sixsigma overview

Information Classification: Internal © Copyright 2013. Allwyn George, All rights reserved.

Six Sigma Training and Implementation Proposal


Purpose

• Deployment of Six Sigma as a strategy to achieve World Class Performance at (XYZ).

Scope• Example:

• Emerging Leader- AM to DGM• Leaders- Sr. DGM and Above


Success Factor


Where to apply Six Sigma

Lean Six Sigma

Steel

Power

IT & ITES

Hotel & Tourism

Business Development Quality

Finance

HR

Admin

Retail


Step 1: GAP Analysis

• It’s performed to understand the performance of a process when compared to what is expected or standard

• It‘s used to compare the output of a process versus the competition

• It’s based on statistical process control & robust methods to measure and collect data


Step 2: Staff sensitization

• 1 to 1 hand holding (Mentoring/ Coaching)

• 2 days workshop for Leaders• At max 10 participants per Workshop/ Location

• 4 day workshop for Emerging Leaders• At max 15 participants per Workshop/ Location


Step 3: Project identification/Selection

• Prioritize Project based on Benefit Analysis, and ROI

• Analysis & evaluation of opportunities by the Senior management for decisions, projects to be selected for implementations


Step 4: Implementation

• Stage 1- One to One handholding (Min 3-4 months; 3 resource required)• Pilot Site

• Stage 2- One to One handholding (Min 2 month; 3 resource required)• ??? Sites (Location) identified

• Stage 3- One to One handholding (Min 2 month; 3 resource required)• ??? Remaining Sites


Six Sigma Staff Sensitization - Approach

9


Staff Sensitization & 1 on 1 Support

Initiative(s) Roadmap – 1 Year

Six Sigma Improvement Initiative

MS1 Opening Meeting

MS3 Stage 1 Review

MS2Gap Analysis & Project

Identification

Jul’13 Aug’13 Sep’13 Oct’13 Nov’13 Dec’13 Jan’14 Feb’14 Mar’14 Apr’14 May’14 Jun’14 Jul’14

MS5 Stage 3 Review

MS4 Stage 2 Review

MS1 MS2 MS5MS3 MS4

Level 1: Initial (Heroic Efforts)Level 2: Managed (Basic Project Management)

Level 3: Defined (Process Standardization)Level 4: Quantitatively Managed

Level 5: Optimizing


SIX Sigma Implementation Benefits

• Greater productivity & throughput

• Improved quality & performance

• Reduced cycle times & operating costs

• Smoother operation & executes strategic change

• Generates sustained success & enhances value

• Accelerates improvement & promotes learning across boundaries


Case Study

• Bank of America – Six Sigma Experience

Information Classification: Internal © Copyright 2013. Allwyn George, All rights reserved. 14

Bank of America – Six Sigma Experience

• Goals• # 1 in Customer Satisfaction• Worlds’ most admired company• Worlds’ largest bank

• Strategy - “ Develop business process excellence by applying voice of the customer to identify and engineer critical few business processes using Six Sigma

• Created Quality & Productivity DivisionSource: Best Practices Report



• Wanted results in 1 year;• Developed 2 week Green Belt training programs• Introduced computer simulation of processes• Trained 3767 Green Belts, certified 1230 - Minimum value target

per GB project – $ 250K• Trained 305 Black Belts, certified 61 - Minimum value target per

BB project – $ 1 million• Trained 43 MBB, • 1017 in DFSS • 80 % of Executive Team trained in GB and 50 % Certified



Results of first 2 years:

• Reduced ATM withdrawal losses by 29.7 % • Reduced counterfeit losses in nationwide cash vaults by 54%• Customer delight up 20%;• Added 2.3 million customer households• 1.3 million fewer customer households experienced problems• Stock value up 52%• Y 2002 – BOA named Best Bank in US & Euro money's

Worlds Most Improved Bank


Backup Slides:

Six Sigma Concept, Philosophy & History

17


Organizational Entities and Quality Initiative.


Six Sigma is. . .

19

• 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.

A scientific and practical method to achieve improvements in a company

Scientific:• Structured approach.• Assuming quantitative data.

Practical:• Emphasis on financial result.• Start with the voice of the customer.

“Show me the data”

”Show me the money”


What is Six Sigma?

• Philosophy: The philosophical perspective views all works as a processes that can be defined, measured, analysed, improved & controlled (DMAIC). Processes require inputs & produce outputs. If you control the inputs, you will control the outputs. This is generally expressed as the y= f (x) concept. The philosophy results in a culture of total aversion to defects.

• Set of Tools: Six Sigma as a set of tools includes all the qualitative and quantitative techniques used by the six sigma expert to drive process improvement. A few such tools include statistical process control (SPC), Control charts, failure mode & effects analysis, process mapping etc

• Methodology: This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC. DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions. While DMAIC is not only Six Sigma Methodology in use, it is certainly the most widely adopted and recognized.

• Metrics: In simple terms, Six Sigma quality performance means 3.4 defects per million opportunities.


μ

σ

What’s in a name?

• Sigma is the Greek letter (18th character) representing the standard deviation of a population of data.

• Sigma is a measureof variation

(the data spread)

As defectsgo down...

...the Sigma capabilitygoes upD σ


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 not feel averages!

-10

-5

0

5

10

15

20


Measuring Process Performance - The 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?

• 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

Answer: Look at the variation!


Delivery Cycle Time (Days)Baseline Improved? What we see

1224137

168

20251410113016

Mean 15.8Std Dev 7.0

277

154

186

2362

24265

11.29.0

11.2 15.8

What customers feelUsing mean-based thinking, weimprove average performance by29%, and break out the champagne.But our customer only feels thevariance and cancels the next order.

Customers Feel Variance, Not the Mean

Insight Through Variance


Reduce Variation to Improve Performance

• 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

How many standard deviations can you “fit” within customer expectations?


A Standard Deviation (s) is a measure of the amount of spread or dispersion about the mean (m).

s s s

T

mLSL USL

T = Process Targets = Standard Deviationm = MeanLSL = Lower Spec. LimitUSL = Upper Spec. Limit

This is an illustration of a three sigma process . Alternatively, it can be said that this process has a sigma level of 3. In conventional quality lingo , the CpK of this process is 1.0.

CpK = Sigma Level / 3

A Three Sigma Process

27


s s s

T

mLSL USL

s s s

A Six sigma process has room for six standard deviation between the mean and nearest specification limit or Cpk of 2.

A Six Sigma Process


Managing Up the Sigma Scale

29

Sigma

% Good % Bad DPMO Short Term CPk

Long term CPk

1 30.9% 69.1% 691,462 0.33 -0.17

2 69.1% 30.9% 308,538 0.67 0.17

3 93.3% 6.7% 66,807 1.00 0.5

4 99.38% 0.62% 6,210 1.33 0.83

5 99.977% 0.023% 233 1.67 1.17

6 99.9997% 0.00034% 3.4 2.0 1.5

Process CapabilitiesDefect per

million Opportunity

Rolled Throughput

Yield


Examples of the Sigma Scale

• 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.

• 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.

5,000 incorrect surgical operations per week

No electricity for almost seven hours each month.

4 Sigma = 99 % Good 6 Sigma = 99.9997 % Good 1.7 incorrect surgical operations

per weekOne hour without electricity every

34 years.

3 Sigma = 93.3 % Good 6 Sigma = 99.9997 % Good


1,000,000

100,000 Restaurant BillsOrder Taking

Airline BaggageHandling

Payroll Processing

10,000 AverageCompany

Purchased MaterialReject Rate

1,000

100

10

World Class

12 3 4 5 6 7

Domestic Airline FlightFatality Rate – 0.43 PPM

Benchmarking Chart

31


s-level Defect rate (ppm)

Costs of poor quality Status of the company

6 3.4 < 10% of turnover World class 5 233 10-15% of turnover 4 6210 15-20% of turnover Current standard 3 66807 20-30% of turnover 2 308537 30-40% of turnover Bankruptcy

Benefits of 6s approach w.r.t. financials


Know what is Important to the Customer and to the Business

Reduce Defect Levels by:

1. Reducing the Variation

2. Centering around the Target

Long Term

LSL USL

Six Sigma Improvement Strategy

33


Process Off TargetTarget

Excessive VariationTarget

LSL USL LSL USL

CenterProcess

Target

ReduceSpread

Defects LSL USL

Ideal State: Centred on the Customer’s Target with Minimal Variation

The Statistical Objective of Six Sigma

34


Target AnalogyMeasurement

Precise,Not Accurate

StatisticalLSL T USL

AccurateNot Precise

Precise andAccurate

LSL T USL

Ideal State: Centred on the Customer’s Target with Minimal Variation

The Statistical Objective of Six Sigma

35


Defect Reduction

Yield Improvement

Customer Satisfaction

$

Six Sigma (s) is a business-driven, multi-faceted approach to process improvement, reduced costs, and increased profits. With a fundamental principle to improve customer satisfaction by reducing defects.

The Goal of Six Sigma

36



Organization Goal

Quality

Defects

Delivery

Cycle Time

Price/Value

Cost

Whatever is critical to the customer must be critical to our business.

Six Sigma project are then focused on the process required to satisfy the critical to customer & process.


37


The Six Sigma Evolutionary Timeline

38

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.


Thank you

sixsigma overview

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