Introduction to SIX SIGMA Presented by http www

Introduction to SIX - SIGMA Presented by : http: //www. Quality. Gurus. com

Agenda 0750 - 0800 - 0930 - 0945 - 1200 Participants introduction Introduction to Six Sigma concept Key Concepts Tea / Coffee Break 1200 - 0100 Forms of waste What is Sigma Components of Six Sigma Lunch Break 0100 - 0200 Selecting a Project 0200 - 0300 Open session / Q&A Quality. Gurus. com

Participants Introduction Your Name Department Your job profile Your exposure to Quality Management/ Six Sigma Quality. Gurus. com

Ground Rules Program success depends on your participation. Actively participate. Please avoid cross-talks. Observe specified timings. Please keep your mobile phones switched off. Feel free to ask question at any point of time. - Restrict question to specific issue being discussed, while general questions can be discussed during Q & A session. Enjoy the program ! Quality. Gurus. com

Introduction to Six Sigma Purpose of six sigma : To make customer happier and increase profits Quality. Gurus. com

Origin of Six Sigma 1987 Motorola Develops Six Sigma Raised Quality Standards Other Companies Adopt Six Sigma GE Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training. Dow Chemical, Du. Pont, Honeywell, Whirlpool Quality. Gurus. com

Time Line Allied Signal Motorola 1985 1987 General Electric 1992 1995 Johnson & Johnson, Ford, Nissan, Honeywell 2002 Dr Mikel J Harry wrote a Paper relating early failures to quality Quality. Gurus. com

Pilot’s Six-Sigma Performance Width of landing 1/2 Width strip of landing strip If pilot always lands within 1/2 the landing strip width, we say that he has Six -sigma capability. Quality. Gurus. com

Current Leadership Challenges Delighting Customers. Reducing Cycle Times. Keeping up with Technology Advances. Retaining People. Reducing Costs. Responding More Quickly. Structuring for Flexibility. Growing Overseas Markets. Quality. Gurus. com

Six Sigma— Benefits? Generated sustained success Project selection tied to organizational strategy Customer focused Profits Project outcomes / benefits tied to financial reporting system. Full-time Black Belts in a rigorous, project-oriented method. Recognition and reward system established to provide motivation. Quality. Gurus. com

Management involvement? Executives and upper management drive the effort through: Understanding Six Sigma Significant financial commitments Actively selecting projects tied to strategy Setting up formal review process Selecting Champions Determining strategic measures Quality. Gurus. com

Management Involvement? Key issues for Leadership: How will leadership organize to support Six Sigma ? (6 council, Director 6 , etc) Transition rate to achieve 6 . Level of resource commitment. Centralized or decentralized approach. Integration with current initiatives e. g. QMS How will the progress be monitored? Quality. Gurus. com

What can it do? Motorola: 5 -Fold growth in Sales Profits climbing by 20% pa Cumulative savings of $14 billion over 11 years General Electric: $2 billion savings in just 3 years The no. 1 company in the USA Bechtel Corporation: $200 million savings with investment of $30 million Quality. Gurus. com

GE Six Sigma Economics (in millions) 6 Sigma Project Progress 2500 2000 1500 Cost 1000 Benefit 500 0 1996 1998 2000 2002 Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma. Quality. Gurus. com

Overview of Six Sigma 6 SIGMA AS A PHILOSOPHY CHANGE THE WORLD TRANSFORM THE ORGANIZATION 6 SIGMA AS A PROCESS 6 SIGMA AS A STATISTICAL TOOL GROWTH COSTS OUT PAIN, URGENCY, SURVIVAL Quality. Gurus. com

Overview of Six Sigma It is a Process To achieve this level of performance you need to: Define, Measure, Analyse, Improve and Control It is a Philosophy Anything less than ideal is an opportunity for improvement Defects costs money Understanding processes and improving them is the It is Statistics most efficient way to 6 Sigma processes will achieve lasting results produce less than 3. 4 defects per million opportunities Quality. Gurus. com

Philosophy Know What’s Important to the Customer (CTQ) Reduce Defects (DPMO) Center Around Target (Mean) Reduce Variation (Standard Deviation) Quality. Gurus. com

Critical Elements Genuine Focus on the Customer Data and Fact Driven Management Process Focus Proactive management Boundary-less Collaboration Drive for Perfection; Tolerance for failure Quality. Gurus. com

Data Driven Decision Y= • • • Y Dependent Output Effect Symptom Monitor f(X) • • • X 1. . . Xn Independent Input-Process Cause Problem Control The focus of Six sigma is to identify and control Xs Quality. Gurus. com

Two Processes DMAIC DMADV • Existing Processes • • • Define Measure Analyze Improve Control • New Processes • DFSS • • • Define Measure Analyze Design Verify Quality. Gurus. com

Key Concepts Quality. Gurus. com

COPQ (Cost of Poor Quality) - Inspection - Warranty - Scrap - Rework - Rejects - More Setups - Expediting Costs - Lost Sales - Late Delivery - Lost Customer Loyalty - Excess Inventory - Long Cycle Times - Costly Engineering Changes Traditional Quality Costs: - Tangible - Easy to Measure Lost Opportunities Hidden Costs: - Intangible - Difficult to Measure The Hidden Factory Average COPQ approximately 15% of Sales Quality. Gurus. com

Cost of Quality % Sales COPQ v/s Sigma Level Quality. Gurus. com

CTQ (Critical-To. Quality) CTQ characteristics for the process, service or process Measure of “What is important to Customer” 6 Sigma projects are designed to improve CTQ Examples: Waiting time in clinic Spelling mistakes in letter % of valves leaking in operation Quality. Gurus. com

Defective and Defect A nonconforming unit is a defective unit Defect is nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction. A defect does not necessarily make the unit defective Examples: Scratch on water bottle (However if customer wants a scratch free bottle, then this will be defective bottle) Quality. Gurus. com

Defect Opportunity Circumstances in which CTQ can fail to meet. Number of defect opportunities relate to complexity of unit. Complex units – Greater opportunities of defect than simple units Examples: A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15 Quality. Gurus. com

DPO (Defect Per Opportunity) Number of defects divided by number of defect opportunities Examples: In previous case (15 defect opportunities), if 10 units have 2 defects. Defects per unit = 2 / 10 = 0. 2 DPO = 2 / (15 x 10) = 0. 0133333 Quality. Gurus. com

DPMO (Defect Per Million Opportunities) DPO multiplies by one million Examples: In previous case (15 defect opportunities), if 10 units have 2 defects. Defects per unit = 2 / 10 = 0. 2 DPO = 2 / (15 x 10) = 0. 0133333 DPMO = 0. 013333333 x 1, 000 = 13, 333 Six Sigma performance is 3. 4 DPMO 13, 333 DPMO is 3. 7 Sigma Quality. Gurus. com

Yield Proportion of units within specification divided by the total number of units. Examples: If 10 units have 2 defectives Yield = (10 – 2) x 100 /10 = 80 % Rolled Through Yield (RTY) Y 1 x Y 2 x Y 3 x ……. x Yn E. g 0. 90 x 0. 99 x 0. 76 x 0. 80 = 0. 54 Quality. Gurus. com

Forms of Waste Quality. Gurus. com

What are the forms of waste? 1. 2. 3. 4. 5. 6. 7. Waste of Correction Waste of Overproduction Waste of processing Waste of conveyance (or transport) Waste of inventory Waste of motion Waste of waiting Quality. Gurus. com

1. Waste of correction Repairing a defect wastes time and resources (Hidden factory) Hidden Factory Rework Failure Investigation Operation 1 Test Failure Investigation Operation 2 Test Product Quality. Gurus. com

2. Waste of Overproduction Producing more than necessary or producing at faster rate than required Excess labor, space, money, handling Quality. Gurus. com

3. Waste of processing Processing that does not provide value to the product Excess level of approvals Tying memos that could be handwritten Cosmetic painting on internals of equipment Paint thickness more than specific values Quality. Gurus. com

4. Waste of conveyance Unnecessary movement of material from one place to other to be minimized because It adds to process time Goods might get damaged Convey material and information ONLY when and where it is needed. Quality. Gurus. com

5. Waste of inventory Any excess inventory is drain on an organization. Impact on cash flow Increased overheads Covers Quality and process issues Examples Spares, brochures, stationary, … Quality. Gurus. com

6. Waste of Motion Any movement of people, equipment, information that does not contribute value to product or service Quality. Gurus. com

7. Waste of Waiting Idle time between operations Period of inactivity in a downstream process because an upstream activity does not deliver on time. Downstream resources are then often used in activities that do not add value, or worst result in overproduction. Quality. Gurus. com

Some more sources of Waste of untapped human potential. Waste of inappropriate systems Wasted energy and water Wasted materials Waste of customer time Waste of defecting customers Quality. Gurus. com

What is Sigma? Quality. Gurus. com

Have you ever… Shot a rifle? Played darts? What is the point of these sports? What makes them hard? Quality. Gurus. com

Have you ever… Shot a rifle? Played darts? Jack Jill Who is the better shooter? Quality. Gurus. com

Variability Deviation = distance between observations and the mean (or average) Observations averages Deviations 10 10 - 8. 4 = 1. 6 9 9 - 8. 4 = 0. 6 8 8 - 8. 4 = -0. 4 7 7 - 8. 4 = -1. 4 8. 4 0. 0 8 7 10 8 9 Jack Jill Quality. Gurus. com

Variability Deviation = distance between observations and the mean (or average) Observations averages Deviations 7 7 - 6. 6 = 0. 4 6 6 - 6. 6 = -0. 6 6. 6 0. 0 Jack 7 6 7 7 6 Jill Quality. Gurus. com

Variability Variance = average distance between observations and the mean squared Deviations Squared Deviations 10 10 - 8. 4 = 1. 6 2. 56 Observations 9 – 8. 4 = 0. 6 0. 36 8 8 – 8. 4 = -0. 4 0. 16 7 7 – 8. 4 = -1. 4 1. 96 9 averages 8. 4 0. 0 8 7 10 8 9 Jack 1. 0 Jill Variance Quality. Gurus. com

Variability Variance = average distance between observations and the mean squared Observations averages Deviations Squared Deviations 7 7 - 6. 6 = 0. 4 0. 16 6 6 – 6. 6 = -0. 6 0. 36 6. 6 0. 0 0. 24 Jack 7 6 7 7 6 Jill Variance Quality. Gurus. com

Variability Standard deviation = square root of variance Jack Average Jack Jill 8. 4 6. 6 Variance 1. 0 0. 24 Standard Deviation 1. 0 0. 4898979 Jill But what good is a standard deviation Quality. Gurus. com

Variability The world tends to be bell-shaped Even very rare outcomes are possible Fewer in the “tails” (lower) Most outcomes occur in the middle Fewer Even very rare in the outcomes are “tails” possible (upper) Quality. Gurus. com

Variability Here is why: Even outcomes that are equally likely (like dice), when you add them up, become bell shaped Quality. Gurus. com

“Normal” bell shaped curve Normal distributions are divide up into 3 standard deviations on each side of the mean Once your that, you know a lot about what is going on And that is what a standard deviation is good for Quality. Gurus. com

Causes of Variability Common Causes: Random variation within predictable range (usual) No pattern Inherent in process Adjusting the process increases its variation Special Causes Non-random variation (unusual) May exhibit a pattern Assignable, explainable, controllable Adjusting the process decreases its variation Quality. Gurus. com

Limits Process and Control limits: Statistical Process limits are used for individual items Control limits are used with averages Limits = μ ± 3σ Define usual (common causes) & unusual (special causes) Specification limits: Engineered Limits = target ± tolerance Define acceptable & unacceptable Quality. Gurus. com

Usual v/s Unusual, Acceptable v/s Defective Another View Off-Target LSL Large Variation LSL USL On-Target Center Process Reduce Spread LSL USL LSL = Lower spec limit USL = Upper spec limit The statistical view of a problem Quality. Gurus. com

More about limits Poor quality: defects are common (Cpk<1) Good quality: defects are rare (Cpk>1) μ target Cpk measures “Process Capability” If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional. Quality. Gurus. com

Process capability Good quality: defects are rare (Cpk>1) Poor quality: defects are common (Cpk<1) Cpk = min = USL – x = 24 – 20 =. 667 3σ 3(2) = x - LSL = 20 – 15 =. 833 3σ 3(2) = = 3σ = (UPL – x, or x – LPL) 14 15 20 24 26 Quality. Gurus. com

A Six Sigma Process – Predictably twice as good as what the customer wants LSL -6 6 1 1 2 3 4 1 5 1 6 USL +6 1 7 1 1 8 9 10 11 12 Quality. Gurus. com

3 v/s 6 6 Sigma curve LSL USL 3 Sigma curve 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Quality. Gurus. com

Process shift allowed 1. 5 SD LSL USL SD = 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Quality. Gurus. com

Six Sigma Measurement Sigma 7 6 5 4 0. 02 3 3. 4 On one condition : Calculate the defects and estimate the opportunities in the same way. . . DPMO 233 6210 66810 Quality. Gurus. com

Six Sigma Measurement Sigma numbers 1. 5 s 2. 0 s 2. 5 s 3. 0 s 3. 5 s 4. 0 s 4. 5 s 5. 0 s 5. 5 s 6. 0 s Defects per million 500, 000 308, 300 158, 650 67, 000 22, 700 6, 220 1, 350 233 32 3. 4 Quality. Gurus. com

Components of Six Sigma Quality. Gurus. com

Components Two components of Six Sigma 1. Process Power 2. People Power Quality. Gurus. com

Process Power Quality. Gurus. com

P-D-C-A Act A P C D Act on what was learned Check the results Plan the change Do Implement the change on a small scale. Quality. Gurus. com

Approach Practical Problem Statistical Solution Practical Solution Quality. Gurus. com

DMAIC - simplified Define What is important? Measure How are we doing? Analyze What is wrong? Improve Fix what’s wrong Control Ensure gains are maintained to guarantee performance Quality. Gurus. com

DMAIC approach D Define M Measure A Analyze Identify and state the practical problem Validate the practical problem by collecting data Convert the practical problem to a statistical one, define statistical goal and identify potential statistical solution I Improve Confirm and test the statistical solution C Control Convert the statistical solution to a practical solution Quality. Gurus. com

Define D Define Vo. C - Who wants the project and why ? M Measure The scope of project / improvement (SMART Objective) A Analyze Key team members / resources for the project I Improve Critical milestones and stakeholder review C Control Budget allocation Quality. Gurus. com

Measure D Define Ensure measurement system reliability - Is tool used to measure the output variable flawed ? M Measure A Analyze I Improve C Control Prepare data collection plan - How many data points do you need to collect ? How many days do you need to collect data for ? What is the sampling strategy ? Who will collect data and how will data get stored ? What could the potential drivers of variation be ? Collect data Quality. Gurus. com

Analyze D Define M Measure A Analyze I Improve C Control How well or poorly processes are working compared with - Best possible (Benchmarking) - Competitor’s Shows you maximum possible result Don’t focus on symptoms, find the root cause Quality. Gurus. com

Improve D Define M Measure Present recommendations to process owner. Pilot run - Formulate Pilot run. - Test improved process (run pilot). A Analyze - Analyze pilot and results. I Improve - Prepare final presentation. Develop implementation plan. - Present final recommendation to Management Team. C Control Quality. Gurus. com

Control D Define Don’t be too hasty to declare victory. M Measure A Analyze I Improve C Control How will you maintain to gains made? - Change policy & procedures - Change drawings - Change planning - Revise budget - Training Quality. Gurus. com

Omitting a step in DMAIC? Step Consequences if the step is omitted 1. Define 2. Measure 3. Analyze 4. Improve 5. Control Quality. Gurus. com

Tools for DMAIC Define Measure Analyze Improve Control What is wrong? Data & Process capability When and where are the defects How to get to six sigma Display key measures § Benchmark § Baseline § Contract / Charter § Kano Model § Voice of the Customer § Quality Function Deployment § Process Flow Map § Project Management § “Management by Fact” – 4 What’s § 7 Basic Tools § Defect Metrics § Data Collection, Forms, Plan, Logistics § Sampling Techniques § Cause & Effect Diagrams § Failure Models & § Effect Analysis § Decision & Risk Analysis § Statistical Inference § Control Charts § Capability § Reliability Analysis § Root Cause Analysis § 5 Why’s § Systems Thinking § Design of Experiments § Modelling § Tolerancing § Robust Design § Process Map Statistical Controls § Control Charts § Time Series Methods Non Statistical Controls § Procedure adherence § Performance Mgmt § Preventive activities § Poke yoke Quality. Gurus. com

Components Two components of Six Sigma 1. Process Power 2. People Power Tell me, I forget. Show me , I remember. Involve me, I understand. Quality. Gurus. com

6 Training Champions Master Black Belts Mentor, trainer, and coach of Black Belts and others in the organization. Leader of teams implementing the six sigma methodology on projects. Delivers successful focused projects using the six sigma methodology and tools. Green Belts Team Members / Yellow Belts Participates on and supports the project teams, typically in the context of his or her existing responsibilities. Quality. Gurus. com

Six Sigma Organization Master Black Belt Champion Black Belt Green Belt Black Belt Green Belt Yellow Belt Quality. Gurus. com

6 Training Position in Six Sigma Organisation Expected Role Post Training Typical Training Executive overview 2/3 Days Senior Executives Champions Training - I 2 days Champions / Process owners + Provide Leadership Champions Training –II 3 days Process Mgmt. & Project champion (Total 5 days) Black-Belt Week 1 Week 2 Week 3 Week 4 Black-Belt Training / Facilitation skills Project-work Master Black-Belt -As Trainer -Coach teams -Facilitate improvement projects - Part Green Belt 1 Week Green-Belt Training Employees (Yellow-Belt) 1 / 2 Days core training on Six-Sigma Project work of project teams - Sometime lead the teams - General process control & improvement - Project Team Member Quality. Gurus. com

Champion Plans improvement projects Charters or champions chartering process Identifies, sponsors and directs Six Sigma projects Holds regular project reviews in accordance with project charters Includes Six Sigma requirements in expense and capital budgets Quality. Gurus. com

Champion Identifies and removes organizational and cultural barriers to Six Sigma success. Rewards and recognizes team and individual accomplishments (formally and informally) Communicates leadership vision Monitors and reports Six Sigma progress Validates Six Sigma project results Nominates highly qualified Black Belt and/or Green Belt candidates Quality. Gurus. com

Master Black Belt Roles Responsibilities - Enterprise Six Sigma expert - Permanent full-time change agent - Certified Black Belt with additional specialized skills or experience especially useful in deployment of Six Sigma across the enterprise - Highly proficient in using Six Sigma methodology to achieve tangible business results. - Technical expert beyond Black Belt level on one or more aspects of process improvement (e. g. , advanced statistical analysis, project management, communications, program administration, teaching, project coaching) - Identifies high-leverage opportunities for applying the Six Sigma approach across the enterprise - Basic Black Belt training - Green Belt training - Coach / Mentor Black Belts Quality. Gurus. com

Black Belt Roles Responsibilities - Six Sigma technical expert - Temporary, full-time change agent (will return to other duties after completing a two to three year tour of duty as a Black Belt) - Leads business process improvement projects where Six Sigma approach is indicated. - Successfully completes high-impact projects that result in tangible benefits to the enterprise - Demonstrated mastery of Black Belt body of knowledge - Demonstrated proficiency at achieving results through the application of the Six Sigma approach - Coach / Mentor Green Belts - Recommends Green Belts for Certification Quality. Gurus. com

Green Belt Roles Responsibilities - Six Sigma Project originator - Part-time Six Sigma change agent. Continues to perform normal duties while participating on Six Sigma project teams - Six Sigma champion in local area - Recommends Six Sigma projects - Participates on Six Sigma project teams - Leads Six Sigma teams in local improvement projects Quality. Gurus. com

Yellow Belt Roles Responsibilities - Learns and applies Six Sigma tools to projects - Actively participates in team tasks - Communicates well with other team members - Demonstrates basic improvement tool knowledge - Accepts and executes assignments as determined by team Quality. Gurus. com

Financial Analyst Validates the baseline status for each project. Validates the sustained results / savings after completion of the project. Compiles overall investment vs. benefits on Six Sigma for management reporting. Will usually be the part of Senior Leadership Team. Quality. Gurus. com

Thought of the day We don't know what we don't know We can't act on what we don't know We won't know until we search We won't search for what we don't question We don't question what we don't measure Hence, We just don't know Quality. Gurus. com

Project Selection The first step to implement Six Sigma Quality. Gurus. com

Sources of Projects External Sources: Voice of Customer What are we falling short of meeting customer needs? What are the new needs of customers? Voice of Market What are market trends, and are we ready to adapt? Voice of Competitors What are we behind our competitors? Quality. Gurus. com

Sources of Projects Internal Sources: Voice of Process Where are the defects, repairs, reworks? What are the major delays? What are the major wastes? Voice of Employee What concerns or ideas have employees or managers raised? What are we behind our competitors? Quality. Gurus. com

Project Selection As a team List down at least 20 improvement projects related to your work areas ……. A Problem Statement should be SMART: n n n Specific - It does not solve world hunger Measurable - It has a way to measure success Achievable - It is possible to be successful Relevant - It has an impact that can be quantified Timely - It is near term not off in the future Quality. Gurus. com

Harvesting the Fruit of Six Sigma Sweet Fruit Design for Repeatability Process Enhancement Bulk of Fruit Process Characterization and Optimization ------------------Low Hanging Fruit Seven Basic Tools ------------------Ground Fruit Logic and Intuition Quality. Gurus. com

Types of Savings Hard Savings: Cost Reduction Energy Saving Raw Material saving Reduced Rejection, Waste, Repair Revenue Enhancement Increased production Yield Improvement Quality. Gurus. com

Types of Savings Hard Savings: Cash flow improvement Reduced cash tied up in inventory Reduced late receivables, early payables Reduced cycle time Cost and Capital avoidance Optimizing the current system / resources Reduced maintenance costs Quality. Gurus. com

Types of Savings Soft Savings: Customer Satisfaction / Loyalty Employee Satisfaction Quality. Gurus. com

Cost of implementing Direct Payroll Full time (Black Belts, Master Black Belts) Indirect Payroll Time by executives, team members, data collection Training and Consulting Black Belt course, Overview for Mgmt etc. Improvement Implementation Costs Installing new solution, IT driven solutions etc. Quality. Gurus. com

What Qualifies as a Six Sigma Project Three basic qualifications: -There is a gap between current and desired / needed performance. The cause of problem is not clearly understood. The solution is not pre-determined, nor is the optimal solution apparent. How many projects out of 20 now qualify as Six sigma projects? Quality. Gurus. com

Way forward Get Started Look for low hanging fruits Even poor usage of these tools will get results Learn more about Six Sigma Quality. Gurus. com