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Basic Concepts of Six Sigma

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Title: Basic Concepts of Six Sigma


1
  • Basic Concepts of Six Sigma
  • July 2, 2009
  • Group 4
  • Jeff Crosbie, Wajeeh Qazi, Chris Roan, Otto
    Velasquez

2
Basic Concepts of Six Sigma
  • 20 years of Six Sigma origins and history
  • An overview of Six Sigma methodology
  • Six Sigma tools and support products
  • The future Six Sigma challenges and next steps

3
Origins of Six Sigma
  • Six Sigmabuilt on TQM
  • Deming
  • Taguchi
  • Juran
  • Continuous Improvement
  • If you cant measure it, you cant
    manage it.
  • --W. Edwards Deming (1900 - 1993)
  • Evolved into a management philosophy value
    creation and improvement for customers and
    shareholders
  • Six Sigma TQM (or CQI) Stronger Customer
    Focus Additional Data Analysis Tools Project
    Management Financial Results

4
History of Six Sigma
  • Motorola Invented Six Sigma in 1985 / 1986
  • Developed by engineers Bill Smith and Mikel Harry
    as a metric used to describe expected level of
    design margin and measure product quality
  • 1st recipient of Baldrige National Quality Award
    1988
  • AlliedSignal (Honeywell) Larry Bossidy (early
    90s)
  • Credited Six Sigma with company turnaround (1994
    -1998)
  • GE Jack Welch (1995 Presentation by Larry
    Bossidy)
  • Operating margin improved from 14.8 (1996) to
    18.9 (2000)
  • After Welch adopted Six Sigma more than a quarter
    of FORTUNE 200 followed suit

We have tended to use all our energy and Six
Sigma science to move the mean delivery time
to 12 days. The problem is the mean never
happens, and the customer is still seeing
variances a heroic 4-day delivery time on one
order, with an awful 20-day delay on another, and
no real consistency variation is evil. Jack
Welch, former GE CEO
5
Companies using 6 Sigma
  • 3M
  • Advanced Micro Devices
  • Agilent Technologies
  • Air Canada
  • Amazon.com
  • AXA
  • Bank of America
  • Bechtel Corporation
  • Boeing
  • Canada Post
  • Caterpillar Inc.
  • CIGNA
  • Cognizant Technology Solutions
  • Computer Sciences Corporation
  • Cummins Inc.
  • Deere Company
  • Dell
  • DHL
  • Dominion Resources

Quest Diagnostics, Inc Raytheon Samsung Group
SGL Group Shinhan Bank Shinhan Card Siemens
AG SKF Vodafone Starwood Hotels
Resorts Sterlite Optical Technologies Teradyne
Trane Textron The McGraw-Hill Companies TSYS
(Total System Services) United States Air Force
United States Army United States Marine
Corps United States Navy UnitedHealth
Group Wipro EMC
Flextronics Ford Motor Company General Dynamics
Genpact HSBC Group Ingram Micro Korea Telecom
Kraton Polymers KTF LG Group Littlewoods Shop
Direct Group Lockheed Martin Mando Corporation
McKesson Corporation Merrill Lynch Microflex,
Inc. Mumbai's Dabbawala National Australia Group
Europe Network Rail Nortel Networks Northrop
Grumman Patheon
http//en.wikipedia.org/wiki/List_of_Six_Sigma_com
panies
6
Origin of Six Sigma processes
  • Probability density function
  • Gaussian (normal) distribution
  • (aka Bell Curve)
  • Defects
  • data points that fall outside upper and
    lower specification limits
  • Long Term process shift
  • 1.5 ? shift from mean ?

Results 1 ? 690,000 DPMO 31 efficiency 2
? 308,000 DPMO 69.2 efficiency 3 ? 66,800
DPMO 93.32 efficiency 4 ? 6,210 DPMO
99.379 efficiency 5 ? 230 DPMO 99.977
efficiency 6 ? 3.4 DPMO 99.9997 efficiency
http//www.sixsigmaspc.com
7
Why Six Sigma processes?
Process 4? (99.4) 6? (99.99966)
Internet Connection 54 Hours per year lt 2 minutes per year
Packaging Process 6 per 1000 packages 3 per million
Electricity 1 hour per week 2 seconds per week
Product Design 6 out of every 1000 design elements 3.4 out of every 1 million design elements
Telephone 4 hours per month 9 seconds per month
Shipments 1 defective package per 3 truckloads 1 defective package per 5350 truckloads
Airline Safety 2 long or short landings at a major airport each day 1 long or short landing every five years
8
Six Sigma Methodology--Wajeeh Qazi
  • Six Sigma core methodologies
  • Existing processes DMAIC method
  • Design for Six Sigma DFSS
  • Six Sigma organizational roles
  • Keys to success in implementing Six Sigma

9
Six Sigma methodology
10
DMAIC method existing processes
  • Define requirements and customer expectations
    current process by mapping the business flow
  • Measure key aspects of the current process
    develop a data collection plan and collect
    relevant data
  • Analyze the data to verify cause-and-effect
    relationships and sources of variation
  • Improve the process based upon data analysis
    using techniques like design of experiments
    develop creative alternatives and implement
    enhanced plan
  • Control to ensure that any deviations from target
    are corrected before they result in defects set
    up control mechanisms and continuously monitor
    process

11
DFSS new processes (DMADOV method)
  • Define design goals that are consistent with
    customer demands and the enterprise strategy.
  • Measure and identify CTQs (characteristics that
    are Critical To Quality), product capabilities,
    production process capability, and risks.
  • Analyze to develop and design alternatives,
    create a high-level design and evaluate design
    capability to select the best design.
  • Design details and plan for design verification.
    This phase may require simulations.
  • Optimize the design and plan for error proofing.
    This phase may require additional simulations.
  • Verify the design, set up pilot runs, implement
    the production process and hand it over to the
    process owners.

12
Six Sigma roles
  • Executive - CEO and other top management
    establish vision for Six Sigma implementation
  • Champion - responsible for Six Sigma
    implementation across the organization and
    provide mentoring to Black Belts
  • Master Black Belt - 100 dedicated to Six Sigma,
    mentoring other black belts and green belts, and
    responsiblefor consistent application of Six
    Sigma acrossdepartments
  • Black Belt - 100 dedicated applicationof Six
    Sigma to their project portfolio
  • Green Belt - employees using Six Sigma
    methodology as part of job responsibilities under
    guidance of Black Belts
  • Others (Brown/Yellow/Gold) company specific
    designations

13
Keys to Six Sigma implementation
  • Management commitment and involvement
  • Understanding of six sigma methodology, tools,
    and techniques
  • Linking six sigma to business strategy
  • Linking six sigma to customers
  • Project selection, reviews and tracking
  • Organizational infrastructure
  • Cultural change
  • Project management skills
  • Linking six sigma to suppliers
  • Training
  • Linking six sigma to human resources

Antony, J., Banuelas, R., 2002. Key ingredients
for the effective implementation of six sigma
program. Measuring Business Excellence 6 (4),
2027.
14
Six Sigma tools--Otto Velasquez
  • Tools used in connection with Six Sigma
  • Six Sigma products and software
  • SPC Wizard sigma calculator

15
Six Sigma tools
  • Brainstorming - encourages open thinking and
    allows team members to build on each other's
    ideas
  • Flow Charts and Process Maps - allows a team to
    identify the order of events in providing a
    product or service, uncover problems, and compare
    the "ideal" work flow to what actually happens in
    the workplace
  • Pareto Charts - which identify the critical few
    issues that impact cost and/or customer
    satisfaction
  • Root Cause Analysis - a method to help determine
    the true cause of problems (fishbone diagram)
  • Failure Mode and Effects Analysis (FMEA) -
    analysis of potential failure modes and
    determination of the consequence of failures
  • Control Charts - method to observe and improve
    process performance

16
DMAIC Phase - Define
Purpose of the Phase Tools Used
Define the Customer Project planning
Define the KOPV Project Charter
Define the Customer Requirement Force Field analysis
Set up the cross functional team Stakeholder Analysis
Define the resources needed SWOT Analysis
Identify the customers of the project Work Breakdown Structure
Identify the Stakeholders Voice of the Customer
Voice of the Business
Process Flow Map
SIPOC Analysis
17
DMAIC Phase - Measure
Purpose of the Phase Tools Used
Collect data pertaining to the Y and the Xs Data Collection
Identify the Xs (the factors that contribute to the problem) 7 Basic Tools
Measure the current process capabilities and performance Process Metrics
System Diagram
Process Capabilities
Benchmarking
Gage RR
Cost Of Poor Quality
18
DMAIC Phase - Analyze
Purpose of the Phase Tools Used
Measure the correlation between the Xs and the Y Regression analysis
Determine the root causes of the process variations Analysis Of Variance
Identify the non value added steps Pareto Analysis
Identity the ideal process Cause and Effect Analysis
Fishbone diagram
Cause and Effect Matrix
Failure Mode and Effect Analysis (FMEA)
Hypothesis Testing
Decision And Risk Analysis
Process Capability Analysis
Process Performance Analysis
19
DMAIC Phase - Improve
Purpose of the Phase Tools Used
Based on the FMEA performed in the Analyze phase, develop action plans to prevent variations Design Of Experiment
Reassess the process Failure Mode Effect and Analysis
Develop solutions Taguchi Method
Quality Function deployment
Brainstorming
Poka Yoke
5S
Pugh Matrix
20
DMAIC Phase - Control
Purpose of the Phase Tools Used
Develop standardization plan Manage the performance
Manage the performance Take preventive actions
Take preventive actions Provide training
Statistical Process Control
21
Six Sigma support products
  • iGrafx Process for Six Sigma
  • EngineRoom by MoreSteam
  • IBM WebSphere Business Modeler
  • JMP
  • Microsoft Visio
  • Minitab
  • QPR ProcessGuide by QPR Software
  • Quality Companion by Minitab
  • SigmaXL
  • SigmaFlow
  • Software AG webMethods BPM Suite
  • Statgraphics
  • STATISTICA
  • Telelogic System Architect
  • Actuate
  • The Unscrambler
  • Select Architect Business Process Modeling
  • DMAIC/Lean Online Collaboration Tools
  • Grouputer SigmaSense

22
Six Sigma calculator
23
Evolution of Six Sigma--Chris Roan
  • Six Sigma today
  • Challenges and challengers of Six Sigma
  • The future of Six Sigma

24
So what exactly is Six Sigma?
  • Target metric 3.4 defects per million
    opportunities
  • Continuous improvement the path
  • Process variance the enemy
  • Data driven emphasis on metrics, measurement,
    data collection and analysis
  • Institutional successful implementation
    requires buy-in across organization, top down
    driven, extensive belt training
  • Innovative Methodologies focus on Voice of
    Customer, DMAIC, DFSS
  • Adaptive sees itself as umbrella
    incorporating best practices, e.g. Lean Six Sigma
  • Profitability focused financial results-driven
    system

25
Six Sigma challenges
26
Six Sigma challenges
  • Only 58 out of Fortune 500 have adopted
  • Derails Innovation (3M case study)
  • More dependent on human and org changes
  • Manufacturing focused on reducing the number of
    defects
  • Service Industries focused on reducing
    transactional errors
  • Exposes flaws in the execution, but ignores flaws
    within process itself
  • Many small / medium companies have not
    implemented
  • Assumption that it is only for larger enterprises
  • Certification has became a cottage industry

27
Six Sigma challenges
Out of 400 companies surveyed single greatest
challenge was Culture Change
28
Six Sigma challenges
  • Continuing disconnect Not Manufacturing but
    Transactional
  • Transactional What to measure
  • Manufacturing How to measure more accurately
  • Transactional Six Sigma Far more effective
  • Based on arbitrary standards
  • Standardized approach will not work
  • Monitor process different
  • Incomplete Tool Set
  • Different skill set
  • Process is inherent in manufacturing
  • Transactional is about tasks
  • Independently performed
  • Decisions rely on the human element
  • Criteria less precise

29
The future of Six Sigma
  • Continuing shift from TQM
  • May appear similar, in reality quite different
  • Quality improvement process to next level
  • Potential to outlast quality management programs
  • Scope broader
  • Can be applied to every business process
  • Growing awareness
  • Small MediumEnterprises
  • Lean Six Sigma

30
QA
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