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INTRODUCTION TOSIX SIGMA

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SIX SIGMA IS DEFINED AS

• A STRUCTURED , SYSTEMATIC , TEAM DRIVEN, DATA DRIVEN APPROACH TO ACHIEVING BUSINESS EXCELLENCE.

• SIX SIGMA IS A PHILOSOPHY

• WE CAN ALSO LOOK AT IT AS A SET OF TOOLS AND TECHNIQUES FOR ACHIEVING BUSINESS RESULTS.

WHAT IS SIX SIGMA?

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Six Sigma – a way of life for people who may not have even heard of management tools

No of defects : 1 in 8 million transactions, Sigma level : 7 sigma

Dabbas are collected from customers' homes

At the nearest railway station, they are sorted according to the destination station and are loaded in crates onto trains.

At the destination station they are unloaded by other dabbawalas and re-

sorted. The 100- kg crates of carriers are delivered, picked up at 1:30 p.m., and

returned whence they came

7-8 am 10:15 – 10:45 am 12:00 to 12:30 pm

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They do it with codes and colours

Collection Point

Andheri

LokhandwalaComplex

Destination Details

Nirmal Bldg

11th Floor

Nariman Point

Dabbawala identification at destination

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What does this tell us Attaining six-sigma is not about usage of statistics but about

• discipline, • customer focus,• simplicity, • robust process, • robust system for managing the process • and belief in the process

But even if a company operated in Six Sigma fashion if its overall strategy is weak or the market environment is changing, Six Sigma might be less successful if not linked to the business needs.

It is about getting our Corporate Strategy & Operational Excellence right.

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Six Sigma can also be looked at as1. Six Sigma as a culture of continuous improvement

• Improving business performance through greater customer satisfaction, profitability & competitiveness by process improvements

• it is about learning to build processes that deliver flawless quality of output continuously

2. Six Sigma as a stretch goal• Improvement in performance 10 X every 2 years• Achieving 3.4 defects per million

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TO REDUCE VARIATION TO REDUCE LEAD TIME TO REDUCE DEFECTS/ ERRORs TO IMPROVE YIELD TO ENHANCE CUSTOMER SATISFACTION TO IMPROVE THE BOTTOMLINE

THE GOALS OF SIX SIGMATHE GOALS OF SIX SIGMA

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TWO MEASURES OF A PROCESS

•Central Tendency

•Dispersion

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Customer may never observe mean performance

But

Always feel variation around the mean

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We normally study and report Averages

The problem is - Average never happens

What Customer Feels is – Variation

And The Organization's performance depends on Variation

Don’t Look at Averages

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What we See and What We Get

Our Performance – Average - 20 Days

Delivery Commitment to Customer = 25 Days

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TargetValue

USL

CustomerDissatisfaction

What we See and What We Get

20 Days

25 Days

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What we See and What We Get

Our Performance – Average = 25.0 kgs

Bag Weight = 25 Kgs

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TargetValue

USL

Loss

What we See and What We Get

25 Kgs

24.8 Kgs 25.2 Kgs

CustomerDissatisfaction

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CenterProcess

ReduceSpread

Off-Target Too Much Variation

Centered On-Target

The Statistical Objective of Six Sigma

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The Normal Curve

2 345 6

68.26 %

95.46 %

99.73 %99.9937 %

99.999943 %99.9999998 %

2 345

-6 -5 -4 -3 -2 +1 +2-1 +3 +4 +5 +6

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Six Sigma Statistically

Statistically Six Sigma is the area covered by the specification limits is 6 standard deviations on either side from mean for a normal distribution.

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3 Sigma Process

2 345 6

68.26 %

95.46 %

99.73 %99.9937 %

99.999943 %99.9999998 %

2 345

-6 -5 -4 -3 -2 +1 +2-1 +3 +4 +5 +6

LSL USL

Rej. Rej.

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3

6

99.73 %

99.9999998 %

3

-6 -3-2

+3 +6

LSL USL

Rej. Rej.

Six Sigma Process

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SIGMA RATING & PPM ARE CORRELATEDSIGMA RATING & PPM ARE CORRELATED

Sigma Rating PPM2 308,5373 66,8074 6,2105 2336 3.4

Process Defects per Capability Million Opportunities

SIGMA RATING A PERFORMANCE MEASURE

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SHOULD ALL PROCESSES BE AT SIX SIGMA?

The airline fatality rate is about 6.5 sigma, but airline baggage handling is about 4 sigma

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SIX SIGMA PROJECT - STEPS

There are 5 fundamental steps involved in applying the breakthrough strategy for achieving Six Sigma.

» Define Define» Measure Measure» Analyze Analyse» Improve Design» Control ValidateDMAIC DMAD

V

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The Six Sigma Process

Measure Analyze

Practical Problem Statistical Problem

Practical Solution Statistical Solution

Control Improve

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Objective of Six Sigma

Y = f (X)

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MAIC Funnel

Process Map, C & E Matrix, FMEA, MSA, Capability Study

Multi-Vari, Correlation/

Regression Hypothesis

Tests, ANOVA

Multi-Factor ANOVA,

2k Factorial Expts.,

Fractional Factorials

Control Plans, SPC,

Mistake Proofing

3 – 6Critical x’s

4 – 8Critical x’s

8 – 15 x’s

30 – 50 Inputs

Analyse

Measure

Improve

Control

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METHODOLOGY

Identify Six Sigma Projects

Carryout Six Sigma Projects

Integration with Business Planning Process

Institutionalization

Management Team Buy-in

Creating Organization for Six Sigma

Training People on Six Sigma

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Basic Tenets of Six Sigma

•Customer Orientation

•Process Orientation

•Speak with facts

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Speak with Facts

•If we can’t express something in numbers, we don’t know much about it.

•If we don’t know much about it, we can’t control it

•If we can’t control it, we are at the mercy of chance.

Let us talk with facts because;

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Where Six Sigma does not work

Poorly defined problems

No clear measurement metrics

Non availability of data/development actions

One off assignments/ no process exists

No team assigned or No Review mechanism planned

Not linked to Reward and Recognition system

Some softer reasons: Low on priority, focus, support, guidance etc.

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Roadmap to Six Sigma

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Identify All Possible CausesDefine Performance Parameter ‘Y’

Validate Measurement System for ‘Y’

Establish Baseline Process CapabilityDefine Performance ObjectivesIdentify Variation Sources

Establish Cause & Effect RelationshipDevelop Feasible SolutionsValidate & Implement Solutions

Step 4 Step 5Step 6 Step 7Step 8Step 9

Step 10Step 11Step 12

Develop & Implement Control Plans Monitor Process for SustenanceInstitutionalize Improvements

Step 13Step 14 Step 15

Step 1 Step 2Step 3

Identify Improvement OpportunityDevelop Team CharterDefine Process Map

The DMAIC Road Map

Define

Measure

Analyze

Improve

Control

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Step 1 - Identify Improvement Opportunities

• Identify Project Ys & Link it to Big Y

Step 2 - Develop Team Charter

• Develop The Business Case• Develop The Problem and Goal Statement• Determine Project Scope• Select Team & Define Roles• Set Project Milestones

Step 3 - Define Process Map

• Process Map Connecting Customer to Process

Define Phase Steps

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• Project Charter• CTQ Matrix• SIPOC• QFD

Tools Commonly Used during define Phase

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PROCESS CTQKPOVKPIV

KPIV

DEFINE Clearly state the Problem in terms of “Defects” or “Variation” which Upset the Customer

Define Phase - Goal

KPIV

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Measure Phase - Steps

Step 4 – Identify All Possible Causes

• Identify Measurable Y and All Possible Causes of Variation (Xs)

Step 5 - Define Performance Parameter

• Design the Measurement System• Determine & Confirm Specifications Limits For “Y”

Step 6 – Validate Measurement System for ‘Y”

• Confirm Adequacy for Measurement System for “Y”

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1. Data collection Plan/Check Sheets2. Stratification (Multi Vari Analysis)3. Control Charts4. Frequency Plot/Normal Probability Plot (Six Pack)5. Gage R & R6. Pareto Chart7. Prioritization matrix8. FMEA/Risk Analysis9. Cp, Cpk, Pp, Ppk (Process Capability - Normal, Binomial or Poisson)

Tools Commonly Used during Measure Phase

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Control Charts

1,1

1,2

1,3

1,4

1,5

1,6

1,7

1,8

1 3 5 7 9 11 13 15

Number

Wal

l thi

ckne

ss (m

m)

Actual Reading

UCL 1,69

LCL 1,19

Histograms

34 4 4

5 5

8

4

100

1

2

3

4

5

6

7

8

9

Number of sick days taken per emplyee

0

5

10

15

20

25

30

0 50 100 150

Cusomer size (KUSD)

Def

ect p

rodu

cts

(pcs

)

Scatter Diagram

Check SheetsCustomer October

Complaints Week 1 Week 2 Week 3 Week 4 TotalError onstatement

IIII IIIIIIII IIII I

IIII IIII IIIIIIII IIII

IIII IIII IIIIIIII IIII I

IIII IIIIIIII IIII I

92

Latestatement

IIII IIII IIII I IIII IIII II 28

Products notoperated

IIII IIII IIIIIIII IIII IIIIIIII

IIII IIII IIII IIII IIII IIIIIIII IIII IIIIIIII II

IIII IIII IIIIIIII IIII IIII

117

Total 66 45 68 58 248

Charts and Graphs

0

50

100

1987 1988 1989 1990 1991

7 Quality Tools7 Quality Tools

Charts and GraphsCheck SheetsPareto ChartsCause and Effect (Ishikawa/Fishbone) DiagramsScatter DiagramsHistogramsControl Charts Pareto Charts

050

100150200250300350400450

Ordershipped

late

Wrongparts

shipped

Brokenparts

Wrongorder

Rudeservice

Clericalerrors

Other Total

Num

ber o

f cus

tom

er c

ompl

aint

(J

une

- Dec

embe

r)

0102030405060708090100

%

Cause and Effect Diagram(Ishikawa/Fishbone)

Problem

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MEASURMENTS

Run 1

Run 2

Run 3

Run 4

Run 5

Run 6

Run 7

IF WE CAN’T EXPRESS WHAT WE KNOW IN THE FORM OF NUMBERS,WE REALLY DON’T KNOW MUCH ABOUT IT

Dr Mikel Harry

LET DATA BE THE BASE TO OUR ACTIONS!LET DATA BE THE BASE TO OUR ACTIONS!

Importance of Measurement

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PROCESS CTQ

KPIV

KPOVKPIV

KPIV

KPIV

MEASUREDescribe the Performance of the process Quantitatively and Identify Key Inputs

Measure Phase - Goal

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Analyze Phase - Steps

Step 7 - Establish Baseline Process Capability

• Establish Current Performance (9-12 Months Data)

Step 8 - Define Performance Objective

• Statistically Define the Goal of the Project

Step 9 - Identify Variation Sources

• Identify Key Xs which are expected to influence Y

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1. Brainstorming (Why - Why Analysis)2. Cause and Effect Diagram3. Control Charts4. Multi vari Analysis5. Test of hypothesis6. Design and Analysis of Experiments7. Scatter Plots/Regression Analysis

Tools Commonly Used During Analyze Phase

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PROCESS CTQ

KPIV

KPOVKPIV

KPIV

KPIVAnalyzeStatistically Describe the Relationship BetweenINPUTS and the OUTPUTSFind the Inputs with the BIGGEST IMPACT on the OUTPUT

Analyze Phase - Goal

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Improve Phase Steps

Step 10 – Establish Cause & Effect Relationship

• Determine Vital few Xs which Cause Change in Y• Establish Relationship Y v/s Vital Xs

Step 11 – Develop Feasible Solutions

• Determine Optimal Conditions• Develop Counter Measures and Solutions to achieve desired

state• Carry out Risk Analysis

Step 12 – Validate & Implement Solutions

• Pilot the Solution & Implement

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1. Consensus2. Creativity3. Data Collection/Check Sheets4. DOE5. FMEA6. Hypothesis testing7. Multi-Vari analysis8. Process capability Evaluation

Tools commonly Used during Improve Phase

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PROCESS CTQ

KPIV

KPOVKPIV

KPIV

KPIV

ImproveSystematically EXPERIMENT with the INPUTS to Find the Combination Which Delivers the OPTIMAL OUTPUT

High

High

Low

Medium

Improve Phase - Goal

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Control Phase Steps

Step 13 – Development & Implement Control Plans

• Implement Control Plans

Step 14 – Monitor Process for Sustenance

• Monitor Process for 3 Months to ensure sustenance• Determine Capability & Performance after Improvement• Ensure there is no adverse effect

Step 15 – Institutionalize Improvements

• Communicate Result • Link changes with the Quality & Operational Systems

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1. Control Charts2. Data Collection/Check Sheet3. Charts to Compare Before & After4. Process Capability Evaluation5. Control Plans6. SOP’s/WI’s/Operator Training7. Poka-Yoke/Fool Proofing

The Tools Commonly Used in control Phase

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PROCESS CTQ

KPIV

KPOVKPIVKPIV

KPIV

Lock In the INPUTS to Routinely generatethe OPTIMAL OUTPUT

Control Phase - Goal

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PROCESS CTQ

KPIV

KPOVKPIV

KPIV

KPIV

1. Statistically proven Relationship Between Inputs & Outputs

2. Systematic (Improvement & Control)

What makes Six Sigma Different

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Target

USLLSL

CenteredProcess

ReducedSpread

Defects

The Statistical Objective of Six Sigma

Reduce Variation & Center Process—Customers feel the variation more than the mean

Process Off Target Excessive VariationTarget

USLLSL

Target

USLLSL

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End Of Introduction