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Chapter 10Chapter 10Chapter 10Chapter 10

Principles of Principles of

Six SigmaSix Sigma

Key IdeaKey IdeaIntroductionIntroduction

Although we view quality improvement tools and techniques from the perspective of Six Sigma, it is important to understand that they are simply a collection of methods that have been used successfully in all types of quality management and improvement initiatives, from generic TQM efforts, to ISO 9000, and in Baldrige processes.

Six SigmaSix Sigma

A simple quality metricA simple quality metric

An overall strategy to quality An overall strategy to quality improvementimprovement

Six-Sigma MetricsSix-Sigma Metrics

DefectDefect – any mistake or error – any mistake or error that is passed on to a customerthat is passed on to a customer

Defects per unit (DPU)Defects per unit (DPU) = number = number of defects discovered of defects discovered number number of units producedof units produced

Defects per million opportunities Defects per million opportunities (dpmo)(dpmo) = DPU = DPU 1,000,000 1,000,000 opportunities for erroropportunities for error

Six-Sigma QualitySix-Sigma Quality

Ensuring that process variation is half Ensuring that process variation is half the design tolerance (Cp = 2.0) while the design tolerance (Cp = 2.0) while allowing the mean to shift as much as allowing the mean to shift as much as 1.5 standard deviations, resulting in at 1.5 standard deviations, resulting in at most 3.4 dpmo.most 3.4 dpmo.

k-Sigma Quality Levelsk-Sigma Quality Levels

Six SigmaSix Sigma(Chapter 3)(Chapter 3)

Based on a statistical measure Based on a statistical measure that equates to 3.4 or fewer that equates to 3.4 or fewer errors or defects per million errors or defects per million opportunitiesopportunities

Pioneered by Motorola in the mid-Pioneered by Motorola in the mid-1980s and popularized by the 1980s and popularized by the success of General Electricsuccess of General Electric

Key IdeaKey Idea (Chapter 3)(Chapter 3)

Six Sigma can be described as a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization.

Key Concepts of Six Key Concepts of Six Sigma Sigma (1 of 2) (Chapter 3)(1 of 2) (Chapter 3)

Think in terms of key business processes, customer requirements, and overall strategic objectives.

Focus on corporate sponsors responsible for championing projects, support team activities, help to overcome resistance to change, and obtaining resources.

Emphasize such quantifiable measures as defects per million opportunities (dpmo) that can be applied to all parts of an organization

Key Concepts of Six Key Concepts of Six Sigma Sigma (2 of 2) (Chapter 3)(2 of 2) (Chapter 3)

Ensure that appropriate metrics are identified early and focus on business results, thereby providing incentives and accountability.

Provide extensive training followed by project team deployment

Create highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.

Set stretch objectives for improvement.

Key IdeaKey Idea

Although originally developed for manufacturing in the context of tolerance-based specifications, the Six Sigma concept has been operationalized to any process and has come to signify a generic quality level of at most 3.4 defects per million opportunities.

Projects as Value-Projects as Value-Creation ProcessesCreation Processes

ProjectsProjects - - temporary work structures that start up, produce products or services, and then shut down.

Project management – all activities associated with planning, scheduling, and controlling projects

Six Sigma Project TeamsSix Sigma Project Teams

ChampionsChampions – senior managers who – senior managers who promote Six Sigmapromote Six Sigma

Master Black BeltsMaster Black Belts – highly trained experts – highly trained experts responsible for strategy, training, responsible for strategy, training, mentoring, deployment, and results.mentoring, deployment, and results.

Black BeltsBlack Belts – Experts who perform technical – Experts who perform technical analyses analyses

Green BeltsGreen Belts – functional employees trained – functional employees trained in introductory Six Sigma toolsin introductory Six Sigma tools

Team MembersTeam Members – Employees who support – Employees who support specific projectsspecific projects

Key IdeaKey IdeaProject ManagementProject Management

Successful project managers have four key skills: a bias toward task completion, technical and administrative credibility, interpersonal and political sensitivity, and leadership ability.

Project Life Cycle Project Life Cycle Management Management (1 of 2)(1 of 2)

Project Quality Initiation: Define directions, priorities, limitations, and constraints.

Project Quality Planning: Create a blueprint for the scope of the project and resources needed to accomplish it.

Project Quality Assurance: Use appropriate, qualified processes to meet technical project design specifications.

Project Life Cycle Project Life Cycle Management Management (2 of 2)(2 of 2)

Project Quality Control: Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked.

Project Quality Closure: Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers.

The Definition of a The Definition of a “Project”“Project”

Required performancePe

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Budget limit

Cost

Due Date

Target

Cumulative

Time (

“sch

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1818

Problem SolvingProblem Solving

ProblemProblem: any deviation between : any deviation between what “should be” and what “is” what “should be” and what “is” that is important enough to need that is important enough to need correctingcorrecting

Problem SolvingProblem Solving: the activity : the activity associated with changing the state associated with changing the state of what “is” to what “should be”of what “is” to what “should be”

Quality Problem TypesQuality Problem Types

1. Conformance problems2. Unstructured performance

problems3. Efficiency problems4. Product design problems5. Process design problems

Project SelectionProject Selection

One of the more difficult One of the more difficult challenges in Six Sigma is the challenges in Six Sigma is the selection of the most appropriate selection of the most appropriate problem to attack.problem to attack.

Two ways to generate projects:Two ways to generate projects:– Top-downTop-down– Bottom-upBottom-up

Key Factors in Six Sigma Key Factors in Six Sigma Project SelectionProject Selection

Financial return, as measured by costs associated with quality and process performance, and impacts on revenues and market share

Impacts on customers and organizational effectiveness

Probability of success Impact on employees Fit to strategy and competitive advantage

Problem Solving ProcessProblem Solving Process

1.1. Redefining and analyzing the Redefining and analyzing the problemproblem

2.2. Generating ideasGenerating ideas

3.3. Evaluating and selecting ideasEvaluating and selecting ideas

4.4. Implementing ideasImplementing ideas

Key IdeaKey IdeaProblem SolvingProblem Solving

A structured problem-solving process provides all employees with a common language and a set of tools to communicate with each other, particularly as members of cross-functional teams.

DMAIC MethodologyDMAIC Methodology

1.1. DefineDefine

2.2. MeasureMeasure

3.3. AnalyzeAnalyze

4.4. ImproveImprove

5.5. ControlControl

DefineDefine

Describe the problem in Describe the problem in operational termsoperational terms

Drill down to a specific problem Drill down to a specific problem statement (statement (project scopingproject scoping))

Identify customers and CTQs, Identify customers and CTQs, performance metrics, and performance metrics, and cost/revenue implicationscost/revenue implications

MeasureMeasure

Key data collection questionsKey data collection questions– What questions are we trying to What questions are we trying to

answer?answer?– What type of data will we need to What type of data will we need to

answer the question?answer the question?– Where can we find the data?Where can we find the data?– Who can provide the data?Who can provide the data?– How can we collect the data with How can we collect the data with

minimum effort and with minimum minimum effort and with minimum chance of error?chance of error?

AnalyzeAnalyze

Focus on why defects, errors, or Focus on why defects, errors, or excessive variation occurexcessive variation occur

Seek the Seek the root causeroot cause 5-Why technique5-Why technique Experimentation and verificationExperimentation and verification

ImproveImprove

Idea generationIdea generation BrainstormingBrainstorming Evaluation and selectionEvaluation and selection Implementation planningImplementation planning

ControlControl

Maintain improvementsMaintain improvements Standard operating proceduresStandard operating procedures TrainingTraining Checklist or reviewsChecklist or reviews Statistical process control chartsStatistical process control charts

Tools for Six-Sigma and Tools for Six-Sigma and Quality ImprovementQuality Improvement

Elementary statisticsElementary statistics Advanced statisticsAdvanced statistics Product design and reliabilityProduct design and reliability MeasurementMeasurement Process controlProcess control Process improvementProcess improvement Implementation and teamworkImplementation and teamwork

Design for Six SigmaDesign for Six Sigma

Focus on optimizing product and Focus on optimizing product and process performanceprocess performance

FeaturesFeatures– A high-level architectural view of the design– Use of CTQs with well-defined technical requirements– Application of statistical modeling and simulation

approaches– Predicting defects, avoiding defects, and

performance prediction using analysis methods– Examining the full range of product performance

using variation analysis of subsystems and components

Six Sigma in Services and Six Sigma in Services and Small OrganizationsSmall Organizations

Six Sigma is equally applicable to Six Sigma is equally applicable to services. However, services have services. However, services have some unique characteristics.some unique characteristics.

Key IdeaKey IdeaSix Sigma in ServicesSix Sigma in Services

All Six Sigma projects have three key characteristics: a problem to be solved, a process in which the problem exists, and one or more measures that quantify the gap to be closed and can be used to monitor progress.

Key Six Sigma Metrics in Key Six Sigma Metrics in ServicesServices

AccuracyAccuracy Cycle timeCycle time CostCost Customer satisfactionCustomer satisfaction

Lean Production and Six Lean Production and Six SigmaSigma The 5S’s: The 5S’s: seiri seiri (sort), (sort), seiton seiton (set in order), (set in order),

seiso seiso (shine), (shine), seiketsu seiketsu (standardize), and (standardize), and shitsuke shitsuke (sustain). (sustain).

Visual controlsVisual controls Efficient layout and standardized workEfficient layout and standardized work Pull productionPull production Single minute exchange of dies (SMED)Single minute exchange of dies (SMED) Total productive maintenanceTotal productive maintenance Source inspectionSource inspection Continuous improvementContinuous improvement

Traditional Economic Traditional Economic Model of Quality of Model of Quality of ConformanceConformance

Total cost

Cost due to nonconformance

Cost of quality assurance

“optimal level” of quality100%

Modern Economic Model Modern Economic Model of Quality of Conformanceof Quality of Conformance

Total cost

Cost due to nonconformance

Cost of quality assurance

100%