Handbook of Six sigma

Makes a Difference!

Agenda* Sony Video* Six Sigma Definition* History of Six Sigma* Jack Welch Video-Why Six Sigma?* M&M Exercise* What is the Methodology-DMAIC?* What is the impact to the Corp culture?* What are the roles in Six Sigma?* What are the goals of Six Sigma?* Q&A

Let’s See What People at Sony Think about Six

Sigma!

What is Sigma?What is Sigma?

Sigma is a letter from the Greek alphabet Sigma is a letter from the Greek alphabet used by statisticians to define the Standard used by statisticians to define the Standard Deviation of a process (variability from the Deviation of a process (variability from the

average result of a process).average result of a process).

Why Six Sigmas?Why Six Sigmas?

••““Six Sigmas” is the area under a normal distribution that Six Sigmas” is the area under a normal distribution that represents 99.9966% of a processes outcome. represents 99.9966% of a processes outcome.

••In one million executions of the process, only 3.4 In one million executions of the process, only 3.4 outcomes will fail to meet customer specification. outcomes will fail to meet customer specification.

••Six Sigma calls outcomes which fail to meet customer Six Sigma calls outcomes which fail to meet customer specification “defects.”specification “defects.”

••The goal of Six Sigma is to improve and refine our The goal of Six Sigma is to improve and refine our processes so “Six Sigmas” of process outcome fit within processes so “Six Sigmas” of process outcome fit within customer specifications.customer specifications.

Process Performance at Process Performance at other Sigma Levelsother Sigma Levels

2 308,5373 66,8074 6,2105 2336 3.4

σσ PPMPPM(Distribution Shifted ± 1.5σ)

ProcessCapabilityProcess

CapabilityDefects per Million

Opportunities

2-10

NORMAL DISTRIBUTION CURVE

+/- 6 sigma between customer specification limits

-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6Critical measure

Sigma = Standard Deviation

Point of inflectionCustomer's lower limit

Customeupper lim

Bad versus Good

Some times, you hit the target

Consistently, you hit the target

How We Attack a Problem

Rush to what we Rush to what we thought thought was the solution!was the solution!

The Old Way

SizeSize--up the problem, first.up the problem, first.

The Way

The History of Six Sigma

HistoryMotorolaMotorola 19871987Invented the concepts that have evolved into the Invented the concepts that have evolved into the comprehensive management system that is Six Sigmacomprehensive management system that is Six Sigma

ManufacturingManufacturing

Allied Signal (Honeywell) 1992Allied Signal (Honeywell) 1992CEO Larry BossidyCEO Larry Bossidy

Beyond manufacturingBeyond manufacturing

GEGE 19951995CEO Jack Welch CEO Jack Welch

Leadership DevelopmentLeadership Development

Business Strategy Practiced Business Strategy Practiced WorldWideWorldWide

Just to name a few!Just to name a few!

American ExpressKodak DupontBDJohnson & JohnsonLenox ChinaToshibaTitleistTexas InstrumentAppleCircuit CityBlack & DeckerCampbells SoupBoeingFord

Let’s go to the Video TapeWhy Six Sigma?

Data Gathering

What is the total # of M&Ms?Which color is dominant?

Data AnalysisData Collection Technique

M&M Exercise Grp1 Grp2 Grp3 Grp4 Grp5 Grp6 Grp7 Grp8 Grp9 Grp10 Totals AveragesRed 0 0.0Orange 0 0.0Yellow 0 0.0Green 0 0.0Blue 0 0.0Brown 0 0.0Total M&Ms 0 0 0 0 0 0 0 0 0 0 0 0.0

0 0.2 0.4 0.6 0.8 1

Red

Orange

Yellow

Green

Blue

Brown

Col

or

M&M Pareto of Color Distribution(Knowledge Gained)

What is the Methodology?

Harvesting the Fruit of Six SigmaHarvesting the Fruit of Six Sigma

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Sweet FruitSweet Fruit Design for Manufacturabili ty

Bulk of FruitBulk of FruitProcess Characterization and Optimization

Low Hanging FruitLow Hanging FruitSeven Basic Tools

Ground FruitGround FruitLogic and Intuit ion

Process EntitlementProcess Entitlement

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

We don't know what we don't knowWe can't ac t on what we don't knowWe won't know until we searchWe won't search for what we don't questionWe don't question what we don't measureHence, We just don't know

2-37

Start by answering these questionsStart by answering these questions

• What product or service do I produce?What product or service do I produce?

•• Who are my customers?Who are my customers?

•• What are my customer’s expectations?What are my customer’s expectations?

•• How do I know I’m meeting those How do I know I’m meeting those expectations?expectations?

•• What variables affect the outcome of my What variables affect the outcome of my process?process?

•• What are my business unit’s priorities?What are my business unit’s priorities?

Six Sigma Problem Six Sigma Problem SolutionsSolutions

Depend on data to Depend on data to substantiate the substantiate the

problem, and problem, and prove its solution.prove its solution.

Are Are developed developed

with process with process knowledge.knowledge.

Require, crossRequire, cross--functional, functional, team effort.team effort.

Search for other improvement Search for other improvement opportunities if your project proposal opportunities if your project proposal

doesn’t...doesn’t...

Save SEL money, orSave SEL money, or

Protect SEL against unnecessary expense, orProtect SEL against unnecessary expense, or

Increase external or internal customer Increase external or internal customer satisfaction.satisfaction.

5 PHASES OF A 5 PHASES OF A SIX SIGMA SIX SIGMA PROJECTPROJECT

The Old Way

Eventually, we’ll find the Eventually, we’ll find the right solution.right solution.

How We Search for Solutions

Use a solution “plan.”Use a solution “plan.”

The Way

Five Phasesof a Project

Define• What is the

business problem?

• Who are the customers?

• What are their needs?

• Scope

• Who is on the team?

• What is the timeline for completion?

• Brainstorm the current process

The Old Way

Don’t tell us anything Don’t tell us anything because we know it all!because we know it all!

How We Know What Our Customer Wants

Considers the “Voice of the Considers the “Voice of the Customer.“Customer.“

The Way

2 4 6 8 1012 14 16 18 y

FrequencyLSL USL

Time

Absenteeism

Histogram

• A bar chart for numerical

categories; bars need not be in

descending order

• Shape provides form of distribution

of data

• Spec limits can be superimposed

to estimate process capability

Pareto Diagram

•A bar chart is for non-numerical categorical descriptors which are sorted in order of descending frequency/cost/etc.•Used to identify and separate the most significant categories from the less important categories.

Causes

MaterialsManpower

Methods

Effect

Machines

Environment

Meas. System

Cause & Effect Diagram

Process Flow Diagram

Failure Mode and Effect Analysis

•Used to identify and evaluate potential failure modes in order to prioritize and “fool proof” the critical ones.•Performed on both products and processes.

Run Chart

•Plot of data over time•Used to record and display trends in data over time•Detects meaningful changes in a process

No Good

Input

Process

Rework

Decision

Output

Good

• A graphic representation of the sequence of steps in a process.• Helps identify critical stages and locate problem areas and bottlenecks.• Suggests data collection points in the process.• Identifies non-value added steps.

•Used in conjunction with brainstorming to produce potential factors and sub-factors causing a particular outcome to vary.

•Identifies factors to be held constant (C), noise factors (N), and critical factors for possible experimentation (X)

Data 1 Pareto Chart

0

2

4

6

8

10

12

14

16

18

20

Brown Yellow Orange Red Blue Green

Color

Qua

ntity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ComponentFailureMode FailureEffect S Cause O D R “Fool Proof” Plan

Define/Measure/AnalyzeDefine/Measure/Analyze

Process Flow DiagramsProcess Flow Diagrams•• Graphical representation Graphical representation

of process in sequential of process in sequential order.order.

•• Identifies critical steps, Identifies critical steps, bottlenecks & reworks.bottlenecks & reworks.

•• Suggests data collection Suggests data collection points.points.

•• Identifies steps which Identifies steps which might not add value.might not add value.

Process Step

Output

Decision?

Input

No

Yes

3-8

Define

Current Process Flow

Start

Complete form onIntranet; Obtain

approvals and fax toSkytel

Form CompleteNo

Skytel Process beforeservice activation &

pager issuance

Skytel Sends outpager

2

2

Service activated byemployee

Term list receivedfrom HR

No

Yes

Service is cancelledand pager is returned

to Skytel.

Sony receives paperinvoice

Invoice Reconiliation

Random check on5 usersCross check terms/cancellationsCursory review ofcharges

Excel doc sent to A/Pfor processing (budget

code, amt, etc.).

Manually processbill & send check

Email to Term'smanager-

Does ee havepager?

Yes

If "coam"(Sony ownedpager) then Corparate

Purchasing advisesDept. to redeploy

End

3

3

End

Is pagerrented?

Pager is "coam"(Sony owned)Corp. Purch.

advises BusinessUnit to redeploy.

No

Yes

Consolidation ofinvoice so A/P can

process

PROBLEM: Nodocumentationgoes to Sony to

identify new users

PROBLEM:Manually intensive

steps required

NEW PROJECTSPAWNED

PROBLEM: Manuallyintensive step

requires A/P tomanually key invoice

into system

NEW PROJECT SPAWNED

Pager Aquisition Process Pager Redeployment Process Prepymt. Audit & Invoice Process

PROBLEM: Nodatabase; HR doesnot know who has

pagers

NEW PROJECTSPAWNED: Matt

Whelan "HR TermChecklist"

Causes

MaterialsManpower

Methods

Effect

Machines

Environment

Meas. System

Cause & Effect DiagramsCause & Effect Diagrams(the Fishbone)(the Fishbone)

•• Structured brainstorming to identify possible“root causes” of Structured brainstorming to identify possible“root causes” of process variance.process variance.

•• Identifies factors that should be held constant, factors which Identifies factors that should be held constant, factors which might be good candidates for experimentation, and factors might be good candidates for experimentation, and factors beyond human or economic control.beyond human or economic control.

Define

3-9

CauseCause and Effect Diagramand Effect Diagram

PROCEDURESPROCEDURES MEASUREMENTSMEASUREMENTS OTHEROTHER

MATERIALMATERIALEQUIPMENTEQUIPMENTPEOPLEPEOPLE

Ad Planner

C

Account Sales Forecasts

C

Sales Forecast SysC

Order Fill RateN

CHard

Cop

y

Wkly

N

Sales Reps

Type & Timing

N

SALESFORECASTPROCESS

SALESFORECASTPROCESS

Forecast Analyst

CSR’s

Buyer/Rebuyer

* Procurement

* Factory

C

C

C

N

N

N

Data TrackerC

Excel Data BaseC

Account Data BaseC

EDI

Historical Ship Data

POS DataC

C

Mthly

Customer Forecast

Historical Analysis

Ad Planner

Accts.

Models

Data Entry

C

C

C

Lead Time

In Stock %

Inventory Level

Actual Ship vs. Forecast

N

N

C

Model

Acct.

Catego

ry

Wk /

Mth.

Back Orders

Acct +/- Selling

Competition

Model Changes

Technology/Market

N

N

N

N

N

INPUTSINPUTSSources of variability.

PeopleMaterial

Equipment

Polices

Procedures

Methods

Environment

OUTPUTSOUTPUTSHow the process

is measured.

A Service

A Product

A Task

PROCESSPROCESSor ACTIVITYor ACTIVITY

Blending inputs Blending inputs to attain a to attain a

desired output.desired output.

IPOIPO(a.k.a.: Input Output Chart)(a.k.a.: Input Output Chart)

Define

National Sales Meeting

Airfare Purchasing

Process in the NY/NJ Area

Office

IPO Diagram

High Airfare Costs Incurred by NY/NJ

Area Office

Policy & Procedures

Number of Tickets

Negotiated Rates

Lead Time (Gap Between Purchase &

Travel)People

Measure/Analyze

Measure• Gather data that

addresses problem statement.

• Write it down, show me the data, say it with a graph.

Analyze• Statistically

analyze factors that cause variance.

• Surveying, brainstorming and voice of customer.

The Old Way

Lots of guessing.Lots of guessing.

How We Identify Causes of a Problem

Data & process knowledge.Data & process knowledge.

The Way

Pareto DiagramsPareto Diagrams

• A bar chart for non-numerical

categorical descriptors whose bars

are in descending order

• Used to identify and separate the

most frequently occurring categories

from the less important categories

3-10

Measure/AnalyzeMeasure/Analyze

Best Buy Returns ProcessOctober 1999 - September 2000

Pareto Chart

$102,683

$65,257

$44,013

$313

79%

100% 100%

48%

$0

$50,000

$100,000

$150,000

$200,000

Mobile General Audio Telecom Accessory

Division

$'s

Ret

urne

d

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


M&M ExercisePareto Chart

0

50

100

150

200

250

300

350

400

450

Brown Red Green Yellow Blue Orange

Group

# O

bser

vatio

nsMeasure/AnalyzeMeasure/Analyze

History of Actual OutcomesRoselle - October '99

0

5

10

15

20

25

30

35

40

45

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

CALENDAR DAYS PORT TO STN AVAIL

# of

Con

tain

ers

Source: SEL CTracks - Total 402 containers.

Survey data - class width = 1

95% of activity exceeded USL (12 days).

Histogram

0 0

3

5

4

2

0 00

1

2

3

4

5

6

53.0 to <=54.0

54.0 to <=55.0

55.0 to <=56.0

56.0 to <=57.0

Number Per Bag

# O

bser

vatio

nsNormal Distribution Mean = 55.286Std Dev = 1.1387KS Test p-value = .3354

Failure Mode and Effect AnalysisFailure Mode and Effect AnalysisComponent Failure Mode Failure Effect S Cause O D R “Fool Proof” Plan

S = Severity of Failure

1: Low 3: Moderate 5: High

O = Probability of Occurrence


D = Probability of Escaped Detection


R = S*O*D = Risk Estimate


3-12

•• Rating system to quantify the likelihood that a particular Rating system to quantify the likelihood that a particular failure scenario will occur.failure scenario will occur.

•• Helps prioritize project activity.Helps prioritize project activity.

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Month

From April 1999 through March 2001 - 24 months

Percent Shipped Direct

Example Run ChartExample Run Chart

Control Chart• Used to identify when special

causes are affecting the processaverage or variation.

• Separates natural variation fromspecial causes of variation

• Monitors process performance overtime

• Helps reduce process variability

UCL

CENTERLINE

LCL

Regression Modeling• Develops a model relating a

response variable to inputvariables

• Allows prediction of responsesat levels other than where datawas collected

• Quantifies the strength of themodel

• Identifies outliers

y = 18 - .65x

y

5 10 15 20

5

10

15

20

x

Design of Experiments

• Systematizes an efficient way tocollect data

• Used to identify important factorsaffecting the process

• Identifies important interactionsbetween process variables

• Can be used to optimize a process

• Used to build a model relating howinputs affect the outputs

Quality Function Deployment• Identifies customer

requirements• Uses customer

requirements andbenchmark data to identifycritical parameters

• Weighting scheme ratesthe importance of criticalfactors

Scatter Diagrams

( )

• Shows the relationship betweentwo variables (positive, negative,none)

• Provides visual estimate ofcorrelation coefficient (strengthof a linear relationship)

• Allows “eyeball” fit of the data• Identifies outlying points

outliers

Weighted Priorities

Customer Requirements

Rating

CTQ’s

B AB y1 y3 y3 . . . y s1 - - +2 - + -3 + - -4 + + +

Run A B AB y1 y2 y3 . . . y s1 - - +2 - + -3 + - -4 + + +

Ay +yΔ A

2= B + A*B

Δ AB

2

Δ B

2+

¯ˆ +

δAB

2A*B+

δB

2BS = S +

δA

2A

Gage Capability Study• Determines proportion of

total variability in theprocess attributed to themeasurement system

• Estimates precision andaccuracy of the measuringsystem

• Repeatability andreproducibility are studied

UCL

LCL

x=

5

10

15

20

25

30

35

2000 2200 2400 2600 2800 3000 3200 3400

Weight (lbs)

Mile

age

(mpg

)


Improve/Control Phases

ImproveImprove

With team member’s “buy-in” improvements are implemented.

Did the improvement help? Yes-move on to the Control

Phase. No-re-evaluate the process

factors.

ControlControl

Establish a control system, assign owner(s), a timeline for reviews and sustain.

Track COPQ savings for 12 months.

ControlImproved

Analyzed

Measured

Defined

What is the Impact to the Corporate Culture?

•• COPQ = Cost of Poor Quality.COPQ = Cost of Poor Quality.

•• Waste.Waste.

•• An activity or transaction which has to be done An activity or transaction which has to be done more than once.more than once.

•• Reviews or reReviews or re--check because an input isn’t trusted.check because an input isn’t trusted.

•• Lost opportunity because resources aren’t properly Lost opportunity because resources aren’t properly focused or are consumed fighting poor processes.focused or are consumed fighting poor processes.

What is “COPQ”?What is “COPQ”?

Common LanguageCommon Language

How Six Sigma Makes a Difference

•• Cultural ChangeCultural Change--More sharing More sharing and better understanding!and better understanding!

•• Meetings that go Meetings that go nowhere…put them on track!nowhere…put them on track!

•• Don’t forget to Don’t forget to show me the data!show me the data!

How Six Sigma Makes a Difference

What are the Roles in Six Sigma?

Team MembersGreenBeltsBlackBelts

Master BlackBeltsChampions

Six Sigma ChampionsSix Sigma Champions

•• Learn Six Sigma methodology. Learn Six Sigma methodology.

•• Create the vision and inspire and foster climate for Create the vision and inspire and foster climate for improvement.improvement.

•• Legitimize and take ownership of projects Legitimize and take ownership of projects ---- specify project specify project metrics.metrics.

•• Select Green Belt candidates.Select Green Belt candidates.

•• Express interest and engage Green Belts and Black Belts in Express interest and engage Green Belts and Black Belts in regular project reviews.regular project reviews.

•• Recognize and reward success.Recognize and reward success.

•• Help eliminate barriers to success and provide resourcesHelp eliminate barriers to success and provide resources

Six Sigma Master BlackBeltsSix Sigma Master BlackBelts

•• Devote six weeks to formal Six Sigma instruction, Devote six weeks to formal Six Sigma instruction, internshipinternship

•• Teach courses for SELTeach courses for SEL

•• Work on curriculum developmentWork on curriculum development

•• Mentor BlackBelts Mentor BlackBelts

Six Sigma BlackBeltsSix Sigma BlackBelts

•• Devote four weeks to formal Six Sigma instruction Devote four weeks to formal Six Sigma instruction

•• Assigned by the head of the Business UnitAssigned by the head of the Business Unit

•• Work with Business Unit GreenBelts, mentoring projectsWork with Business Unit GreenBelts, mentoring projects

•• Work with Champions on project selection/completionWork with Champions on project selection/completion

•• Assist with Six Sigma tools, and provide instruction to BUAssist with Six Sigma tools, and provide instruction to BU

•• Ideally fulltime devotion to Six Sigma Ideally fulltime devotion to Six Sigma

•• Lead projects that have a big impact to the Business UnitLead projects that have a big impact to the Business Unit

Six Sigma Green BeltsSix Sigma Green Belts

•• DevoteDevote two weeks to formal instruction of Six Sigma two weeks to formal instruction of Six Sigma methodology & tools. methodology & tools.

•• Work with Business Unit Champion and Black Belt to identify Work with Business Unit Champion and Black Belt to identify opportunities for improvement.opportunities for improvement.

•• Devote 20% of their time to Six Sigma projects.Devote 20% of their time to Six Sigma projects.

•• Lead crossLead cross--functional teams which spearhead process functional teams which spearhead process improvements.improvements.

•• Keep projects on schedule.Keep projects on schedule.

•• Sustain the gains of their projects.Sustain the gains of their projects.

What are the Goals of Six Sigma?

IdeasIdeas

Data & Data & knowledgeknowledge

ToolsTools

Customer Customer SatisfactionSatisfaction

Company Company ValueValue

Six Sigma Is About...

Six Sigma is...

• 3.4 Defects out of 1 million opportunities

• Data driven Business Strategy

• Leadership training

• Methodology

• Tools to use in everyday business situations

• Common Language for better team dynamics

• Organized infrastructure-Champions, Belts & teamwork

• Creating a cultural change at Sony

Competitors fight us for market share with lower

prices = pressure on earnings.

Investors want greater earnings, ROI, & growth in

economic value.

The squeeze between competition and investors is the COMPELLING ARGUMENT

for Six Sigma..

Q & A Session

Documents

Handbook of Six sigma