Who is Using Six Sigma in the Twin Cities

1
Who is Using Six Sigma in the Twin Cities

• Seagate, Medtronic, Donalson, Honeywell, American
  Express, Ceridian, 3M

2
What is Six Sigma?

• Six Sigma - The Initiative
• Process
• Systematic approach to reducing defects which
  affect what is important to the customer
• Tools
• Qualitative, statistical and instructional
  Devices for observing process variables and
  their relationships as well as managing their
  character

3
Six Sigma - Aggressive Goal
?
PPM
Process Capability
Defects per Million Opp.
Sigma is a statistical unit of measure that
reflects process capability. The sigma scale of
measure is perfectly correlated to such
characteristics as defects-per-unit,
parts-per-million defective, and the probability
of a failure/error.
4
Six Sigma -- Practical Meaning
5
How Does Six Sigma Make the Difference?

• Vision
• Philosophy
• Aggressive goal
• Breakthrough improvement
• Focus
• Customer focus
• Problem focus
• Process focus
• Metric (standard of measurement)
• Method

6
The Goals of Six Sigma

• Defect Reduction
• Yield Improvement
• Improved Customer Satisfaction
• Higher Net Income

7
Whats the Strategy

• Know whats important to the
• Customer
• Reduce defects
• Center around target
• Reduce Variation

8
Six Sigma Vision

• The Vision of Six Sigma is to delight customers
  by delivering world-class quality products
  through the achievement of Six Sigma levels of
  performance in everything we do.

9
Six Sigma Philosophy

• The Philosophy of Six Sigma is to apply a
  structured, systematic approach to achieve
  breakthrough improvement across all areas of our
  business.

10
Where Does Industry Stand?

IRS - Tax Advice
(phone-in)
(140,000 PPM)
Restaurant Bills
Doctor Prescription Writing
Payroll Processing

Order
Write-up
Journal Vouchers
Wire Transfers
Airline Baggage Handling
Purchased Material
Lot Reject Rate
Best-in-Class
Average
Domestic Airline Flight
Company
Fatality Rate
(0.43 PPM)
7
Sigma Scale of Measure
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Six Sigma - Performance Target
Sigma
Long-Term Yield
Standard
3 Sigma
93.32
Historical
4 Sigma
99.379
Current
5 Sigma
99.9767
Intermediate
6 Sigma
99.99966
Long-Run
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Six Sigma - Why?

• To deal with a world of declining product prices
• To compete successfully with the best companies
  in the world
• To establish standard language and approaches
  across functions and across businesses
• To develop our next generation of leaders

To accelerate our rate of quality and
productivity improvement faster than our
competitors
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Six Sigma Basics ...What If...?

• You Could Select One of Your Most Highly
  Leveraged Problems . . . ?
• Identify One of Your Best People to Work on It .
  . . ?
• Provide That Person With All of the Training,
  Tools, and Resources They Need to Fix It . . . ?
• Guarantee Them Uninterrupted Time and Focus to
  Work on It . . . ?
• And Get a Well Thought Out, Data Driven Solution
  . . . ?

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The People Who Make it Happen
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Six Sigma - Approaches to Improvement
Six Sigma
Continuous Improvement
Breakthrough Strategy
-Trained Dedicated Individuals -Analytical
Expertise -gt70 Improvement per Project
Time in Years
1
2
3
4
5
The problem with continuous improvement as the
only goal.
Organization sees improvement BUT loses the game.
Six Sigma Enables Breakthrough Level Improvement!
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The Focus of Six Sigma
KPIV(s)
f (X)
Y
KPOV(s)
Focus on X rather than Y, as done historically
Metrics
KPOV Key Process Output Variable KPIV Key
Process Input Variable
Defect (Gap)
Critical To The Customer

17
Six Sigma as a Problem Solving System

• Six Sigma employs the Breakthrough Strategy,
  which is a multi-step problem solving and
  process improvement methodology.

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Six Sigma Road Map - Define Measure
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Six Sigma Road Map - Measure Analyze
Generates/Determines
Indicators Performance Entitlement DPMO Sigma
Score Cp Pp Cpk Ppk
Gather Historical Data or Sample (Size Subgroup)
Process Capability Study
Measure
Determine Cost of Quality
Review Internal External Costs
Potential Benefits
Analytical Tools
Trends Behaviors in KPIV/KPOV relationships
Minitab
Analyze
Confidence Intervals
Applies throughout
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Six Sigma Road Map - Analyze
Generates/Determines
Answers Difference in Means? One Pop. to
Another Before/After to Spec
Hypothesis for Variables - Means (t-tests)
Variables Data
Answers Difference in Spread? One Pop. to
another to baseline multiple Pops.
Hypotheses for Variables - Std. Dev. (Chi Sq.,
F-Test, Homogeneity of Variance)
Variables Data
Analyze
Answers Differences in Def. Between
pop. Diff. in Def. from overall mean
Hypotheses for Attributes (Contingency Tables,
Non-parametric study)
Proportion Defects Proportion Defectives
Collecting data on several variables at the
same time
Points to variables warranting further analyses
Multi-Vari Studies
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Six Sigma Road Map - Analyze
Generates/Determines
Answers Difference in Means? One Variable
(Factor) Multiple Types
Variables Data
ANOVA
Analyze
Correlation Regression
For pairs of continuous Data Variables
Answers If know X Predict Y Strength Direction
This completes the Characterize phase confirming
which Input Variables most directly affect the
Output Variables Move on to Optimize - Settings
or Procedures
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Six Sigma Road Map - Improve
Generates/Determines
Known Relationships between KPIVs KPOVs
Design of Experiment
Answers How to Set X to get Best Y
Answers Whats the Best Combination of the
Xs for producing the Best Y
Full Factorial Simple 2K
Testing Variables at 2 Levels (High/Low)
Improve
Tests Multiple Variables, at Various Levels
(High/Low)
Answers Whats the Best Combination of ALL
Variables (X) to give the Best Output (Y)
Full Factorial Multiple Variables
Answers Same as Above - But . .. Less
Information More Risk - but, requires less
experimentation
Tests Multiple Variables But Not All Not All
Levels Conserves Resources
Fractional Factorial
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Six Sigma Road Map - Improve
Generates/Determines
Clarifies Results when Interacting
Variables Confound the Results
Isolates Parts of Data from other Parts
DOE- Blocking
Improve
Improves Current EHS Situation and/or
Identifies Issues to be Managed Up-Front
Reviews Affects on the Environment, Health
Safety
EHS Review
Now . . . We have established the parameters
and procedures for operating the improved process
. . . Keep it in Control !
24
Six Sigma Road Map - Control
Generates/Determines
Indicates if Process is Operating as Expected
(In-Control) If Not, What Corrections to Make
SPC
Real-time Process Results Trends Control Limits
Outlines Parameters of Operations,
Responsibilities, Actions, Measurements, etc.
Process Control Plans
CTQs, Specs, Measurements, Actions
Outlines Checking, Maintenance, Care Periodic
Review of Data Collection Devices Methods
Control
Gauge/Measurement Stability Control
Gauges, Forms Data Collection Methods
Outlines How Employees Do Procedures -
Standard Consistent, Opportunity for
Understanding Verification of Understanding
Employees, Documented Proc. Learning Events
Instructions Training
Spare Parts System Back-Ups Scheduled Downtime,
etc.
Outlines Indicators to Monitor Actions
to Prevent Failures, Resources Needed On-Hand
Preventive Maintenance Plan
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Six Sigma Road Map - Control DFSS
Generates/Determines
Inputs Affecting Project Others Affected by
Project
Outlines Procedures for Making Changes
Predictions of Change Affects
Change Control
Cost to Control vs CTQ Attainment Benefits
Achieved
Checks Project Controls Appropriate for
Achieving CTQs and Benefits
Control
Cost Review
Sustained Process Will Meet Customers Expectations
All Agree and Commit to the Control Strategy as
the Means of sustaining the Defect Reductions
DFSS Design for Six Sigma
Functional Team Sign-Off Celebrate!
Yes
No
Re-Design
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Six Sigma - How Does It Work?
Select the Right People
Provide Intense Training
Select Key Problem Areas
Assign Projects to Black Belts
Obtain Results

• Champions
• Master BBs
• Black Belts
• Brown Belts

• Strong
• Analytical Skills
• Strong Problem
• Solving Skills
• People
• Leadership Skills

• Critical to
• Success
• Chronic or Systemic
• Fastest or
• Largest Return

• Lead Focused
• Effort
• Apply Skills and
• Tools
• Determine
• Causes and
• Solutions
• Reduce Variability

• Preventative
• Proactive Vs
• Appraisal
• Reaction
• Fewer Trials
• Faster
• Accurate
• Solutions

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Six Sigma Basics

• Six Sigma Provides a Disciplined Method for
  Reducing Defects.
• Customers Define Their Critical to Satisfaction
  Measures (CTSs).
• Champions Define Key Outputs of a Process Whose
  Defects Most Significantly Impact the CTSs
  Assign Projects to Black/Green Belts.
• Black/Green Belts Identify the Process Inputs
  That Most Significantly Influence the Outputs.
• They Then Eliminate the Root Causes of Variation
  in the Inputs and Put in Controls to Prevent
  Reoccurrence of the Problem.
• Design For Six Sigma Engineers Identify and
  Exploit Areas of Decreased Sensitivity to the
  Input Variables in Order to Design In Quality.

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Six Sigma Reference

• www.isixsigma.com
• The Six Sigma Way How GE, Motorola, and Other
  Top Companies are Honing Their Performance by
  Peter S. Pande et al, Robert P. Neuman, Roland R.
  Cavanagh.
• The Six Sigma Handbook A Complete Guide for
  Greenbelts, Blackbelts, Managers at All Levels
  by Thomas Pyzdek