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An Introduction to Lean Six Sigma

Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

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Page 1: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

An Introduction to

Lean Six Sigma

Page 2: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

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 & Their Relationships as

well as “Managing” their Character

Page 3: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Vision

Goal

Philosophy

Metric

Method

Tool

Symbol

Benchmark

Value

s A level of performance that

reflects significantly reduced

defects in our products

A statistical measurement of our

process capability, as well as a

benchmark for comparison

A set of statistical “tools” to help

us measure, analyze, improve,

and control our processes

A commitment to our customers

to achieve an acceptable level

of performance

.... A means to stretch our

thinking with respect to quality

Sigma is a letter

in the Greek Alphabet

What is Six Sigma?

Page 4: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Define Measure Analyze Improve Control

Six Sigma-DMAIC Methodology

Page 5: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

99% Good (3.8s) 99.9997% Good (6s)

5,000 incorrect surgical operationsper week

1.7 incorrect operations per week

Two short or long landings at mostmajor airports each day

One short or long landing everyfive years

200,000 wrong drug prescriptionseach year

68 wrong prescriptions per year

General Rating Sigma Score % Accuracy DPMO(Defects per Million Opportunity)

Virtual Perfection

6 99.9997% 3.8

Good

5 99.98% 233

4 99.40% 6210

3.5 97.70% 22700

ImprovementNeeded

3 93.30% 66807

2 69.10% 308537

Six Sigma – Literally Speaking

Page 6: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Sigma Scores Against Defects (per Million)-

For Your Reference

% Achievement Defects Sigma Score

Defects per Million

Opportunities

(DPMO)

100.00% 0.00% 6.01 3.30

99.99% 0.01% 5.35 60

99.98% 0.02% 5.04 200

99.95% 0.05% 4.79 500

99.90% 0.10% 4.59 1000

99.80% 0.20% 4.38 2000

99.70% 0.30% 4.25 3000

99.50% 0.50% 4.08 5000

99.00% 1.00% 3.83 10000

98.50% 1.50% 3.67 15000

98.00% 2.00% 3.55 20000

97.50% 2.50% 3.46 25000

97.00% 3.00% 3.38 30000

96.50% 3.50% 3.31 35000

96.00% 4.00% 3.25 40000

95.50% 4.50% 3.20 45000

95.00% 5.00% 3.14 50000

94.50% 5.50% 3.10 55000

94.00% 6.00% 3.05 60000

93.50% 6.50% 3.01 65000

93.00% 7.00% 2.98 70000

92.50% 7.50% 2.94 75000

92.00% 8.00% 2.91 80000

91.50% 8.50% 2.87 85000

91.00% 9.00% 2.84 90000

90.50% 9.50% 2.81 95000

90.00% 10.00% 2.78 100000

Page 7: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

What’s it Based On ?

Customer .....Anyone Who Receives

Product, Service, or Information

Opportunity .....Every Chance to Do Something

Either “Right” or “Wrong”

Successes Vs. Defects .....Every Result of an Opportunity Either Meets

the Customer Specification or it Doesn’t

Page 8: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Lean is a documentation of the key attributes

of the Toyota Production System

Set of principles for efficient operations

having focus on

-- Process improvement by

reducing waste and cycle time

-- Improving process flow

Lean

Page 9: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

IWEIGHING

468Kg

BLENDING COMPRESSION COATINGI I I

3

days

MBR REVIEW

I

4 hours65 hours

11.5 hrs4 hrs 40 mins44 hours

13 hours6 hours 15 hours

10 hours

email

2-3 day lead time 18 month

rolling forecast

Average # of Lots per

month= 200

ManufacturingDaily Schedules

4-5 days

Daily ShipSchedule

BPX

300mg

Building 5 PHILI

Yield = 99%Setup = 150 mins

VA = 9 hrs1 Shift

2 operators

Yield = 98%Setup = 290 mins

VA = 8 hrs 10 mins1 Shift

2 operators

Yield = 99%Setup = 195 mins

VA = 705 mins2 Shifts

2 operators

464.7Kg 454.4Kg457.74 Kg

Building 2Planning

Provide 3 week projections to Mfg

WAREHOUSE

Time spent in Bldg 2 warehouse = 4hrs 40

mins

Yield = 100%Setup = 60 mins

Wghing = 180 min1 Shift

2 operators

Number of reviews = 5

Average Days = 5-11

68 hours

I I I468Kg

PlanningSetup Batch

RecordReview

Cycle Time

Total = 289 hrs

VA = 29 hours

Value Stream Map Can Help Identify

Key Areas to Target for Improvement

Page 10: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Specify value by specific product

Identify the value stream for each product

Make value flow without interruptions

Let the customer pull value from the product

Pursue perfection

Lean Principle

Page 11: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Overproduction-- More than is needed and higher quality than is needed

Waiting (hang time) for machines, operators, raw materials,

etc.

Transportation of materials

-- Wasted time due to unneeded product and material movement

Process inefficiencies and waste:

-- Inspection, NVA Work, duplication of effort

(Inventory):

-- Work in progress and finished product used to cover for process

problems

Motion

-- Unnecessary movement, multiple handoffs, continually searching for

materials, tools, supplies, etc

Defects:

-- Rework, missing information, not meeting specs

Waste in Lean Principle

Page 12: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Key Lean Tools

Process Mapping

Value Stream

Spaghetti

Kaizen Event

5S (Sort, Store, Shine,

Standardize, Sustain)

Mistake Proofing

Standard Work

Work Cell Design

Line Balancing

Videotaping

Rapid Changeover:

Single Minute

Exchange of Dies

(SMED)

Kanban (just in time)

Page 13: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Shift Process Average

Reduce Process

Variation

Robust Products and

Processes

Six Sigma Objectives Lean Objectives

Improve

Process Flow

Reduce Process

Complexity

Reduce:

Waste

Non-Value

Added Work

Cycle Time

Lean Six Sigma Improves Quality, Cost, and Delivery

Improvement Objectives

Page 14: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Strategy

• Know What’s Important to the

Customer

• Reduce Defects

• Center Around Target

• Reduce Variation

Breakthrough Improvement Not Incremental!

Page 15: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Six Sigma . . . the Practical Sense

A Different approach for the Business

Page 16: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

THE GOALS OF SIX SIGMA

Defect Reduction

Yield Improvement

Improved Customer Satisfaction

Higher Net Income

Page 17: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

• Leadership Commitment, Competence & Involvement

• Methodology & Tools

•Data Driven

•Statistically Validated

• Best People 100% Dedicated to Defect Reduction

• Project Focused

What Makes Six Sigma Different?

Page 18: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Old Philosophy of Quality New Philosophy of Quality

LSL USL LSL USL

Area outside the specification

limits represent

quality losses.

Conformance to Specifications

“Goal Post Mentality”

Deviation from the target

represents quality losses.

“Variation is Evil”

-Some Production Guy

No Losses @ the Target

The Changing Quality Philosophy

LSL-Lower Specification Limit

USL- Upper Specification Limit

Page 19: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

The Cost of Poor Quality (COPQ) “Iceberg”

Engineering change orders

Traditional Quality Costs

Lost Opportunity

Hidden Factory

Lost sales

Late delivery

Long cycle times

Expediting costs

Excess inventory

Additional Costs of Poor Quality

(intangible)

(tangible)

(Difficult or impossible to measure)Lost Customer Loyalty

More Setups

Scrap

Rework

Inspection

Warranty

Rejects

Administration /

Disposition

Concessions

Average COPQ approximately 15% of Sales

Page 20: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Getting to Six Sigma

How far can inspection get us ?

(Distribution Shifted ± 1.5s)

s PPM

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

PPM –Parts per

million(normally for defects)

Page 21: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

1

10

100

1000

10000

100000

1000000

1 2 3 4 5 6 7 8 9 10 11

The Impact of Added Inspection

Escaping

PPM

Number of Consecutive

The Y axis represents the undetected defects-per-million defects. Each curve represents the inspection efficiency per inspector.

99% 90% 80% 70%

Note: All sigma values reflect a 1.5s shift

Example: If the likelihood of detecting the defect is

80% and we have 8 consecutive inspectors with this

level of capability, we would expect about 4

escaping defects out of every 1,000,000 defects

produced.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1 2 3 4 5 6 7 8 9 10

Sigma

Number of Consecutive

The Y axis represents the inspection efficiency “sigma.” Each curve represents the inspection efficiency per inspector.

99% 90% 80% 70%

Example: If the likelihood of

detecting a defect is 80%, it

would require about 8

consecutive inspectors to have

a Six Sigma level of

confidence that the defect will

be detected.

Page 22: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

BreakthroughStrategy

Characterization Define

Phase 1:

MeasurePhase 2:

Optimization

Analyze

Phase 3:

Control

Phase 5:

1

10

100

1000

10000

100000

1000000

3 4 5 6 7

1,000,000

100,000

10,000

1,000

100

10

1

2

Sigma Scale of Measure

PPM

Average

Company

Best-in-Class

The Basic Objective

The Breakthrough Methodology

Define the problem...

DMAIC to the Rescue!

Improve

Phase 4:

Page 23: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

The Nature Of The Problem

Six Sigma methodology identifies processes that are off-target,

and/or have a high degree of variation, and corrects the process

Off-Target Variation

On-Target

Center

Process

Reduce

Spread

XX

XX

XXX

XX

X

X

XX

X

X

X

XX

X

X

XXX

X

XXXX

X

XXXXX

XXX

Page 24: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Another View

Off-Target Large Variation

On-Target

Center

Process

Reduce

Spread

The statistical view of a

problem

USLLSL

LSL = Lower spec limit

USL = Upper spec limit

The Nature Of The Problem - A Statistical Look

LSL USL

LSL USL

Page 25: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Insufficient

Process

Capability

Unstable

Parts and

Material

Region of Six Sigma Synergy

Inadequate

Design

Margin USLT

LSL

Primary Sources of Variation

Page 26: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

What Makes Six Sigma Different?

Process

KPIV

KPIV

KPIV

KPOV CTQ

Manage “Correct”

(In-Spec.)Defect-

Free!

KPIV

1. Statistically Proven Relationships

Between Inputs and Outputs

2. Systematic

Control

Control

Control

Manage the INPUTS and good OUTPUTS will follow

KPIV-Key process input variables

KPOV- Key process output variables

Page 27: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

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

Harvesting the Fruit of Six Sigma

Sweet FruitDesign for Manufacturability

Bulk of FruitProcess Characterization

and Optimization

Low Hanging FruitSeven Basic Tools

Ground FruitLogic and Intuition

Process Entitlement

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

We don't know what we don't know

We can't act on what we don't know

We won't know until we search

We won't search for what we don't question

We don't question what we don't measure

Hence, We just don't know

Page 28: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

If Quality Leadership is to consist of… The Company must embrace…

Superior Quality of Conformance Six Sigma Process Control - DMAIC

Superior Quality of Design Design for Six Sigma

Availability Design for Reliability

The Many Facets of Six Sigma

Page 29: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

IRS - Tax Advice

(phone-in)

(140,000 PPM)

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)

(with ± 1.5 s shift)

Best-in-Class

AverageCompany

3 4 5 621

© 1994 Dr. Mikel J. Harry - V4.0

© 1994 Six Sigma Academy

Where does industry stand ?

Page 30: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

What It Is & What It Isn’t

It Will:

Reduce Defects

Reduce Variation

. . . from existing processes

Process Driven........ NOT Event Driven

It Won’t:

Create a New Marketing

Strategy

Run a Conference

Invent a New Product

Find a New Supplier

Hire a New Employee

DMAIC Problem Solving & Fixing Method

Page 31: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

• Who is my Customer ?

• What matters ? (CTQ-Critical to Quality) ?

• What’s the Scope ?

• What Defect am I trying to Reduce ?

• By how much (Realistic/Appropriate Goal) ?

• What’s the current Cost of defects (Poor Quality) ?

(What Benefits will we get by reducing defects ?)

Project Definition

Page 32: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

• What’s my Process ? How does it function ?

• Which Outputs affect CTQ’s most

• Which Inputs seem to affect Outputs (CTQ’s) most ?

• Is my ability to Measure/Detect “Good Enough?”

• How’s my process doing today ?

• How good could my (current) process be when everything

is running “smoothly”?

• What’s the best that my process was “Designed” to do ?

Measure

Page 33: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Define and Measure

Process

KPIV

KPIV

KPIVKPOV CTQ

Manage“Correct”

(In-Spec.)

Defect-

Free!

KPIV

Define: Clearly State the Problem

in terms of “Defects” or “Variation”

which Upset the Customer

Measure: Describe the Performance of

the Process Quantitatively

Measured Units

Counted Unitsthen,

Identify Key Inputs

KPIV-Key process input variables

KPOV- Key process output variables

Page 34: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

• Which Inputs actually (For Sure) affect my CTQ’s most ?

• By how much ?

• Do combinations of variables affect outputs?

• If I change an input, do I really change the output ?

• If I observe results (outputs) from the same process, different

locations, and results appear to be different..... are they really ?

• How many observations do I need to draw conclusions ?

• What level of confidence do I have regarding my conclusions ?

Analyze

Page 35: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Process

KPIVKPIV

KPIV KPOVCTQ

Manage “Correct”

(In-Spec.) Defect-

Free!

KPIV

Statistically Describe the Relationship Between

Inputs and the Output . . . to

Find the Inputs with the Biggest Impact on the Output

Analyze

Page 36: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Improve

Process

KPIV

KPIV

KPIV

KPOV CTQ

Manage “Correct”

(In-Spec.)Defect-

Free!

KPIV

High

Low

Medium

High

????????

Systematically Experimentwith the Inputs to Find the Combination

Which Delivers the Optimal Output

Page 37: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

• Once I’ve reduced the Defects, how do the

functional team and I keep them there ?

• How does the functional team keep it going (routinely) ?

• What do I set up to keep it going even when things

change ...... People, Technology, and Customers

Control

Page 38: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Control Control Control

ProcessKPIVKPIVKPIV

KPOV CTQ

Manage “Correct”

(In-Spec.)Defect-

Free!

KPIV

High

Low

Medium

High

Lock In the Inputs to Routinely Generate

the Optimal Output!

Control

Page 39: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Project Name: To decrease the exiting lead time of Kingsley range from Vestal by June’ 13Project Code: VM/01/14 Black Belt: Ratish MProject Lead: Shan Owner: Shan Sponsor: Dan Thomas

Business Case:

The existing lead time of 90 days for Kinsley range (against 45 days) is hitting CSI badly due to which CSI is unable to serve their customer on time. The accrued monetary losses to CSI on account of this is 0.4 Mn US$ per annum.

Problem Statement:

The low cost sourcing advantage is nullified by additional cost incurred by CSI with vestal because of high lead time.

Goal Statement:To reduce lead time of 90 days to 45 days by Jun‘13.

Annual Savings: 0.4 Million US$

Project Scope

Part lead time for Kingsley range only

Schedule: Team Members:Phase Start Date End Date Name FunctionDefine 28-Mar- 13 5-Apr-13 Shan Production

Shan Shan Dan ThomasMeasure 6-Apr-13 15-Apr-13 Pushpender QualityAnalyze 16-Apr-13 30-Apr13 Abhishek Supply Chain

Improve 1-May-10 10-Jun-13

Control 11-Jun-13 30-Jun-13Project Lead

Owner Sponsor

Typical Project Charter-Example

Page 40: Introduction to Six Sigma - Pinnacle Sourcing Introduction to Lean Six Sigma. What is Six Sigma? Six Sigma - The Initiative Process Systematic Approach to Reducing Defects which Affect

Thanks !!