A BRIEF INTRODUCTION TO SIX SIGMA

1
A BRIEF INTRODUCTION TO SIX SIGMA

• Dr. Ömer Yagiz
• Department of Business Administration
• METU

2
What is six-sigma?

• Six-sigma is a is a comprehensive and flexible
  system for achieving, sustaining, and maximizing
  business success by minimizing defects and
  variability in processes.
• It relies heavily on the principles and tools of
  TQM.
• It is driven by a close understanding of customer
  needs the disciplined use of facts, data, and
  statistical analysis and diligent attention to
  managing, improving, and reinventing business
  processes.

3
What is six-sigma?

• Another definition from Isixsigma.com
• Six Sigma is a rigorous and disciplined
  methodology that uses data and statistical
  analysis to measure and improve a company's
  operational performance by identifying and
  eliminating "defects" in manufacturing and
  service-related processes.

4
What is six-sigma?

• GE and many other successful practitioners of
  six-sigma, view it as
• a strategy
• focusing on what the customer wants, internal or
  external
• aiming at total customer satisfaction
• achieve better business results as measured by
  market share, revenue and profits

5
What is six-sigma?

• a discipline
• it has a formal sequence of steps, called the
  Six-sigma Improvement Model, to accomplish
  desired improvements in process performance
• the goal is to simplify processes in order to
  make them more efficient and effective
• a set of tools
• makes use of many powerful tools, some of them
  statistical in nature, in order to monitor,
  analyze, correct and/or redesign operations and
  processes used in all areas of an organization

6
Origins of Six-sigma

• Motorola
• credited with developing six-sigma in 1987 to
  improve its manufacturing capability in a world
  marketplace that was becoming increasingly
  competitive
• set a stretch goal in 1987 to
• Improve product and services quality ten times
  by 1989, and at least one hundred fold by 1991.
  Achieve six sigma capability by 1992.

7
Origins of Six-sigma

• At Motorola, six sigma became part of the common
  language of all employees. To them it meant near
  perfection, even if some did not understand the
  statistical details.
• Six Sigma helped Motorola realize powerful
  bottom-line results in their organization - in
  fact, they documented more than 16 Billion in
  savings as a result of Six Sigma efforts.

8
Origins of Six-sigma

• Other early adopters of Six Sigma who achieved
  well-publicized success include Honeywell
  (previously known as AlliedSignal) and General
  Electric, where the method was introduced by Jack
  Welch. By the late 1990s, about two-thirds of the
  Fortune 500 organizations had begun Six Sigma
  initiatives with the aim of reducing costs and
  improving quality.

9
Statistical meaning of Six-sigma

• Every instance of a product coming off a
  production line is in some way different from
  every other instance. The thickness or length of
  a part is never exactly the same
• The amount of time it takes to perform a certain
  transaction varies from instance to instance
• In other words, variation is a fact of life in
  manufacturing and services

10
Statistical meaning of Six-sigma
Process variability
11
Process Capability

• Süreç (proses) yeterlilik
• Process capability is the ability of the process
  to meet the design specifications for a service
  or product.
• Nominal value is a target for design
  specifications.
• Tolerance is an allowance above or below the
  nominal value.

12
Process Capability
Process is capable
13
Process Capability
Process is not capable
14
Calculating population standard deviation from a
single large sample
15
Standard deviation of a group of data
where arithmetic mean of data i
1, 2, , n n total number of
observations
16
Process Capability
Process Capability 6s
17
Relationship of Proc. Cap. to specification limits

• Three cases (situations)
• 6s lt USL LSL
• 6s USL LSL
• 6s gt USL LSL

18
Relationship of Proc. Cap. to specification limits

• Process Capability and the specification limits
  (i.e., tolerances) are combined to form a
  Capability Index

Case 3
Case 2
Case 1
19
Capability Index Cp

• The capability index measures whether the process
  or machine can produce pieces which conform to
  the specifications.
• The larger the index, the more likely the process
  will generate conforming parts or pieces provided
  that the process is centered at the nominal or
  target value. (CP gt 1.33)
• CAUTION The capability index does not indicate
  process performance in terms of the nominal or
  target value.

20
An Illustration of Process Capability Index
Nominal 7 USL 9 LSL 5
Suppose
Although Cp gt 1.33, the process is not capable.
Why not ?
21
A better measure of process capability (Cpk)
This measure takes into account the centering of
the process. We first obtain two one-sided
indexes, then select the minimum of the two.
22
Cpk Illustration

• Nominal 7 USL 9 LSL 5

The process is capable.
23
Cpk Illustration
24
Cpk Illustration
If
The process is barely capable.
25
Cpk Illustration
The process is barely capable.
26
Process variation and its effect on process
defects per million opportunities (DPMO)
Process variation
Process variation
Process variation
Process variation
LSL
LSL
LSL
LSL
USL
USL
USL
USL
3 sigma process variation 66800 defects per
million opportunities
4 sigma process variation 6200 defects per
million opportunities
5 sigma process variation 230 defects per
million opportunities
6 sigma process variation 3.4 defects per
million opportunities
27
Case of process shift in the long run
With the process centered exactly in the middle
(nominal dimension), only 2 defectives out of one
billion are expected. If the process mean shifts
1.5 sigma, the expected number of defectives
will be 3.4 per million.What is the key to
achieving six-sigma capability?
28
Defects per million occurrencesDPMO

• Sigma quality levels (defects per million)

Sigmas DPMO
2 308,538
3 66,803
4 6,200
5 233
6 3.4

29
Now what?

• What all this explanation boils down to is this
• The objective of Six Sigma improvement efforts is
  to reduce process output variation so that on a
  long term basis, which is the customer's
  aggregate experience with our process over time,
  this will result in no more than 3.4 Defects Per
  Million Opportunities DPMO.
• therefore make sure that you have a capable
  process, i.e. keep 6s lt USL LSL with proper
  centering, and
• reduce process variation as much as you can so
  that you achieve a DPMO of 3.4 defects. (In
  reality, this is not achieved easily but this
  should be the ultimate goal of your improvement
  efforts)

30
What does six-sigma do?

• Six Sigma focuses on improving quality by helping
  organizations produce products and services
  better, faster and cheaper.
• In more traditional terms, Six Sigma focuses on
  defect prevention, cycle time reduction, and cost
  savings. Unlike cost-cutting programs that reduce
  value and quality, Six Sigma identifies and
  eliminates costs that provide no value to
  customers in other words, waste costs.

31
What does six-sigma do?

• The Six Sigma quality philosophy incorporates
  many of the traditional quality philosophies and
  approaches established by Shewhart, Deming,
  Juran, Taguchi, and Ishikawa, by developing an
  organized framework for continuous improvement.

32
Six-sigma infrastructure

• A very powerful feature of Six Sigma is the
  creation of an infrastructure to assure that
  performance improvement activities have the
  necessary resources. Six Sigma makes improvement
  and change the full time job of a small but
  critical percentage of the organizations
  personnel.

33
Six-sigma infrastructure

• These full time change agents who act as the
  catalysts that institutionalize change are
  classified as follow
• Champions and Sponsors Six Sigma champions are
  high-level individuals who understand Six Sigma
  and are committed to its success. They are
  usually a member of senior management who are
  charged with leading and energizing the Six Sigma
  effort and most often theirs is a full-time
  position, such as an Executive Vice-President.
  They are also often charged with identifying
  projects, prioritizing those projects in relation
  to the organizations strategy, and assigning
  projects to Black Belts and/or Green Belts.
  Sponsors are owners of processes and systems, who
  help initiate and coordinate Six Sigma
  improvement activities in their areas of
  responsibility.

34
Six-sigma infrastructure

• Master Black Belts Master Black Belts are the
  senior technical advisors for a Six Sigma effort,
  providing technical leadership for the Six Sigma
  program. Thus, they must know everything the
  Black Belts know, as well as understand the
  theory on which the statistical methods are
  based. Master Black Belts must be able to assist
  Black Belts in applying the methods correctly in
  unusual situations.

35
Six-sigma infrastructure

• Black Belts The front line leaders of Six Sigma
  are called black belts. These individuals are
  full-time project leaders with the primary
  responsibility of providing technical expertise
  and leadership for process improvement projects.
  Since they are dedicated to the implementation,
  it becomes cost effective to invest additional
  resources in developing the Black Belts ability
  to apply a broad range of process improvement
  tools and techniques

36
Six-sigma infrastructure

• Green Belts are Six Sigma project leaders
  capable of forming and facilitating Six Sigma
  teams and managing Six Sigma projects from
  concept to completion. They receive a wide range
  of training that covers project management,
  quality management tools, quality control tools,
  problem solving, and descriptive data analysis.
  It is generally a part-time commitment and
  suitable for middle managers, engineers and
  supervisors.

37
Six-sigma infrastructure

• The good thing about the belt system is that
• everyone in the organization is speaking the same
  language.
• Another important impact of such company-wide
  training is that it fosters a culture whereby the
  ownership of quality is viewed as the
  responsibility of the entire organization and not
  just of the quality department.

38
Six Sigma Improvement Model

• known as DMAIC model
• Define, Measure, Analyze, Improve and Control
• highly disciplined and structured problem-solving
  and improvement methodology
• has five steps for improving processes and
  solving problems both in goods production and
  services
• Let us take look at DMAIC in more detail..

39
DMAIC Improvement Model

• Define
• Define the goals of the improvement activity. At
  the top level the goals will be the strategic
  objectives of the organization, such as a higher
  ROI or market share.
• at the operations level, a goal might be to
  increase the throughput of a production or
  service department.
• at the project level goals might be to reduce the
  defect/error level and increase throughput.

40
DMAIC Improvement Model

• Measure
• Measure the existing system.
• establish valid and reliable metrics to help
  monitor progress towards the goal(s) defined at
  the previous step.
• begin by determining the current baseline. Use
  exploratory and descriptive data analysis to help
  you understand the data.

41
DMAIC Improvement Model

• Analyze
• Analyze the system to identify ways to eliminate
  the gap between the current performance of the
  system or process and the desired goal.
• apply statistical and other tools provided by TQM
  to guide the analysis.
• identify several possible causes of variation or
  defects that are affecting the outputs of the
  process.

42
DMAIC Improvement Model

• Analyze contd
• one of the most frequently used tools in the
  Analyze step is the cause and effect diagram.
  Root cause is the number one team deliverable
  coming out of the Analyze step.

43
DMAIC Improvement Model

• Improve
• Improve the process or system.
• modify or redesign the process or system
• be creative in finding new ways to do things
  better, cheaper, or faster.
• use project management and other planning and
  management tools to implement the new approach.
• use statistical methods to validate the
  improvement.
• improvements should be selected based on
  probability of success, time to execute, impact
  on resources, and cost

44
DMAIC Improvement Model

• Control
• teams may develop poka-yokes or mistake proof
  devices to help control a process. The ultimate
  goal for this step is to reduce variation by
  controlling the inputs and monitoring the
  outputs.
• institutionalize the improved system by modifying
  compensation and incentive systems, policies,
  procedures, budgets, operating instructions and
  other management systems.