PPT - Six Sigma Introduction

Introduction to Six Sigma

Topics (Session 1)Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

Six Sigma is. . .A performance goal, representing 3.4 defects for

every million opportunities to make one.

A series of tools and methods used to improve or design products, processes, and/or services.

A statistical measure indicating the number of standard deviations within customer expectations.

A disciplined, fact-based approach to managing a business and its processes.

A means to promote greater awareness of customer needs, performance measurement, and business improvement.

μ

σ

What’s in a name?

Sigma is the Greek letter representing the standard deviation of a population of data.

Sigma is a measureof variation

(the data spread)

What does variation mean?Variation means that a

process does not produce the same result (the “Y”)every time.

Some variation will exist in all processes.

Variation directly affects customer experiences.

Customers do Customers do notnot feel averages! feel averages!

-10

-5

0

5

10

15

20

Measuring Process PerformanceThe pizza delivery example. . .

Customers want their pizza delivered fast!

Guarantee = “30 minutes or less”

What if we measured performance and found an average delivery time of 23.5 minutes?On-time performance is great, right?Our customers must be happy with us, right?

How often are we delivering on time?Answer: Look at the variation!

Managing by the average doesn’t tell the whole story. The average and the variation together show what’s happening.

s

x

30 min. or less

0 10 20 30 40 50

Reduce Variation to Improve PerformanceHow many standard deviations can you “fit” within customer expectations?

Sigma level measures how often we meet (or fail to meet) the requirement(s) of our customer(s).

s

x

30 min. or less

0 10 20 30 40 50

Managing Up the Sigma Scale

Sigma % Good % Bad DPMO

1 30.9% 69.1% 691,462

2 69.1% 30.9% 308,538

3 93.3% 6.7% 66,807

4 99.38% 0.62% 6,210

5 99.977% 0.023% 233

6 99.9997% 0.00034% 3.4

Examples of the Sigma ScaleIn a world at 3 sigma. . .

There are 964 U.S. flight cancellations per day.

The police make 7 false arrests every 4 minutes.

In MA, 5,390 newborns are dropped each year.

In one hour, 47,283 international long distance calls are accidentally disconnected.

In a world at 6 sigma. . .

1 U.S. flight is cancelled every 3 weeks.

There are fewer than 4 false arrests per month.

1 newborn is dropped every 4 years in MA.

It would take more than 2 years to see the same number of dropped international calls.

TopicsUnderstanding Six Sigma




How YOU can use Six Sigma

The Six Sigma Evolutionary Timeline

1736: French mathematician Abraham de Moivre publishes an article introducing the normal curve.

1896: Italian sociologist Vilfredo Alfredo Pareto introduces the 80/20 rule and the Pareto distribution in Cours d’Economie Politique.

1924: Walter A. Shewhart introduces the control chart and the distinction of special vs. common cause variation as contributors to process problems.

1941: Alex Osborn, head of BBDO Advertising, fathers a widely-adopted set of rules for “brainstorming”.

1949: U. S. DOD issues Military Procedure MIL-P-1629, Procedures for Performing a Failure Mode Effects and Criticality Analysis.

1960: Kaoru Ishikawa introduces his now famous cause-and-effect diagram.

1818: Gauss uses the normal curve to explore the mathematics of error analysis for measurement, probability analysis, and hypothesis testing.

1970s: Dr. Noriaki Kano introduces his two-dimensional quality model and the three types of quality.

1986: Bill Smith, a senior engineer and scientist introduces the concept of Six Sigma at Motorola

1994: Larry Bossidy launches Six Sigma at Allied Signal.

1995: Jack Welch launches Six Sigma at GE.

Six Sigma Companies

Six Sigma and Financial Services





DMAIC – The Improvement Methodology

Objective:

DEFINE the opportunity

Objective:

MEASURE current performance

Objective:

ANALYZE the root causes of problems

Objective:

IMPROVE the process to eliminate root causes

Objective:

CONTROL the process to sustain the gains.

Key Define Tools:• Cost of Poor

Quality (COPQ)• Voice of the

Stakeholder (VOS)

• Project Charter• As-Is Process

Map(s)• Primary Metric

(Y)

Key Measure Tools:

• Critical to Quality Requirements (CTQs)

• Sample Plan• Capability

Analysis• Failure Modes

and Effect Analysis (FMEA)

Key Analyze Tools:

• Histograms, Boxplots, Multi-Vari Charts, etc.

• Hypothesis Tests• Regression

Analysis

Key Improve Tools:

• Solution Selection Matrix

• To-Be Process Map(s)

Key Control Tools:

• Control Charts• Contingency

and/or Action Plan(s)

Define Measure Analyze Improve Control

Define – DMAIC ProjectWhat is the project?

What is the problem? The “problem” is the Output (a “Y” in a math equation Y=f(x1,x2,x3) etc).

What is the cost of this problemWho are the stake holders / decision makersAlign resources and expectations

Six SigmaSix Sigma

Project Project CharterCharter

Voice of the

Stakeholder

S takeho lders

$

Cost of Poor

Quality

Define – As-Is ProcessHow does our existing process work?

Move-It! Courier Package HandlingProcess

Acc

ou

ntin

gF

ina

lizin

gD

eliv

ery

Out-Sort SupervisorOut-Sort ClerkAccounts

SupervisorAccounts

Receivable ClerkWeight Fee ClerkDistance Fee ClerkIn-Sort SupervisorIn-Sort ClerkMail ClerkCourier

Observ e packageweight (1 or 2) onback of package

Look upappropriate

Weight Fee andwrite in top middlebox on package

back

Take packagesf rom Weight FeeClerk Outbox toA/R Clerk Inbox.

Add Distance &Weight Fees

together and writein top right box on

package back

Circle Total Feeand Draw Arrow

f rom total tosender code

Take packagesf rom A/R Clerk

Outbox toAccounts

Superv isor Inbox.

Write Total Feef rom package in

appropriateSender column onAccts. Supv .’s log

Add up Total # ofPackages and

Total Fees f romlog and createclient inv oice

Deliv er inv oice toclient

Submit log toGeneral Managerat conclusion of

round.

Take packagesf rom Accounts

Superv isorOutbox to Out-

Sort Clerk Inbox.

Draw 5-point Starin upper right

corner of packagef ront

Sort packages inorder of Sender

Code bef oreplacing in outbox

Take packagesf rom Out-Sort

Clerk Outbox toOut-Sort

Superv isor Inbox.

Observ e senderand receiv er

codes and makeentry in Out-SortSuperv isor’s log

Deliv er Packagesto customers

according to N, S,E, W route

Submit log toGeneral Managerat end of round

Submit log toGeneral Managerat end of round

Does EVERYONE agree how the current process works?

Define the Non Value Add steps

Define – Customer RequirementsWhat are the CTQs? What motivates the customer?

Voice of the CustomerVoice of the Customer Key Customer IssueKey Customer Issue Critical to QualityCritical to QualitySECONDARY RESEARCH

PRIMARY RESEARCH

Surveys

Surveys

OTM

Market DataIn

du

stry

In

tel

List

en

ing

Post

s

Industry Benchmarking

Focus Groups

Customer Service

Customer Correspondence

Obser-vations

Measure – Baselines and CapabilityWhat is our current level of performance?

50403020100

95% Confidence Interval for Mu

26.525.524.523.522.521.520.519.5

95% Confidence Interval for Median

Variable: 2003 Output

19.7313

8.9690

21.1423

Maximum3rd QuartileMedian1st QuartileMinimum

NKurtosisSkewnessVarianceStDevMean

P-Value:A-Squared:

26.0572

11.8667

25.1961

55.290729.610023.147516.4134 0.2156

1000.2407710.238483

104.34910.215223.1692

0.8540.211

95% Confidence Interval for Median

95% Confidence Interval for Sigma

95% Confidence Interval for Mu

Anderson-Darling Normality Test

Descriptive Statistics Sample some data / not all data Current Process actuals

measured against the Customer expectation

What is the chance that we will succeed at this level every time?

OthersAmount

Late

41779 4.017.079.0

100.0 96.0 79.0

100

50

0

100

80

60

40

20

0

Defect

CountPercentCum %

Pe

rce

nt

Co

unt

Pareto Chart for Txfr Defects

Six SigmaSix Sigma

Analyze – Potential Root CausesWhat affects our process?

y = f (xy = f (x11, x, x22, x, x33 . . . x . . . xnn))

Ishikawa Diagram

(Fishbone)

Analyze – Validated Root CausesWhat are the key root causes?

OthersAmount

Late

41779 4.017.079.0

100.0 96.0 79.0

100

50

0

100

80

60

40

20

0

Defect

CountPercentCum %

Pe

rce

nt

Co

unt

Pareto Chart for Txfr Defects

OtherClerical

Currency

2 31211.817.670.6

100.0 88.2 70.6

15

10

5

0

100

80

60

40

20

0

Defect

CountPercentCum %

Pe

rce

nt

Co

unt

Pareto Chart for Amt Defects

Six SigmaSix Sigma

y = f (xy = f (x11, x, x22, x, x33 . . . x . . . xnn))Critical Xs

Process Simulatio

n

Data Stratificatio

n

Regression Analysis

Experim ental Design

Improve – Potential SolutionsHow can we address the root causes we identified?

Address the causes, not the symptoms.

y = f (xy = f (x11, x, x22, x, x33 . . . x . . . xnn))

Critical Xs

Decision

Evaluat

e

Clarify

Generat

e

Divergent | ConvergentDivergent | Convergent

Improve – Solution SelectionHow do we choose the best solution?

Solution Sigma Time CBA Other Score

Time

Quality

Cost

Six SigmaSix Sigma

Solution Solution ImplementatioImplementatio

n Plann Plan

Solution Selection Matrix

☺ Nice Try

Nice Idea X

Solution Right Wrong

Imp

lem

enta

tio

n

Bad

G

ood

Control – Sustainable BenefitsHow do we ”hold the gains” of our new process?

0 10 20 30

15

25

35

Observation Number

Indi

vidu

al V

alue

Mean=24.35

UCL=33.48

LCL=15.21

Some variation is normal and OK How High and Low can an “X” go yet not materially impact

the “Y” Pre-plan approach for control exceptions

Process Owner: Date:Process Description: CCR:

Measuring and Monitoring

Key Measurements

Specs &/or

Targets

Measures (Tools)

Where & Frequency

Responsibility (Who)

Contingency (Quick Fix)

Remarks

P1 - activity duration, min.

P2 - # of incomplete loan applications

Process Control System (Business Process Framework)

Direct Process Customer:

Flowchart

Custom er Sales Branch ManagerProcessingLoan Service

Manager

1.1

Ap

plic

atio

n &

Re

vie

w1

.2P

roce

ssin

g1

.3C

red

it re

vie

w1

.4R

evi

ew

1.5

Dis

clo

sure

Apply forloan

Reviewappliation for

com pleteness

ApplicationCom plete?

Com pletem eeting

inform ationNo

DFSS – The Design MethodologyDesign for Six Sigma

UsesDesign new processes, products, and/or services from

scratchReplace old processes where improvement will not

sufficeDifferences between DFSS and DMAIC

Projects typically longer than 4-6 monthsExtensive definition of Customer Requirements (CTQs)Heavy emphasis on benchmarking and simulation; less

emphasis on baselining

Define Measure Analyze Develop Verify





How YOU can use Six Sigma

ChampionsPromote awareness and execution of Six

Sigma within lines of business and/or functions

Identify potential Six Sigma projects to be executed by Black Belts and Green Belts

Identify, select, and support Black Belt and Green Belt candidates

Participate in 2-3 days of workshop training

Black BeltsUse Six Sigma methodologies and advanced

tools (to execute business improvement projects

Are dedicated full-time (100%) to Six Sigma

Serve as Six Sigma knowledge leaders within Business Unit(s)

Undergo 5 weeks of training over 5-10 months

Green BeltsUse Six Sigma DMAIC methodology and

basic tools to execute improvements within their existing job function(s)

May lead smaller improvement projects within Business Unit(s)

Bring knowledge of Six Sigma concepts & tools to their respective job function(s)

Undergo 8-11 days of training over 3-6 months

Other Roles

Subject Matter ExpertsProvide specific process knowledge to Six

Sigma teamsAd hoc members of Six Sigma project teams

Financial ControllersEnsure validity and reliability of financial

figures used by Six Sigma project teamsAssist in development of financial

components of initial business case and final cost-benefit analysis

Analytical Tools for Six Sigma and Continuous Improvement: Run Chart

Can be used to identify when equipment or processes are not behaving according to specifications

Can be used to identify when equipment or processes are not behaving according to specifications

0.440.460.480.5

0.520.540.560.58

1 2 3 4 5 6 7 8 9 10 11 12Time (Hours)

Dia

met

er

9-33

Analytical Tools for Six Sigma and Continuous Improvement: Pareto Analysis

Can be used to find when 80% of the problems may be attributed to 20% of thecauses

Can be used to find when 80% of the problems may be attributed to 20% of thecauses

Assy.Instruct.

Fre

quen

cy

Design Purch. Training

80%

9-34

Analytical Tools for Six Sigma and Continuous Improvement: Checksheet

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday

Can be used to keep track of defects or used to make sure people collect data in a correct manner

Can be used to keep track of defects or used to make sure people collect data in a correct manner

9-35

Analytical Tools for Six Sigma and Continuous Improvement: Histogram

Nu

mb

er o

f L

ots

Data RangesDefectsin lot

0 1 2 3 4

Can be used to identify the frequency of quality defect occurrence and display quality performance

Can be used to identify the frequency of quality defect occurrence and display quality performance

9-36

Analytical Tools for Six Sigma and Continuous Improvement: Cause & Effect Diagram

Effect

ManMachine

MaterialMethod

Environment

Possible causes:Possible causes: The results or effect

The results or effect

Can be used to systematically track backwards to find a possible cause of a quality problem (or effect)

Can be used to systematically track backwards to find a possible cause of a quality problem (or effect)

9-37

Analytical Tools for Six Sigma and Continuous Improvement: Control Charts

Can be used to monitor ongoing production process quality and quality conformance to stated standards of quality

Can be used to monitor ongoing production process quality and quality conformance to stated standards of quality

970

980

990

1000

1010

1020

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

LCL

UCL

9-38

Some Japanese TermsGemba – Manufacturing floorMuda – Waste; Non-value added activityPoka-Yoke - Fool proof device are often

small jigs or very simple devices set up to avoid or detect errors

Kaizen – Improvements done to attain 6σ

THANK YOU

Documents

PPT - Six Sigma Introduction