach

Common language and synergy Common language and synergy of employing a standard of employing a standard improvement approachimprovement approach

• DoE• Regression• ANOVA• t-tests• Process Analysis

Analyze

• Charter• VOC• SIPOC• CE Matrix

Define• Data Collection Plan• Gage R&R• Control Chart• Capability Analysis

Measure

• Select Solutions• Risk Analysis

Improve

• QC Chart• Documentation• Monitoring

ControlNot just an assortment of tools, but what to do at Not just an assortment of tools, but what to do at each step of the improvement process. each step of the improvement process.

Not just an assortment of tools, but what to do at Not just an assortment of tools, but what to do at each step of the improvement process. each step of the improvement process.

• Planning • Piloting• Planning• Implementation

Execute

Page 20: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltThe DMAIEC Way to Attack ProblemsThe DMAIEC Way to Attack Problems

PRACTICALPRACTICALPROBLEMPROBLEM

DEFINE:DEFINE:We are not consistently achieving “Ready for Control” (Y). We are not consistently achieving “Ready for Control” (Y).

STATISTICALSTATISTICALPROBLEMPROBLEM

MEASURE:MEASURE:There was a lot of variation in “Y” - poor performance (RFC = There was a lot of variation in “Y” - poor performance (RFC = 35%, 1.135%, 1.1). Determined RFC was a function of (1) boiler tube ). Determined RFC was a function of (1) boiler tube failures, (2) excessive cooldown (previous shutdown), (3) failures, (2) excessive cooldown (previous shutdown), (3) turbine first-stage metal temperature control, and (4) turbine first-stage metal temperature control, and (4) operator errors. The boiler tube failures and temperature operator errors. The boiler tube failures and temperature control were major contributorscontrol were major contributors

STATISTICALSTATISTICALSOLUTIONSOLUTION

ANALYZE:ANALYZE:Pareto Analysis & Weibull Analysis of boiler tube failures Pareto Analysis & Weibull Analysis of boiler tube failures revealed inadequate water/steam flow in the ends of the waterwall revealed inadequate water/steam flow in the ends of the waterwall tubesheettubesheet

PRACTICALPRACTICALSOLUTIONSOLUTION

IDENTIFY/EXECUTE AND CONTROL:IDENTIFY/EXECUTE AND CONTROL:Design changes improving flow distribution were implemented Design changes improving flow distribution were implemented and process is currently achieving RFC 91% of the time (2.7and process is currently achieving RFC 91% of the time (2.7) ) (other countermeasures also contributing).(other countermeasures also contributing).

Page 21: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltDesign For Six Sigma (DFSS)…What is it??Design For Six Sigma (DFSS)…What is it??

A process - a more structured approach to design A tool set An enhancement to our current design process A tool for assessing and mitigating risk Teamwork Customer focused A culture change

“…a continuation of the six sigma tool set being applied specifically to process, product, or service design.”

Page 22: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltDFSS – “50,000 foot” ViewDFSS – “50,000 foot” View

• Launch The Project

Define Outcomes

Scope Project

Identify Stakeholders

Select Team

Determine Project Approach

Create Project Plan

Define Project Controls

• Identify Customers

Define State of Current Customer Knowledge

Develop & Implement Customer Research Plan

Translate Customer Needs to Product/ Service CTQ’s

Specify Targets, Tolerance Limits & Sigma Targets

• Develop Product/ Service Necessary Functions

Develop Conceptual Product/ Service Designs

Develop High-Level Production Processes

Predict Capability & Evaluate Gaps

• Develop Detailed Product & Service Designs

Develop Detailed Production Processes

Refine Capability & Gap Evaluation, Perform Tradeoffs

Develop Process Control & Validation Plans

• Build Pilot Processes

Validate Pilot Readiness

Perform Pilot Testing

Analyze Gaps, Determine Root Causes

Evaluate Scale-up Potential

Develop Implementation & Transition Plans

• Build Full-Scale Processes, Train Staff

Perform Start-up Testing

Analyze Gaps, Determine Root Causes

Transition to Process Owners

Evaluate & Close Design Project

DefineDefine MeasureMeasure Explore Explore Design Design Validate Validate Implement Implement

- Design Review

Page 23: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 24: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma’s Broad ApplicationSix Sigma’s Broad Application

Sigma often reveals that less than 10% of total service process time is devoted to value-added work.

Measuring the “soft stuff” becomes not only possible but profitable.

� Quality of Deal teams. VOC says experience in industry and size of deal were the decisive factors in which firm to engage for an IPO. Quantified & easily measured.

� Quality of Communications in a leasing business. Do you notify me of changes in schedule, do I have a designated rep, do you return calls, emails etc within 8 hours? Quantified & easily measured.

� Quality of Customer Contact. “10, 5, first and last” teller measures. Quantified & easily measured

• J&J over $1 Billion in 2 years

• GE Capital over $1 Billion in value in 1996.

• JP Morgan created $510 Million in value in year one

• AIG found $38 million in revenue from one of first nine projects

SixSigma Results

Page 25: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 26: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma ChallengesSix Sigma Challenges

New (?) Ways of Thinking... Customer Thinking (customer specs) Process Thinking (leading indicators) Statistical Thinking (variation) Causal Thinking [y = (x1, x2, x3 … xn)]

Experimental Thinking (data-driven hypothesis testing) Control Thinking Stretch Thinking Adopting Common language/way of thinking about problems Accountability Thinking

The real Six Sigma advantage…The real Six Sigma advantage…the transformation of the culture.the transformation of the culture.The real Six Sigma advantage…The real Six Sigma advantage…

the transformation of the culture.the transformation of the culture.

Page 27: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

What is Six Sigma?What is Six Sigma?• What is it?What is it?

• How does it work?How does it work?

• What are the Benefits?What are the Benefits?

• What are the Main Challenges?What are the Main Challenges?

• What will it take?What will it take?

Page 28: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

“Senior leadership, especially Jack Welch, provided unyielding commitment to get the initiative going and ensure its continued success. This will not be easy for other companies to copy.”

Hoerl, Roger (2002), “An Inside Look at Six Sigma at GE,” Six Sigma Forum Magazine, Vol. 1, No. 3, May, pages 35-44.

General Electric – The Benchmark!General Electric – The Benchmark!

Page 29: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

“Six Sigma was directed toward specific, tangible objectives, including financial objectives. The culture changed as a result of delivering tangible benefits, not because of a focus on the culture itself.”

Hoerl, Roger (2002), “An Inside Look at Six Sigma at GE,” Six Sigma Forum Magazine, Vol. 1, No. 3, May, pages 35-44.

General Electric – The Benchmark!General Electric – The Benchmark!

Page 30: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma At 3MSix Sigma At 3M

500 Black Belts and Master Black Belts “for ever and ever” Each has a two-year assignment. All 28,000 salaried and technical people trained at least at

Green Belt level. Many hourly people selected also for Green Belt training.

Major goal is to have for first time common approach to problem solving, new product development, and measurement across entire company.

W. James McNerney, Jr. CEO, 3M Company, 25 June 2002

Page 31: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltTwenty Key Lessons LearnedTwenty Key Lessons Learned

 

Gerald J. Hahn, “20 Key Lessons Learned,” Six Sigma Forum Magazine, May 2002, pages 28-34.

1. The time is right.2. The enthusiastic commitment of top management is

critical.3. Develop an infrastructure.4. Commit top people.5. Invest in relevant hands-on training.6. Select initial projects to build credibility quickly.7. Make it all pervasive, and involve everybody.8. Emphasize DFSS.9. Don’t forget design for reliability.10.Focus on the entire system.

Page 32: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltTwenty Key Lessons LearnedTwenty Key Lessons Learned

 

Gerald J. Hahn, “20 Key Lessons Learned,” Six Sigma Forum Magazine, May 2002, pages 28-34.

11.Emphasize customer CTQs (critical to quality).12. Include commercial quality improvement.13.Recognize all savings.14.Customize to meet business needs.15.Consider the variability as well as the mean.16.Plan to get the right data.17.Beware of dogmatism.18.Avoid nonessential bureaucracy.19.Keep the tool box vital.20.Expect Six Sigma to become a more silent partner.

Page 33: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

Six Sigma

Methodologies

& Tools

Voice of

the Customer

Process

Management

Business

Dashboards

Shareholder Value

Customer Loyalty/Revenue Growth

Cost/Working Capital Reduction

The Essential Role of Leadership

Change

Management

Page 34: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltThe Strategic Process-Management Approach The Strategic Process-Management Approach

1. Identify Core Business Processes and Strategic Opportunities

2. Define Process Goals that lead to Competitive Advantage

3. Determine the Process Measures needed to evaluate Process Performance

Identify & Prioritize Performance Gaps

Identify Priority Projects

Charter, Launch and Support Projects

Develop Process Goals & Dashboards

Validate Measurement & CausalRelationships

Assign and Build Accountabilities

5. Project Selection 4. Process Management

Page 35: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma Companies - CharacteristicsSix Sigma Companies - Characteristics

Start with a prioritized list of customer and business requirements and specifications

Have a clear sense of process owners

Track performance over time

Analyze causes of process and output variation with statistical and process analysis tools

Think systematically about solutions and determine financial return (the ROI may not be there to move from 4.5 to 6.0 Sigma)

Standardize processes to hold the gains

Six Sigma is prioritized, disciplined problem solving to Six Sigma is prioritized, disciplined problem solving to deliver on-target performance with minimum variation.deliver on-target performance with minimum variation.Six Sigma is prioritized, disciplined problem solving to Six Sigma is prioritized, disciplined problem solving to deliver on-target performance with minimum variation.deliver on-target performance with minimum variation.

Page 36: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen BeltSix Sigma SummarySix Sigma Summary

Six Sigma IS’s: A Framework to Improve

Performance Applicable to Every Function

and Business About Business

Performance

Six Sigma NOT’s: The Solution for Everything Applicable Only to

Manufacturing It’s Just About Statistics

Page 37: Six Sigma Overview - What is Six Sigma?

Six SigmaGreen Belt

1. Large Group Discussion: What are the Your Company Business Objectives/Opportunities?

2. As a small group, discuss how the Six Sigma Approach can help Your Company Achieve the Business Objectives.

3. What will Six Sigma not achieve, relative to the Objectives?

4. Summarize your team conclusions on a flipchart and be prepared to discuss your list with the large group.

Using 6 to Achieve Your Co’s Objectives