Introduction to Six Sigma - Ketch

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www.ketch.caIntroduction to Six SigmaApplying Statistical Analysis to Business Issueswww.ketch.caObjectives Understand Six Sigma Gain a high-level understanding of the tools methods and application of Six Sigma Learn the basic vocabulary of Six Sigma Understand the roles and responsibilities of Six Sigma practitioners Identify the benefits of Six Sigma as a business improvement methodologywww.ketch.caAgenda Introduction Methodology Roles and Responsibilities Why Six Sigma How to Implement Six Sigmawww.ketch.caIntroduction What Six Sigma means What Six Sigma is The concept of variation Performance and defectswww.ketch.caWhat Six Sigma Means Past definitions of quality focused on conformance to standards, as companies strived to create products and services that fell within certain specification limits. -Mikel Harry and Richard Schroederwww.ketch.caWhat Six Sigma Means ...this Six Sigma journey will change the paradigm from fixing products so they are perfect to fixing processes so that they produce nothing but perfection, or close to it. - Jack Welchwww.ketch.caWhat Six Sigma isMetricBenchmarkVisionPhilosophyMethodToolSymbolGoalValuewww.ketch.caThe Concept of VariationVariety may be the spice of life but, for customers, consistency is King!www.ketch.caThe Concept of VariationEvery repeatable process exhibits variationEvery repeatable process exhibits variationwww.ketch.caMeasuring VariationWe measure variation using standard deviation ()We measure variation using standard deviation ()Xwww.ketch.caPerformance and defectsReducing Variability Is The Essence of Six SigmaReducing Variability Is The Essence of Six SigmaDefects DefectsLSL USLXwww.ketch.caPerformance and Yield23456Defects per Million opportunitiesDefects per Million opportunities3 to 6 20,000 X Improvement...A True Quantum Leap3 to 6 20,000 X Improvement...A True Quantum Leap308,53766,8076,2102333.4YieldYield69.20%93.32%99.38%99.98%99.99%www.ketch.caPerformance in Context99.99966% Good (6 Sigma) 20,000 lost articles of mail per hour Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations per week 340 Passengers with Misplaced Luggage every day 200,000 wrong drug prescriptions each year Seven articles lost per hour One unsafe minute every seven months 1.7 incorrect operations per week 6 Passengers with Misplaced luggage each month 68 wrong prescriptions per year99% Good (3.8 Sigma)www.ketch.caMethodologies Two distinctly different methodologies DMAICDefineMeasureAnalyzeImproveControlWhen a process needs to be improved DMADVDefineMeasureAnalyzeDesignVerifyWhen a process needs to be invented(aka. DFSS-Designed For Six Sigma)www.ketch.caThe Improvement Methodologywww.ketch.caDefineDeliverables1. Identify customer wants2. Project charter3. High-level process mapMeasureMeasureMeasureDefineDefineDefine AnalyzeAnalyzeAnalyze ImproveImproveImprove ControlControlControlwww.ketch.caIdentify Customer WantsDefineDefineDefine Who are your customers? Internal vs. external customers Collect VOC-Voice Of Customer data Interviews Surveys Complaints Focus groups Define CTQs-Critical To Quality measures How does the customer judge your product or service? Project scope Business case Cost benefit Roles & responsibilities Milestones DeliverablesProject CharterDefineDefineDefinewww.ketch.caHigh-level Process MapDefineDefineDefinePROCESS SIPOC / COPISINPUTS OUTPUTS 1) Part Usage2) Inventory3) Credit/Debit to P&L 4) Part5) 1) Part Request2) Physical Inventory 3) Call Transfers 4) Parts5) Customer/EquipmentdataAction PartRequestReceivePart intoWIPUse /ConsumePartFulfill &Ship Part toVendor /NPCPart Required fora Service CallPart Removedfrom WIPCreate PartRequestSUPPLIERS CUSTOMERS1) Technicians2) Buyers3) NPC4) Refurb5) Vendors6) NSC 1) Finance2) Technicians3) Buyers4) NPC5) Vendorswww.ketch.caMeasureMeasureMeasureMeasureDefineDefineDefine AnalyzeAnalyzeAnalyze ImproveImproveImprove ControlControlControlDeliverables1. Identify CTQ characteristic2. Collect data3. Calculate sigmawww.ketch.caIdentify CTQ CharacteristicMeasureMeasureMeasure Getting down to the thing that the project will target using tools like: Detailed process mapping QFD-Quality Functional Deployment Cause & effect analysis FMEA-Failure Modes & Effects Analysiswww.ketch.caIdentify CTQ CharacteristicMeasureMeasureMeasurePage 1Some Technicainsupdate part receiptthrough AntenneaSomeTechnicainscall NSC to havepart receipt updatedSome Technicianscontinue on callW/O updating partreceiptTechnicianPerforms serviceReturn part?Technician holdspart - Intransit /Open P/OSome Techniciansupdate part usageWas part used?Some Techniciansupdate part receiptReturn to NPC/branch logisticsConsumableDispose of part,part out of WIP(A) NPC/branchlogistics fulfill partfrom WIPX-ship?Part received byNPC/branchlogistics(A)Return part direct tovendorPhysically ship partw/ no update,part still in WIPTechnicain advisesP/E or Logistics ofpart returnP/E or logisticsfulfill part from WIPPart received byNPC/branchlogisticsShip part to NPC/branch logisticsNon-ConsumableGE ownedTechnician holdspart - Part still inWIPNoYesYesNoDetailed Process Mappingwww.ketch.caMeasure Identify CTQ Characteristichttp://www.npd-solutions.comQuality Functional Deployment (QFD)MeasureMeasurewww.ketch.caIdentify CTQ CharacteristicMeasureMeasureMeasureCause & Effect Analysis, or Fishbone, or Ishikawa diagramwww.ketch.caIdentify CTQ CharacteristicMeasureMeasureMeasureS ys te m Design Verification Process Potential F M EA N um be r Project IIIS ubs ys te m Failure Mode and Effects Analysis P re pa re d B y Houston MayerC o m po ne nt (Design FMEA) F M EA D a te 22/10/1999D e s ig n Le a d Houston Mayer Ke y D a te R e v is io n D a te 21/08/2000C o re Te a m See Project III R1 Report P a g e 1 o f 6A c t io n R e s ultsIte m / F unc t io nP o te nt ia l F a ilure M o de (s )P o te nt ia l Ef fe c t ( s ) o f F a ilureSevP o te nt ia l C a us e (s ) / M e c ha nis m (s ) o f F a ilureProbC urre nt D e s ig n C o ntro lsDetRPNR e c o m m e nde d A c t io n(s )R e s po ns ibility & Ta rg e t C o m ple t io n D a teA c t io ns Ta ke nCustomer sends in a quote request for product.System, Software, Integration and Shipping requirements overlooked by Customer needs not fully met by delivered system.7 Human error 1 Design configuration tool.3 21 Use configuration tool when available.Closed 10/21/99Requirement entered and verified by Inside Sales in config. tool.Data entry errorSystem compatability requirements not evaluated by config. tool.3 Human error 1 Order verified by a configuration tool.3 9 Continue order verification by configuration tool.Closed 10/21/99Sales identifies need for CII or SHCSpecific packing, labeling and shipping requirements may not be On time delivery and integraty of the product may be compramised 7 Requirements Overlooked.3 Customer Inspection Instruction/ Special Handling Codes Process 3 63 Publish comprehensive procedure for the 1st Article Process.Jun-00 Customer shipping requirements reviewed by quality assurance in FMEA-Failure Modes & Effects Create a data collection plan Perform a MSA Measurement Systems Analysis Gage R & R Attribute R & R Test re-test study Collect dataCollect Calculate process capability Short term (ZST=ST) Long term (ZLT=LT) The 1.5 ShiftDefectsDefectsLSL USLXCalculating SigmaMeasureMeasureMeasurewww.ketch.caAnalyzeMeasureMeasureMeasureDefineDefineDefine AnalyzeAnalyzeAnalyze ImproveImproveImprove ControlControlControlDeliverables1. Identify possible causes2. Narrow down to root cause3. Confirm the Identify sources of variation using: Process map analysis Graphical analysis BrainstormingIdentify Possible CausesAnalyzeAnalyzeAnalyzewww.ketch.caNarrow To Root CausesAnalyzeAnalyzeAnalyzeRegression Plot Confirm statistically significant factors through: Hypothesis testing DOE-Design Of ExperimentY = 1026.02 + 98.0500XR-Sq = 87.9 %P value = Ensure that the effort needed to rectify the issues identified are financially feasible Basic ROI-Return On Investment or cost benefit analysisConfirm The BenefitAnalyzeAnalyzeAnalyzewww.ketch.caImproveMeasureMeasureMeasureDefineDefineDefine AnalyzeAnalyzeAnalyze ImproveImproveImprove ControlControlControlDeliverables1. Generate and select solution2. Implement solution3. Confirm resultswww.ketch.caGenerate & Select SolutionImproveImproveImprove Solution generation through structured brainstorming Solution Selection based upon viability and trade-offsKey CriteriaImportance RatingBenchmark OptionAlternative 1Alternative 2Alternative 3Alternative 4Alternative 5Criteria 1 4 + S + + - -Criteria 2 2 S - S + + +Criteria 3 3 - + - + S SCriteria 4 2 + S + + - +Criteria 5 5 S - S S + SCriteria 6 6 - - - - - -Criteria 7 10 + + + + + +Criteria 8 8 S S S S S SSum of Positives 3 2 3 5 3 3Sum of Negatives 2 3 2 1 3 2Sum of Sames 3 3 3 2 2 3Weighted Sum of Positives 16 13 16 21 17 14Weighted Sum of Negatives 9 13 9 6 12 10Totals 7 0 7 15 5 4Pugh MatrixSolution AlternativesConcept Selection LegendBetter +Same SWorse Comprehensive pilot planning Detailed process maps SOP-Standard Operating Procedures Monitoring plans Contingency planning Risk management planImplement Ensure that an improvement has been made and is consistent with expectations Learn and adapt Re-assess measurement systems Adjust improvements as required Re-calculate sigma Confirm improvement is statistically significantConfirm ResultsImproveImproveImprovewww.ketch.caControlMeasureMeasureMeasureDefineDefineDefine AnalyzeAnalyzeAnalyze ImproveImproveImprove ControlControlControlDeliverables1. Standardization and documentation2. Process monitoring and control3. Closing the projectwww.ketch.caStandardize and DocumentControlControlControl Rollout confirmed solution across business with updated information from pilot Detailed process maps SOP-Standard Operating Procedures Monitoring plans Contingency planning Risk management planwww.ketch.ca70605040302010Subgroup 0605040302010Individual Value2222266Mean=34.19UCL=53.62LCL=14.77403020100Moving Range 1 1 122211R=7.303UCL=23.86LCL=0I and MR Chart for Days Ensure projectxs and ys remain in statistical control SPC-Statistical Process ControlMonitoring and Complete project documentation Complete project sign-off Handoff documentation to process owner Celebrate!Close the ProjectControlControlControlwww.ketch.caRoles and ResponsibilitiesChampionsChampionsGreen BeltsGreen Belts Black BeltsBlack BeltsMaster Black Master Black BeltsBeltsQuality LeaderQuality Leader& BQC& BQCwww.ketch.caChampions & Master Black BeltsUnderstand the big business pictureDevelop and deliver training to various levels of the organizationAssist in the identification of projectsCoach and support Black Belts in project workParticipate in project reviews to offer technical expertiseTake on leadership of major programsFacilitate sharing of best practices across the corporationCreate the vision of Six SigmaDefine the path to implement Six Sigma across the organizationCarefully select high-impact projectsDevelop a comprehensive training plan for implementing the Six Sigma strategyAsk Black Belts and Green Belts many questions to ensure that they are properly focusedMake sure that project opportunities are acted upon by organizations leadership and the finance departmentRecognize people for their effortsMaster Black BeltsChampionswww.ketch.caBlack Belts & Green BeltsFunction as Green Belts on a part-time basisParticipate on Black Belt projects as content expertsLead Green Belt projectsIdentify potential Six Sigma projectsAct as Six Sigma expertsLead and direct teams in project executionCoach and Mentor Green BeltsEnsure that the results are sustainedIdentify potential barriers to project completionReport progress of both BB and GB projects to appropriate leadershipGreen BeltsBlack Beltswww.ketch.caReturn on Investment In 2000 GEs gross annual benefit was $6.6 billion. CEO Larry Bossidy brought AlliedSignal back from the verge of bankruptcy. Cumulative benefits $2 billion in direct savings Raytheon improved its cost of doing business by more than $1 billion annually in 2001. Average financial benefit per project $120,000 Motorola claims a Six Sigma ROI of between 10:1 & 50:1www.ketch.caPerformance Improvements Increased profits Decreased operating costs Improved customer satisfaction Decreased cycle-time in processes Increased employee moralewww.ketch.caHow To Implement Six Sigma Factors for success Leadership Communication Rewards & recognition Training Launching the initiative Implementation Sustaining the effort and returnwww.ketch.caLeadership Buy-in Clear, unwavering direction on deploying Six Sigma Development of a strategy for deployment Personal involvement Willingness to revise company policies and procedures to be supportive Insistence on tangible resultswww.ketch.caCommunication Clear and precise communication when launching the initiative Frequent updates on initiative status Consistent communication planwww.ketch.caRewards and Recognition Rewarding Green Belts for project completion Recognizing team members for working on projects Recognizing major milestones in project progresswww.ketch.caTrainingAwareness Awareness ChampionChampionGreen BeltGreen BeltBlack BeltBlack Beltwww.ketch.caLaunching the Initiative1. Set vision and goals for Six Sigma initiative2. Develop deployment plan3. Develop clear implementation plan4. Develop Six Sigma budget5. Train Champions and BQC members6. Select Green Belts for first round of training7. Select Six Sigma Leaderwww.ketch.caImplementation1. Select first round of projects2. Develop reward and recognition strategy3. Train Green Belts4. Develop project review system5. Identify potential Black Belts within the organizationwww.ketch.caContinue Momentum Well defined training strategy Monitoring system to ensure gains are sustained Management review of Initiative Continue to have projects ready to start Recruit and train Black Beltswww.ketch.caSustaining the Return Continue to budget for Six Sigma Constant communication strategy Continuous training and improvementwww.ketch.caInformation SourcesSix Sigma Softwarewww.ketch.caObjectivesAgendaIntroductionWhat Six Sigma MeansWhat Six Sigma MeansWhat Six Sigma isThe Concept of VariationThe Concept of VariationMeasuring VariationPerformance and defectsPerformance and YieldPerformance in ContextMethodologiesThe Improvement MethodologyDefineIdentify Customer WantsProject CharterHigh-level Process MapMeasureIdentify CTQ CharacteristicIdentify CTQ CharacteristicIdentify CTQ CharacteristicIdentify CTQ CharacteristicIdentify CTQ CharacteristicCollect DataCalculating SigmaAnalyzeIdentify Possible CausesNarrow To Root CausesConfirm The BenefitImproveGenerate & Select SolutionImplement SolutionConfirm ResultsControlStandardize and DocumentMonitoring and ControlClose the ProjectRoles and ResponsibilitiesChampions & Master Black BeltsBlack Belts & Green BeltsReturn on InvestmentPerformance ImprovementsHow To Implement Six SigmaLeadership Buy-inCommunicationRewards and RecognitionTrainingLaunching the InitiativeImplementationContinue MomentumSustaining the ReturnInformation Sources


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