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INTRODUCTION TO SIX SIGMA HAWTHORN 6SIGMA QUALITY SOLUTIONS [email protected] [email protected] WWW.HSQS.IN WWW.HSQS.IN

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Page 1: Sixsigmaintrorerevisedii 13198308548378-phpapp02-111028144148-phpapp02

INTRODUCTION TO SIX SIGMA

HAWTHORN 6SIGMA QUALITY SOLUTIONS

[email protected]

[email protected]

WWW.HSQS.WWW.HSQS.ININ

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TOPICS (SESSION 1)

Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How Six Sigma can be Beneficial for You

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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.

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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 … ?

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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.

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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.

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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)

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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

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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?

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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

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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

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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

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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.

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TOPICS

Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How Six Sigma can be Beneficial for You.

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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.

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SIX SIGMA COMPANIES

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SIX SIGMA AND FINANCIAL SERVICES

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TOPICS

Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How Six Sigma can be Beneficial for You

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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

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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

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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

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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

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Six SigmaSix Sigma

ANALYZE – POTENTIAL ROOT CAUSESWHAT AFFECTS OUR PROCESS?

y = f (xy = f (x11, x, x22, x, x33 . . . x . . . xnn))

Ishikawa Diagram

(Fishbone)

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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

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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

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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

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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

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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

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TOPICS

Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How Six Sigma can be Beneficial for You

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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

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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

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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

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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

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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?

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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.

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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.