Introduction to Six Sigma
• Six Sigma is a disciplined, data-driven methodology to eliminate defects in a process
• A way to assess performance of a process– Devised at Motorola in 1987– Higher the process sigma, the fewer the defects
• Focused on customer requirements– Internal, but especially external customers– Track Defects (aka CTQs) that affect satisfaction,
loyalty, revenue, market share
Origin of Six Sigma
• 1987 Motorola Develops Six Sigma– Raised Quality Standards
• Other Companies Adopt Six Sigma– GE– Dow Chemical, DuPont, Honeywell, Whirlpool
Time Line
2002200219951995199219921987198719851985
Dr Mikel J Harry wrote aPaper relating early failures to quality
Motorola
Allied Signal
General Electric
Johnson & Johnson,Ford, Nissan,Honeywell
A scientific and practical method to achieve improvements in a company
Scientific:• Structured approach.• Assuming quantitative data.
Practical:• Emphasis on financial result.• Start with the voice of the customer.
“Show me the data”
”Show me the money”
Six Sigma
It is a PhilosophyIt is a PhilosophyAnything less than Anything less than ideal is an opportunity ideal is an opportunity for improvementfor improvementDefects costs moneyDefects costs moneyUnderstanding Understanding processes and processes and improving them is the improving them is the most efficient way to most efficient way to achieve lasting resultsachieve lasting results
It is a ProcessIt is a Process To achieve this level of To achieve this level of
performance you need performance you need to: to: DDefine, efine, MMeasure, easure, AAnalyse, nalyse, IImprove and mprove and CControlontrol
It is StatisticsIt is Statistics
6 Sigma processes will 6 Sigma processes will produce less than 3.4 produce less than 3.4 defects per million defects per million opportunitiesopportunities
PhilosophyKnow What’s Know What’s Important to the Important to the Customer (CTQ)Customer (CTQ)
Reduce Defects Reduce Defects (DPMO) (DPMO)
Center Around Center Around Target (Mean) Target (Mean)
Reduce Variation Reduce Variation (Standard Deviation)(Standard Deviation)
Data Driven Decision
• YY• DependentDependent• OutputOutput• EffectEffect• SymptomSymptom• MonitorMonitor
• X1 . . . XnX1 . . . Xn• IndependentIndependent• Input-ProcessInput-Process• CauseCause• ProblemProblem• ControlControl
f(X)f(X)Y=Y=
The focus of Six sigma is to identify and control XsThe focus of Six sigma is to identify and control Xs
Two Processes
• DefineDefine• MeasureMeasure• AnalyzeAnalyze• ImproveImprove• ControlControl
• DefineDefine• MeasureMeasure• AnalyzeAnalyze• DesignDesign• VerifyVerify
DMAICDMAIC DMADVDMADV
• Existing ProcessesExisting Processes • New ProcessesNew Processes• DFSSDFSS
Six Sigma Methods Production
DesignService
Purchase
HRM
Administration
QualityDepart.
Management
M & S
IT
Where can Six Sigma be applied?
Is Six Sigma New?
• The basic premise of Six Sigma started in 1600 B.C. by Egyptian physicians and is noted on the Edwin Smith papyrus. It essentially says:
• Make no remedy without first understanding the cause.
Juran, Deming, Shewhart, and Crosby simply restated this principle.Juran, Deming, Shewhart, and Crosby simply restated this principle.
Key Concepts
CTQ (Critical-To-Quality)• CTQ characteristics for the process, service or
process• Measure of “What is important to Customer”• 6 Sigma projects are designed to improve CTQ• Examples:
– Waiting time in clinic– Spelling mistakes in letter– % of valves leaking in operation
Defective and Defect
• A nonconforming unit is a defective unit• Defect is nonconformance on one of many possible
quality characteristics of a unit that causes customer dissatisfaction.
• A defect does not necessarily make the unit defective• Examples:
– Scratch on water bottle – (However if customer wants a scratch free bottle, then this
will be defective bottle)
Defect Opportunity
• Circumstances in which CTQ can fail to meet.• Number of defect opportunities relate to
complexity of unit.• Complex units – Greater opportunities of
defect than simple units• Examples:
– A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15
DPO (Defect Per Opportunity)
• Number of defects divided by number of defect opportunities
• Examples:– In previous case (15 defect opportunities), if 10 units have 2
defects.– Defects per unit = 2 / 10 = 0.2– DPO = 2 / (15 x 10) = 0.0133333
DPMO (Defect Per Million Opportunities)
• DPO multiplies by one million• Examples:
– In previous case (15 defect opportunities), if 10 units have 2 defects.
– Defects per unit = 2 / 10 = 0.2– DPO = 2 / (15 x 10) = 0.0133333– DPMO = 0.013333333 x 1,000,000 = 13,333
Six Sigma performance is 3.4 DPMO
13,333 DPMO is 3.7 Sigma
Yield
• Proportion of units within specification divided by the total number of units.
• Examples:– If 10 units have 2 defectives– Yield = (10 – 2) x 100 /10 = 80 %
• Rolled Through Yield (RTY)– Y1 x Y2 x Y3 x ……. x Yn– E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54
Examples of what Six Sigma means in business
COPQ (Cost of Poor Quality)
- 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
Benefits of 6Benefits of 6approach w.r.t. financialsapproach w.r.t. financials
-level Defect rate (ppm)
Costs of poor quality Status of the company
6 3.4 < 10% of turnover World class 5 233 10-15% of turnover 4 6210 15-20% of turnover Current standard 3 66807 20-30% of turnover 2 308537 30-40% of turnover Bankruptcy
Financial Aspects
Statistical background
Target =
Some Key measure
Statistical background
Target =
‘Control’ limits
LSL USL
Statistical background
Required Tolerance
Target =
LSL USL
Statistical background
Tolerance
Target =
Six-Sigma
LSL USL
ppm1350
ppm1350
Statistical background
Tolerance
Target =
LSL USL
ppm0.001
ppm1350
ppm1350
ppm0.001
Statistical background
Tolerance
Target =
LSL
0 ppm ppm3.4
USL
ppm3.4ppm
66807
Statistical background
Tolerance
Performance Standards
23456
30853766807
62102333.4
PPM69.1%93.3%99.38%99.977%99.9997%
Yield
Processperformance
Processperformance
Defects permillion
Defects permillion
Long term yield
Long term yield
Current standardCurrent standard
World ClassWorld Class
The objective is to understand customer requirements and reduce process variation and center of target
Reduce Process Variation & Centering
CenterProcess
ReduceSpread
Off-Target Too Much Variation
Centered On-Target
Critique of ISO 9000
• Bureaucratic, large scale• Focus on satisfying auditors, not customers• Certification is the goal; the job is done when certified • Little emphasis on improvement• The return on investment is not transparent • Main driver is:
– We need ISO 9000 to become a certified supplier, – Not “we need to be the best and most cost effective supplier
to win our customer’s business”• Corrupting influence on the quality profession
Components of Six Sigma
Components
Two components of Six SigmaTwo components of Six Sigma
1. Process Power1. Process Power
2. People Power2. People Power
Process Power
P-D-C-A
P
DC
APlan
DoCheck
ActAct on what was learned
Check the results
Plan the change
Implement the change on a small scale.
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
DDefine
MMeasure
AAnalyze
IImprove
CControl
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
Define
DDefine
MMeasure
AAnalyze
IImprove
CControl
VoCVoC - 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
Define
Project CharterProblem Statement:
Goal:
Business Case:
Scope:
Cost Benefit Projection:
Milestones:
VOC Key Issue CTQDelighters
More Is Better
Must Be
Voice of the CustomerBusiness Case
Initial Process Mapping
OutputsProcessInputs
Yield: 60%
Yield: 90%
Yield: 45%
Yield: 98%
CU
ST
OM
ER
SSU
PP
LIER
S
SIPOC
Suppliers Input Process Output CustomerClients Requirements Profile ClientSales People Resumes Interview Summaries Sales PeopleCandidates Profiles Offer Letters Delivery ManagementWeb Site Margin Template Candidate/EmployeeRecruiting Data Base
Get Requirement
Search for Candidate
Screen Candidate
Make Offer Fill RequirementPresent
Candidate
Example - SIPOCA SIPOC will allow your project team to put parameters around the process
being reviewed and identify the areas impacted both up and down stream
Suppliers – who feeds the process Inputs – what do they feed Process – steps in the process Outputs – outputs of the process Customer – who pulls from the process
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 ?
DDefine
MMeasure
AAnalyze
IImprove
CControl
Measure
Col # 1 2 3 4 5 6
Inspector A BSample # 1st Trial 2nd Trial Diff 1st Trial 2nd Trial Diff
1 2.0 1.0 1.0 1.5 1.5 0.02 2.0 3.0 1.0 2.5 2.5 0.03 1.5 1.0 0.5 2.0 1.5 0.54 3.0 3.0 0.0 2.0 2.5 0.55 2.0 1.5 0.5 1.5 0.5 1.0
Totals 10.5 9.5 3.0 9.5 8.5 2.0
Averages 2.1 1.9 0.6 1.9 1.7 0.4
Sum 4.0 Sum 3.6
XA 2.0 XB 1.8RA
RB
Validate MeasurementSystems
Display Data
0
1000
-1000
10 20 30
UCL
X
LCL
D B F A C E Other
Identify the Metrics
Data Collection Plan
Operational Definition and Procedures
Data Collection PlanWhat questions do you want to answer?
DataWhat Measure type/
Data typeHow measured
Related conditions
Sampling notes
How/where
How will you ensure consistency and stability?
What is your plan for starting data collection?
How will the data be displayed?
Prioritize the Metrics
I1I2I3I4
O1 O2 O3 O4
FMEA
Identify Process CapabilityLSL USL
Cp = 0.4s = 2.7
Measurethe
process
I P O
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
DDefine
MMeasure
AAnalyze
IImprove
CControl
Analyze
.
VA NVA
Process Door
Regression Analysis
Chi-Square
c²
Regression
t-testANOVA
X 1
Y
Hypothesis-Testing Design of Experiments
.
Cause & Effect
Data Door22
21
20
19
18
17
16
15
14
13
12
1 2 3 4 5 6 7 8 9 10
X
O
n
X
O
n
X
O
n
X
O
n
X
O
n
X
O
n
X
O
n
X
O
n
O
n
X
O
n
.
Improve
Present recommendations to process owner.
Pilot run- Formulate 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
Perform Cost-Benefit Analysis
Generate Solutions
ABCD
4132
Assess Risks
Run Pilot Test
Full scale
Original
2 4 8 6 10
G
1 3 5 7 9A
B
CD
FE
JIH
G
Plan Implementation
Select the Solution
Improve
FMEA
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
DDefine
MMeasure
AAnalyze
IImprove
CControl
Control
Evaluate Project Results
.
UCL
LCL
Ownership & Monitoring
Before After
Step 4 changes implemented
} Improvement
Target} Remaining Gap
Good
} Improvement
Before After
A1 A2 A3 A4 A2 A1 A3 A4
Process ChangeManagement
Learnings
Recommendations
Results
• • •
next
Key Learnings
QC Process Chart
Work Instructions
Control/Check Points Response to AbnormalityNotesCode # Charac-
teristicsControlLimitsMethodWho Immediate
Fix Permanent
Fix WhoFlowchart
2
12
Product NameProcess NameProcess Code #
Date of Issue: Issued by: Approved by:Revision Date Reason Signature
1
Document &Standardize
Operating Procedures
TrainingCurriculumTraining
Manual Manual
Fill to here
.
Closure
LSL USL
s = 3.7Cp = 1.4
s = 2.7Cp = 0.4
Process Owner
BenchmarkBenchmark BaselineBaseline Contract / Contract / CharterCharter Kano ModelKano Model Voice of the Voice of the
CustomerCustomer Quality FunctionQuality Function
DeploymentDeployment Process Flow MapProcess Flow Map ProjectProject
ManagementManagement ““Management by Management by
FactFact”” –– 4 What 4 What’’ss
7 Basic Tools7 Basic Tools Defect MetricsDefect Metrics Data Collection,Data Collection,
Forms, Plan,Forms, Plan,
LogisticsLogistics SamplingSampling
TechniquesTechniques
Cause & EffectCause & Effect
DiagramsDiagrams Failure Models &Failure Models & Effect AnalysisEffect Analysis Decision & RiskDecision & Risk
AnalysisAnalysis Statistical Statistical InferenceInference Control ChartsControl Charts CapabilityCapability Reliability Reliability AnalysisAnalysis Root Cause Root Cause Analysis Analysis 5 Why5 Why’’ss Systems Systems ThinkingThinking
Design of Design of
ExperimentsExperiments ModellingModelling TolerancingTolerancing Robust DesignRobust Design Process MapProcess Map
Statistical ControlsStatistical Controls Control ChartsControl Charts Time Series Time Series
MethodsMethods
Non Statistical Non Statistical
ControlsControls ProcedureProcedure
adherenceadherence PerformancePerformance
MgmtMgmt Preventive activitiesPreventive activities Poke yokePoke yoke
DefineWhat is wrong?DefineWhat is wrong?
MeasureData & Processcapability
MeasureData & Processcapability
Analyze When and whereare the defects
Analyze When and whereare the defects
ImproveHow to get to six sigma
ImproveHow to get to six sigma
ControlDisplay key measures
ControlDisplay key measures
Tools for DMAIC
Master Black Belt
Black Belts
Green Belts
Team Members / Yellow Belts
Ch
amp
ion
s
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.
6 Training
Six Sigma Organization
Champion
BlackBelt
BlackBelt
BlackBelt
GreenBelt
GreenBelt
GreenBelt
GreenBelt
GreenBelt
YellowBelt
YellowBelt
YellowBelt
YellowBelt
MasterBlackBelt
Champion
Plans improvement projectsPlans improvement projects
Charters or champions chartering Charters or champions chartering processprocess
Identifies, sponsors and directs Six Identifies, sponsors and directs Six Sigma projectsSigma projects
Holds regular project reviews in Holds regular project reviews in accordance with project chartersaccordance with project charters
Includes Six Sigma requirements in Includes Six Sigma requirements in expense and capital budgetsexpense and capital budgets
Champion Cont.
Identifies and removes Identifies and removes organizational and cultural barriers organizational and cultural barriers to Six Sigma success.to Six Sigma success.
Rewards and recognizes team and Rewards and recognizes team and individual accomplishments individual accomplishments (formally and informally)(formally and informally)
Communicates leadership visionCommunicates leadership vision
Monitors and reports Six Sigma Monitors and reports Six Sigma progressprogress
Validates Six Sigma project resultsValidates Six Sigma project results
Nominates highly qualified Black Nominates highly qualified Black Belt and/or Green Belt candidatesBelt and/or Green Belt candidates
Master Black BeltMaster Black BeltRolesRoles ResponsibilitiesResponsibilities
- Enterprise Six Sigma Enterprise Six Sigma expertexpert
- Permanent full-time Permanent full-time change agentchange agent
-Certified Black Belt with Certified Black Belt with additional specialized skills additional specialized skills or experience especially or experience especially useful in deployment of Six useful in deployment of Six Sigma across the Sigma across the enterpriseenterprise
- Highly proficient in using Six - Highly proficient in using Six Sigma methodology to achieve Sigma methodology to achieve tangible business results.tangible business results.
- Technical expert beyond Black Belt Technical expert beyond Black Belt level on one or more aspects of level on one or more aspects of process improvement (e.g., process improvement (e.g., advanced statistical analysis, project advanced statistical analysis, project management, communications, management, communications, program administration, teaching, program administration, teaching, project coaching)project coaching)
- Identifies high-leverage Identifies high-leverage opportunities for applying the Six opportunities for applying the Six Sigma approach across the Sigma approach across the enterpriseenterprise
-Basic Black Belt trainingBasic Black Belt training-Green Belt trainingGreen Belt training-Coach / Mentor Black BeltsCoach / Mentor Black Belts
RolesRoles ResponsibilitiesResponsibilities- Six Sigma technical expertSix Sigma technical expert- Temporary, full-time change Temporary, full-time change
agent (will return to other agent (will return to other duties after completing a duties after completing a two to three year tour of two to three year tour of duty as a Black Belt)duty as a Black Belt)
- Leads business process Leads business process improvement projects where Six improvement projects where Six Sigma approach is indicated.Sigma approach is indicated.
- Successfully completes high-Successfully completes high-impact projects that result in impact projects that result in tangible benefits to the tangible benefits to the enterpriseenterprise
- Demonstrated mastery of Black Demonstrated mastery of Black Belt body of knowledgeBelt body of knowledge
- Demonstrated proficiency at Demonstrated proficiency at achieving results through the achieving results through the application of the Six Sigma application of the Six Sigma approachapproach
- Coach / Mentor Green BeltsCoach / Mentor Green Belts- Recommends Green Belts for Recommends Green Belts for
CertificationCertification
Black BeltBlack Belt
Green Belt
RolesRoles ResponsibilitiesResponsibilities- Six Sigma Project originatorSix Sigma Project originator- Part-time Six Sigma change Part-time Six Sigma change
agent. Continues to perform agent. Continues to perform normal duties while normal duties while participating on Six Sigma participating on Six Sigma project teamsproject teams
- Six Sigma champion in local Six Sigma champion in local areaarea
- Recommends Six Sigma projectsRecommends Six Sigma projects- Participates on Six Sigma project Participates on Six Sigma project
teamsteams- Leads Six Sigma teams in local Leads Six Sigma teams in local
improvement projects improvement projects
Yellow Belt
RolesRoles ResponsibilitiesResponsibilities- Learns and applies Six Learns and applies Six
Sigma tools to projectsSigma tools to projects- Actively participates in team Actively participates in team
taskstasks- Communicates well with other Communicates well with other
team membersteam members- Demonstrates basic improvement Demonstrates basic improvement
tool knowledgetool knowledge- Accepts and executes Accepts and executes
assignments as determined by assignments as determined by teamteam
Financial Analyst
Validates the baseline status for Validates the baseline status for each project.each project.
Validates the sustained results / Validates the sustained results / savings after completion of the savings after completion of the project.project.
Compiles overall investment vs. Compiles overall investment vs. benefits on Six Sigma for benefits on Six Sigma for management reporting.management reporting.
Will usually be the part of Senior Will usually be the part of Senior Leadership Team.Leadership Team.
Project Selection
The first step to implement Six Sigma
Sources of Projects
External Sources:External Sources:Voice of CustomerVoice of Customer
What are we falling short of meeting customer needs?What are we falling short of meeting customer needs?
What are the new needs of customers?What are the new needs of customers?
Voice of MarketVoice of MarketWhat are market trends, and are we ready to adapt?What are market trends, and are we ready to adapt?
Voice of CompetitorsVoice of CompetitorsWhat are we behind our competitors?What are we behind our competitors?
Sources of Projects Cont.
Internal Sources:Internal Sources: Voice of ProcessVoice of Process
Where are the defects, repairs, reworks?Where are the defects, repairs, reworks?
What are the major delays?What are the major delays?
What are the major wastes?What are the major wastes?
Voice of EmployeeVoice of EmployeeWhat concerns or ideas have employees or managers What concerns or ideas have employees or managers raised?raised?
What are we behind our competitors?What are we behind our competitors?
Project Selection
A Problem Statement should be SMART: SSpecificpecific - It does not solve world hunger - It does not solve world hunger MMeasurable - It has a way to measure easurable - It has a way to measure
successsuccess AAchievable - It is possible to be chievable - It is possible to be
successfulsuccessful RRelevant - It has an impact that can be elevant - It has an impact that can be
quantifiedquantified TTimely - It is near term not off in the imely - It is near term not off in the
futurefuture
Cost of implementingDirect PayrollDirect Payroll
Full time (Black Belts, Master Black Full time (Black Belts, Master Black Belts)Belts)
Indirect PayrollIndirect PayrollTime by executives, team members, Time by executives, team members, data collectiondata collection
Training and ConsultingTraining and ConsultingBlack Belt course, Overview for Mgmt Black Belt course, Overview for Mgmt etc.etc.
Improvement Implementation CostsImprovement Implementation CostsInstalling new solution, IT driven Installing new solution, IT driven solutions etc.solutions etc.
Questions and Answers