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INTRODUCTION TO SIX SIGMA
HAWTHORN 6SIGMA QUALITY SOLUTIONS
WWW.HSQS.WWW.HSQS.ININ
TOPICS (SESSION 1)
Understanding Six Sigma
History of Six Sigma
Six Sigma Methodologies & Tools
Roles & Responsibilities
How Six Sigma can be Beneficial for You
What is Six Sigma ?
The term " Sigma " is used to designate the distribution or spread about the mean (average) of any process or procedure.
For a business or manufacturing process, the sigma value is a metric that indicates how well that process is performing.
The higher the sigma value, the better. Sigma measures the capability of the process to perform defect-free-work.
A defect is anything that results in customer dissatisfaction.
With Sig Sigma, the common measurement index is "defects-per-unit," where a unit can be virtually anything--- a component, piece of material, line of code, administrative form, time frame, distance, etc.
The Sigma value indicates how often defects are likely to occur. The higher the sigma value, the less likely a process will produce defects. As sigma increases, costs go down, cycle time goes down, and customer satisfaction goes up.
What is Six Sigma … ?
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.
Features that set Six Sigma apart from previous quality improvement initiatives include:
• A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.• An increased emphasis on strong and passionate management leadership and support.• A special infrastructure of "Champions," "Master Black Belts," "Black Belts," "Green Belts", etc. to lead and implement the Six Sigma approach.• A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork.
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.
TOPICS
Understanding Six Sigma
History of Six Sigma
Six Sigma Methodologies & Tools
Roles & Responsibilities
How Six Sigma can be Beneficial for You.
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
TOPICS
Understanding Six Sigma
History of Six Sigma
Six Sigma Methodologies & Tools
Roles & Responsibilities
How Six Sigma can be Beneficial for You
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 problem Who are the stake holders / decision makers Align resources and expectations
Six SigmaSix Sigma
Project Project CharterCharter
Voice of the
Stakeholder
S takeho lders
$
Cost of Poor
Quality
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
Uses Design new processes, products, and/or services from
scratch Replace old processes where improvement will not suffice
Differences between DFSS and DMAIC Projects typically longer than 4-6 months Extensive definition of Customer Requirements (CTQs) Heavy emphasis on benchmarking and simulation; less
emphasis on base lining Key Tools
Multi-Generational Planning (MGP) Quality Function Deployment (QFD)
Define Measure Analyze Develop Verify
TOPICS
Understanding Six Sigma
History of Six Sigma
Six Sigma Methodologies & Tools
Roles & Responsibilities
How Six Sigma can be Beneficial for You
CHAMPIONS
Promote 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 BELTS
Use 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 BELTS Use 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 Experts Provide specific process knowledge to Six
Sigma teams Ad hoc members of Six Sigma project teams
Financial Controllers Ensure validity and reliability of financial
figures used by Six Sigma project teams Assist in development of financial components
of initial business case and final cost-benefit analysis
TOPICS
Understanding Six Sigma
History of Six Sigma
Six Sigma Methodologies & Tools
Roles & Responsibilities
How Six Sigma can be How Six Sigma can be Beneficial for You?Beneficial for You?
Focus on customers. Improved customer loyalty. Reduced cycle time. Less waste. Data based decisions. Time management Sustained gains and improvements. Systematic problem solving. Employee motivation Data analysis before decision making. Faster to market. Team building. Improved customer relations. Assure strategy planning.
Effective Supply chain management Knowledge of Competition & Competitors. Develop Leadership skill. Breakdown barriers between departments and
functions. Management training. Improve presentation skills. Integration of products ,services and
distribution. Use of standard operating procedures. Better decision making. Improving Projects Planning kills.