Introduction to Six Sigma

Design. Build. Ship. Service.

Six Sigma Operational Green Belt Training

FSG-S-M01

Introduction to Six Sigma

2Design. Build. Ship. Service.

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APPROVALS

NAME TITLE DEPT NAME DATE Anand Pradhan Senior Director Six Sigma

REVISION HISTORY

REVISION DESCRIPTION OF CHANGE ORIGINATOR RELEASE DATE 01 Document formatted as per DMS policy Victor Chow April 26, 2010

This document is proprietary and confidential property of Flextronics.

Document Title: Introduction to Six Sigma

Document# FSG-S-M01

Organization: Global Business Excellence

Revision: 01

Document Owner: Victor Chow

Effective Date: April 26, 2010


Green Belt Training Objectives

• To learn the systematic approach of Six Sigma problem solving method:• M before A before I before C

• To understand and effectively utilise the M.A.I.C. tool kit

• To understand how you will be affected by the application of the Six Sigma methodology


Module Objectives

• Six Sigma concept

• Define, Measure, Analyze, Improve and Control

• Explain the definition and scope of Green Belt and Black Belt

• Define KPIV and KPOV

• Explain how process outputs are a function of the inputs

• Explain the value of measurement


99% Good is Not Good Enough

• 5,000 incorrect surgical procedures each week

• 20,000 lost articles of mail each hour

• No electricity for almost 7 hours each month

• Unsafe drinking water for almost 15 minutes each day


7

Sigma Scale of Measure

1,000,000

100,000

10,000

1,000

100

10

1

PPM

••

Restaurant BillsDoctor Prescription Writing

Payroll Processing

Order Write-upJournal Vouchers

Wire TransfersAirline Baggage Handling

Purchased Material

Lot Reject Rate

Domestic Airline Flight Fatality Rate (0.43 PPM)

Best-in-Class

AverageCompany

3 4 5 621

IRS - Tax Advice

(phone-in)

(140,000 PPM)

Where Do Industries Stand?


How Does Six Sigma Make the Difference?

• Vision

• Philosophy

• Vehicle for:• Customer focus• Breakthrough improvement• Continuous improvement• People involvement

• Aggressive goal

• Metric (standard of measurement)

• Method


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


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


TechnologyCapability

Organization

PeopleProcesses

Customer Focus: A Model for Success

• Business survival is dependent upon how well we satisfy our customers

• Customer satisfaction is a function of quality, price, and delivery

• Quality, cost, and prompt delivery are dependent upon capability


What’s the Strategy?

• Know what’s important to the Customer (CTQ’s)

• Reduce defects

• Center around target

• Reduce Variation


Six Sigma - Six Sigma Enables Breakthrough Level Improvement!

1 2 3 4 5The problem with continuous improvements as the only goal,Organization sees improvement BUT loses the game.

Time in Years

Standard Approaches

• Curr ent Tools• Kaizen• Lean Manufactur ing• Re-engineer ing• Typical TQM

Impr

ovem

entBreakthrough Strategy

- Tr ained & Dedicated Individuals

- Analytical Exper tise- >70% Improvement per

Project

Six Sigma

Breakthrough Strategy


Time

Rej

ect R

ate

Special Variation

Historical Level (0 )

Optimum Level (1 )

Natural Variation under 0

Natural Variation under 1

(±30 )

(±31 )

Quality Breakthrough


Process Variation Causes A “Hidden Factory” Increased Cost – Lost Capacity

Each defect must be detected, repaired and placed backin the process. Each defect costs time and money.

Yield After Inspection or Test

ScrapScrap

ReworkReworkHidden Factory

NOT OK

OperationOperationInputsInputs InspectInspect First Time First Time YieldYield

OK

Time, cost, people

90% 90% Customer QualityCustomer Quality

The Hidden Factory


66% 66% is notis not 90% 90% ... why not?... why not?

ScrapScrap

90% 90% Customer QualityCustomer Quality

ReworkReworkHidden Factory

NOT OK

Yield After Inspection or Test

OperationOperationInputsInputs InspectInspect First TimeFirst Time YieldYield =

OK

Process1 2 3

Rolled Yield 81 % 73 %

4

66 %

Final Test

=90%90% YieldYield

90%90% YieldYield

90%90% YieldYield

90%90% YieldYield

90%90% YieldYield

Using Final Test first time yield ignores the hidden factory. Final test performance is a function of inspection/test or prevention.

Rolled Yield vs. First-Time Yield


Formulas to Know

Measures:

• DPU (Defects per Unit) = Defects / Unit

• PPM (Defects per Million Units) = Defects / Unit × 106

• TOP (Total Opportunities) = Units × Opportunities to make defects

• DPMO (Defects per Million Opportunities) = Defects / TOP × 106

• RTY (Rolled Throughput Yield) = The likelihood that any given unit of product will contain 0 defects

• YRT = RTY = Yield Process1 × YieldP2 × … × YieldP(Final Inspection)n


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.

2 308,5373 66,8074 6,2105 2336 3.4

PPMPPM

ProcessCapabilityProcess

CapabilityDefects perMillion Opp.

Six Sigma – Aggressive Goal


How Does a 6 Sigma Process Look Like ?

Average Deviation from Mean

1

TUSL

p(d)

p(d)

1 2 3 4 5 6

33

This is a 6 Sigma Process


If the initial data were given as 3

short-term, the conversion to long-term would be:

The Industry Standard is to report a process as short term Sigma for benchmarking purposes.

1.5 1.5

Short-TermSigma level

ShiftFactor

Long-TermSigma level

LSL USL

Short-Term: 1350 ppmLong-Term: 66810 ppm1.5

Short-TermCapability

3

Long-TermCapability

1.5

Short-Term: 1350 ppmLong-Term: 0 ppm

What is Sigma Shift?


99.99966% Good (6 Sigma)

20,000 lost articles of mail per hour

Unsafe drinking water for almost 15 minutes each day

5,000 incorrect surgical operations per week

Two short or long landings at most major airports each day

200,000 wrong drug prescriptions each year

No electricity for almost seven hours each month

Seven articles lost per hour

One unsafe minute every seven months

1.7 incorrect operations per week

One short or long landing every five years

68 wrong prescriptions per year

One hour without electricity every 34 years

99% Good (3.8 Sigma)

Six Sigma – Practical Meaning


- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Sweet FruitDesign for Six Sigma (DFSS)

Bulk of FruitProcess Characterization and Optimization (DMAIC)

Low Hanging FruitSeven Basic Tools (QCC)

Ground FruitLogic and Intuition

Process EntitlementProcess Entitlement

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The Fruit of Six Sigma


Y

Dependent

Output

Effect

Symptom

Monitor

X1 . . . XN

Independent

Input-Process

Cause

Problem

Control

f (X)f (X)Y=Y=To get results, should we focus our behavior on the Y or X?

Control well of inputs, then eventually the good output will follow

Six Sigma Methodology Philosophy Y=f(X)


ProcessX1X2X3..

Y1Y2..

Either operational or transactional, all consists of process

y f x x xk ( , ,... , )1 2

Practical Problem

Measure

Statistical Problem

Analyse

Statistical Problem

Analyse

Statistical Solution

Improve

Statistical Solution

Improve

Practical Solution

Control

Practical Solution

Control

Define

Overall Approach (DMAIC)


1.Customer Needs

2.Biggest Problem

3.Pool Quality or highest variation

Define project

2.Financial Gain Projection

1.Measurable metrics & Set target

3.Non- financial Gain

4. Scope project

Define


Process Performance

3. Current process performance

2. Ensure data collected is reliable (Gage capabilities)

1. Understand Process, Re-scope if necessary

Late Delivery

Taste No Good

Over burn

Customer Complaint

Recipe

Unbalance ingredientNot enough favor

Bread too Dry

Bread expired

Suppli-er prob

Oven process not standardize

Time too long

Unbalance raw materials

Temp not control

Frequent open door

How about late delivery ?

Late DeliveryLate Delivery

Taste No GoodTaste No Good

Over burnOver burn

Customer Complaint

Recipe


Bread too Dry

Recipe


Bread too Dry

Bread expired

Suppli-er prob

Bread expired

Suppli-er prob


Time too long


Temp not control

Frequent open door


Time too long


Temp not control

Frequent open door

How about late delivery ?

4. Deep out all possible Causes(Do not jump to solution, then you might miss out the major causes)

1 2 3 4

SAP

Entr

y A

ccur

acy

Inve

ntor

y St

ock

leve

lN

o Sh

ipm

ent

Mis

s

Rev

enue

Customer Priority 8 10 8 6

Process Step Process InputTotal

1 Perform Receiving Delivery Plan Local Parts 2 8 4 4 1522 Purchase Order 3 4 2 4 1043 Day & Time of Delivery 2 6 4 4 1324 Bill of Materials 6 0 0 1 545 Material 0 6 5 3 1186 07 Submit to IQC Quality Plan 0 6 6 3 1268 09 Data Entry into SAP Purchase Order 3 4 2 4 104

10Data Entry of Material Specifics (Quantity, Part Number, Vendor ID, etc.)

10 5 5 1 176

11 012 Send to Store Label printed from SAP 1 1 1 1 3213 014 Store Recount Quantity Quantity of Parts 9 3 3 1 13215 0

16 Store Kit based on Pull Plan

Label printed from SAP1 1 1 1 32

Total 296 440 264 162LSLTGTUSL

5. Trim down to most possible causes, and drill down to root causes

C&E MatrixCup Size

Customer not Satisfied with our Tea


Brew TimeType of Tea Milk Type

Amount of Sugar

Strength of Tea

Temp. of TeaColor of

TeaCup

Design

Cup Cleanliness

Tea Cleanliness

Cleaning process

Detergent used

Storage

Tea maker

spoon

Quantity too littleTea not clean

Taste of Tea not goodPresentation

not attractive

Cup Size




Amount of Sugar

Strength of Tea


TeaCup

Design

Cup Cleanliness

Tea Cleanliness

Cleaning process

Detergent used

Storage

Tea maker

spoon



not attractive

CRT

Measure


1. Understand Relationship / Graphical analysis

day

sale

s

654321

120

100

80

60

40

20

0

Boxplot of sales by day

TempNo

of

Pati

ent

38363432302826

150

140

130

120

110

100

90

80

70

60

Scatterplot of No of Patient vs Temp

3. Significant analysis on possible causes

USL

LSL1 2 3 4 5

Largest Across-Time Variability

1 2 3 4 5 1 2 3 4 5

Day 1 Day 2 Day 3USL

LSL1 2 3 4 5

Largest Across-Time Variability

1 2 3 4 5 1 2 3 4 5

Day 1 Day 2 Day 3

2. Variation analysis for the root cause

Analyse


1. Understand y=f(x) then optimize X for the best Y

3. Implemented the changes and obtain desired results

DOE & Regression Study

Cup Size




Amount of Sugar

Strength of Tea


TeaCup

Design

Cup Cleanliness

Tea Cleanliness

Cleaning process

Detergent used

Storage

Tea maker

spoon



not attractive

Cup Size




Amount of Sugar

Strength of Tea


TeaCup

Design

Cup Cleanliness

Tea Cleanliness

Cleaning process

Detergent used

Storage

Tea maker

spoon



not attractive

FRT2. List solutions and ensure they are sufficient to achieve project objective

Improve


Report Name Reporting Period From ToOrganization Baseline Period From ToProject Improveme nt GoalDepartment Unit DefinitionDeliverable CharacteristicDeliverable ID Units of MeasureProcess Upper SpecificationStep Target ValueMachine ID Lower SpecificationSpecial Note Default Shift 1.50

Line Charact eri stic D U OP TOP DPU DPO DPMO Shi ft Z.B1 Type A 10 860 42 36,120 0.012 0.0003 277 1.50 4.952 Type B 56 698 95 66,310 0.080 0.0008 845 1.50 4.643 Type C 56 299 65 19,435 0.187 0.0029 2,881 1.50 4.264 Type D 24 257 66 16,962 0.093 0.0014 1,415 1.50 4.495 Type E 54 182 63 11,466 0.297 0.0047 4,710 1.50 4.106 Type F 13 133 37 4,921 0.098 0.0026 2,642 1.50 4.29

7 Type G 58 736 48 35,328 0.079 0.0016 1,642 1.50 4.448 Type H 45 540 45 24,300 0.083 0.0019 1,852 1.50 4.409 Type I 67 952 49 46,648 0.070 0.0014 1,436 1.50 4.48

10 Type J 54 985 43 42,355 0.055 0.0013 1,275 1.50 4.5211 Type K 8 991 38 37,658 0.008 0.0002 212 1.50 5.0212 Type L 71 987 13 12,831 0.072 0.0055 5,533 1.50 4.0413 Type M 39 2 66 132 19.500 0.2955 295,455 1.50 2.0414 Type N 16 724 38 27,512 0.022 0.0006 582 1.50 4.7515 Type O 49 702 62 43,524 0.070 0.0011 1,126 1.50 4.5616 Type P 89 385 62 23,870 0.231 0.0037 3,729 1.50 4.1817 Type Q 89 413 35 14,455 0.215 0.0062 6,157 1.50 4.0018 Type R 8 430 83 35,690 0.019 0.0002 224 1.50 5.0119 Type S 63 864 98 84,672 0.073 0.0007 744 1.50 4.6820 Type T 59 493 35 17,255 0.120 0.0034 3,419 1.50 4.20

Grand = 928 601,444 0.0015 1,543 1.50 4.46

Report Name Reporting Period From ToOrganization Baseline Period From ToProject Improveme nt GoalDepartment Unit DefinitionDeliverable CharacteristicDeliverable ID Units of MeasureProcess Upper SpecificationStep Target ValueMachine ID Lower SpecificationSpecial Note Default Shift 1.50

Line Charact eri stic D U OP TOP DPU DPO DPMO Shi ft Z.B1 Type A 10 860 42 36,120 0.012 0.0003 277 1.50 4.952 Type B 56 698 95 66,310 0.080 0.0008 845 1.50 4.643 Type C 56 299 65 19,435 0.187 0.0029 2,881 1.50 4.264 Type D 24 257 66 16,962 0.093 0.0014 1,415 1.50 4.495 Type E 54 182 63 11,466 0.297 0.0047 4,710 1.50 4.106 Type F 13 133 37 4,921 0.098 0.0026 2,642 1.50 4.297 Type G 58 736 48 35,328 0.079 0.0016 1,642 1.50 4.448 Type H 45 540 45 24,300 0.083 0.0019 1,852 1.50 4.409 Type I 67 952 49 46,648 0.070 0.0014 1,436 1.50 4.4810 Type J 54 985 43 42,355 0.055 0.0013 1,275 1.50 4.5211 Type K 8 991 38 37,658 0.008 0.0002 212 1.50 5.0212 Type L 71 987 13 12,831 0.072 0.0055 5,533 1.50 4.0413 Type M 39 2 66 132 19.500 0.2955 295,455 1.50 2.0414 Type N 16 724 38 27,512 0.022 0.0006 582 1.50 4.7515 Type O 49 702 62 43,524 0.070 0.0011 1,126 1.50 4.5616 Type P 89 385 62 23,870 0.231 0.0037 3,729 1.50 4.1817 Type Q 89 413 35 14,455 0.215 0.0062 6,157 1.50 4.0018 Type R 8 430 83 35,690 0.019 0.0002 224 1.50 5.0119 Type S 63 864 98 84,672 0.073 0.0007 744 1.50 4.6820 Type T 59 493 35 17,255 0.120 0.0034 3,419 1.50 4.20

Grand = 928 601,444 0.0015 1,543 1.50 4.46

1. Documents the changes/good practices that sustain the gain

2. Mistake proof the process then errors are free

UCL

LCL

3. Monitor and control the X then Y can be sustained

4. Problem solved and achieved business results. Celebration!

Control


Six Sigma Deployment Strategy

Black Belt Level•Focus Projects•Make improvement

Operational Level•Reduce process difficulty•Improve operational metrics

Business Level•Customer Loyalty•Improve market share•Increase profitability•Long term viability

Green Belt Level•Focus Project•Migrate the good practices to peers

Company DNA•Methodology become common•Cultural Achieved

The engagement of Black Belt with successful project turnover keeps these gears continue

Your responsibilities


Six Sigma Strategy in Line with Company Vision


Practically, How does Six Sigma Help Us?

In today Market Strategy of Price War ? Business Survival for 6 Sigma Quality Company

Profit

Total Cost to manufactureand deliver

products

Profit

TheoreticalCosts

Cost ofPoor Quality

COPQ

Price Erosion

TheoreticalCosts

Cost ofPoor Quality

COPQ

Price Erosion

TheoreticalCosts

Cost ofPoor Quality

COPQ

TheoreticalCosts

Cost ofPoor Quality

COPQ

Profit

TheoreticalCosts

COPQ

Profit

TheoreticalCosts

COPQ

Which Feels Better??


Cost of Poor Quality

• Are we doing thing right at the first time?• Rework, Inspection, Repeat steps and etc …

• Are we doing too many non value added steps?• Delay, waiting, paper works and etc …

• Are customers unsatisfied and walking away from us?• Cost of opportunities ….

• Are our processes at 6 Sigma performance level?• Scrap, late delivery, …

• Do we have high inventory problem?• Cost of inventory, obsoletion risk, …

Do you think all these can be good Six Sigma projects?


Cost of Poor Quality “Iceberg”

Engineering change orders

Traditional Quality Costs

Lost Opportunity

Hidden Factory

Lost salesLate delivery

Long cycle times

Expediting costs

Excess inventory

Additional Costs of Poor Quality(Intangible Measurable)

(Tangible Measurable)

(Difficult or impossible to measure)Lost Customer Loyalty

More Setups

ScrapRework

InspectionWarranty

Rejects

Administration / DispositionConcessions

Average COPQ approximately 25% of Sales


Summary

• Six Sigma is more than just a statistical measure – it is a strategy and a cultural shift.

• Six Themes of 6 Sigma• Genuine Focus on Customer• Data and Fact Driven Management• Process Focus, Management and Improvement• Proactive Management• Boundary-less Collaboration• Drive for Perfection

Design. Build. Ship. Service. 36

Six Sigma Operational Green Belt Training

FSG-S-M01

Introduction to Six Sigma

Appendix: Terms and Definitions


Six Sigma Terms and Definitions

1. Customer• Any “one” who receives a product, service or information from an operation or

process.• The term is frequently used to describe “External” customers – those who

purchase the manufactured products or services which are the basis for the existence of the business. However, “Internal” customers, also important, are internal “persons” who receive the intermediate or internal products or services from internal “Suppliers”.

2. CTQ• Critical to Quality Characteristic – a characteristic of a product, service or

information which is important to the customer. CTQs must be measurable in either a “continuous-scale” manner (e.g. 3.02 mg, etc) or a descriptive manner (correct/incorrect, etc).


Six Sigma Terms and Definitions (cont)

3. Opportunity• Any event which generates an output (product, service or information).

4. Unit• A discrete item (lamp, invoice, etc) which possesses one or more CTQ (note:

units must be considered with regard for the specific CTQ(s) of concern by a customer and/or for a specific process)

5. Defect• Any output of an opportunity which does not meet a defined specification:

OR a failure to meet an imposed requirement on a single quality characteristic or a single instance of non-conformance to the specification.

6. DPU• Defects per Unit – the number of defects counted, divided by the number of

“products” or “characteristics” (units) produced.



7. DPMO• Defects per Million Opportunities – the number of defects counted, divided

by the actual number of opportunities to generate the defect, multiplied by one million.

8. COPQ• Cost of Poor Quality – the cost incurred from generating a defect

OR Cost which would be avoided if, rather than a “defect”, the “opportunity” yielded a “success”.

9. KPIV• Key Process INPUT Variable – an independent material or element, with

descriptive characteristic(s), which is either an object (going into) or a parameter of a process (step) and which has a significant (key) effect on the output of the process.



10.KPOV• Key Process OUTPUT Variable – a dependent material or element, with

descriptive characteristic(s), which is the result of a process (step) and which either is, or significantly affects the customer’s CTQ

11.Rolled Throughput Yield• The likelihood that any given unit of product, service or information will

contain Zero Defects.

12.Capability• The best that a process, which is in control, can perform under the current

conditions.

13.Entitlement• The best potential performance of a process, based on process design.

14.DFSS• Design for Six Sigma

Design. Build. Ship. Service. 41

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