Upload
duongkhanh
View
212
Download
0
Embed Size (px)
Citation preview
Overview of Six Sigma
Brian Kocher, CPAVP - Controller & Chief Accounting Officer
Chiquita Brands International
November 9th, 2006
2
What are we Learning today?
Six Sigma Overview
Six Sigma ToolsVOC
SIPOC
Common Quality Myths
Questions
Agenda
3
What is Six Sigma?A VisionA Philosophy An Aggressive goal A Metric (standard of measurement)A BenchmarkA Methodology
Six Sigma
A vehicle for aligning Operations, Metrics and Processes that is Customer Focused, Fact Based, and Data Driven!
ALL of the ABOVE
4
Why Six Sigma?History
Motorola created in early 1990’sAlliedSignal, GE successes in mid 90’s Business processesEncouraged others to utilize 6σ to improve business performance
Six Sigma
–“2,400 process improvements were made, reducing defects by 61 percent - yielding $350 million in annualized cost savings.”
Larry Bossidy, Former Chairman and CEO, AlliedSignal
–“Six Sigma will be the biggest, the most personally rewarding and, in the end, the most profitable undertaking in our history.”
Jack Welch, Former Chairman and CEO, GE
The Six Sigma methodology provides an overall strategy and methodology for improving organizational performance.
5
The most significant characteristic of Six Sigma is the thorough and unending focus on
understanding our Customer.
What does my Customer need from Chiquita’s process?
What can we do
better?
How does my Customer view
my process?
How does my Customer measure my
process?
From the Customer perspective, how is our process performance?
How does my Customer want our process to
perform?
Critical to SatisfactionCTS
Six Sigma
6
COPQ Benefits are Categorized as Hard Dollar or Soft Dollar
Hard $ BenefitIncreased Production volumeIncreased Sales or RevenueBalance Sheet growthCustomer RetentionReduction in FTEReduction in transaction costReduction in overhead cost
Soft $ BenefitIncreased Customer satisfactionAvoidance of FTE reductionFractional reduction of FTE HoursAvoidance of Capacity enhancementsConformation of regulation changesIncreased Employee satisfaction
Hard $ Benefits have an observable / quantifiable impact on the Financial
Statements.
Hard $ Benefits have an observable / quantifiable impact on the Financial
Statements.
Six Sigma
7
What is Six Sigma?Statistically
The Six Sigma Goal Represents 3.4 DPMO
FunctionallySix Sigma is a management system that profitably improves customer satisfaction.Proper business wide deployment creates a cultural and managerial transformation that delivers increasing financial returns to the business.
Six Sigma
Provides a common problem solving approach and language that is data driven and establishes the truth as
to what affects your business
Provides a common problem solving approach and language that is data driven and establishes the truth as
to what affects your business
2 308,5373 66,8074 6,2105 2336 3.4
σ DPMOProcess Capability
Defects Per Million Opportunities
8
Our Outputs (Y’s) are determined by our Inputs (X’s). If we know enough about our X’s we can accurately predict Y without having to measure it
If we don’t know much about our X’s, then we have to resort to inspection and test (non value added operations)
By knowing which X’s are Critical to the Y, we can reduce the variability in Y
)X,...,X,X,X ( f=Y k321
Six Sigma
How is Six Sigma applied?How does it work?
ProcessInputX Y
OutputX
X X1
2 k
3
9
Time
Perf
orm
ance
Bad
GoodImproved Sigma
Six SigmaImprovementSix Sigma
Improvement
Six Sigma
Measurable Results?
Typical Sigma
The Goal is to improve the Sigma level on metrics that tie to the business’s Bottom line.
Breakthrough Improvement
10
Six Sigma
Analyze
Measure
Improve
Control
Define
Tools UsedPhase Steps
SPC; Capability analysis; SOP’s; Descriptive statistics; Audits; FMEA; DPMO; Scorecards; Control charts; Training
Documents, monitors and assigns accountability for sustaining gains made in the Improve stage
Implement process controls
DOE; Regression; ANOVA; 5S’s; Process capability; Cost/benefit analysis; T/B process maps; MSA; Control charts; Simulation
Determine variable relationshipsGenerate and test possible solutionsSelect best solution to address vital X’sImplement chosen solution
Regression; Correlation; FMEA; Multi-varianalysis; hypothesis testing; statistical testing; ANOVA; DOE; NVAA; VS Mapping; PICK
Prioritize list of vital X’s by analyzing data & process
Correlation and regression to determine relationships and root cause
Control charts; Checksheets; MSA; Histogram; Pareto; Process map; Sigma level; Run chart; DPMO; FMEA; KPIV; Capability analysis
Identify project Y and performance standardCollect data on Y and related measuresDetermine baseline performanceSet the improvement goal
Charter; CTQ tree; QFD; Customer surveys; SIPOC; C&E diagram; Fishbone; Kano analysis; Gantt chart; Gap analysis; Cost/benefit
Define the customer CTQ’sForm team and develop team charterMap the as-is process
DMAIC seeks to translate business problems into practical business solutions through the use of data and statistical tools.
11
Optimized Process
1 Y
10-20 X’s
4-8 Critical X’s
4-8 Critical X’s
4-5 Y’sDefine Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase
Six Sigma
How is Six Sigma applied?Project Phase Strategy
12
xx
x
xx
xxx
x
xxxxxxx xx
Large Variation
xxx
x
xx
xxx
xx
xx x
On Target
Goal: Center Process Goal: Reduce Spread
USLLSL
LSL USL
LSL USL
Off - Target
LSL = Lower Specification Limit (minimum customer requirement) USL = Upper Specification Limit (maximum customer requirement)
Smaller Std. Dev.Shift the Mean
Six Sigma
13
Why Six Sigma?Companies implementing
Six Sigma
• Textron• Tyco• Lear Corp.• Cintas• Visteon• Anthem Blue Cross-Blue Shield• CIGNA• United Health Care• Charleston Medical Center• Good Samaritan Hospital, Kearny, NE• Mt. Carmel Health Systems, OH• Park Nicolette, Minneapolis• Suncorp-Metway• NCR• Bank of America• Provident Bank• BankOne• Merrill Lynch
• Motorola• Texas Instruments • ABB (Asea Brown Boveri LTD.) • AlliedSignal • GE• Bombardier• Nokia• Toshiba• DuPont• Ford• Dow Chemical• Johnson & Johnson• Chiquita• Noranda• Johnson Controls• JP Morgan Chase• Sun Trust• American Express
Health care
Government
Academic
Non-profit
Manufacturing
Financial institutions
Six Sigma has been implemented in small to mid-size companies, as well as larger ones.
Six Sigma has been implemented in small to mid-size companies, as well as larger ones.
Voice of the Customer
15
What is the VOC?
Voice of the Customer is the sum total of the needs expressed by allcustomer groups.
Confirming the VOC is a critical step in a successful project.
Lean Six Sigma is all about meeting or exceeding customer needs or CTSs
QualityCostDelivery
Many projects fail because the VOC is not correctly captured or confirmed.
16
VOC - Steps
Steps to conducting a VOC process.
1. Define the purpose for the VOC
2. Confirm the customers and their voices
3. Confirm the customer requirements
4. Rank the customer requirements
5. Quantify Customer requirements
6. Prioritize project activities
17
VOC – Step 1
Define the purpose for the VOC
Confirm the problem to be solvedCreate a statement of purpose
Do not imply a solutionDefine what you want to understand from the CustomersDefine the benefit for collecting the VOC
Examples:
To discover how customers use our support services in order to eliminate unused features or add new ones.To understand our reporting needs in order to improve our current reporting database.
What is would be an example of your VOC purpose statement for your business?
18
VOC – Step 2
Confirm the Customers and their Voices
The boundary between internal and external customers depends on the boundaries/scope of your project.
Customer Relation
Customer Type and
Internal External Direct Indirector or
Customers that receive your product or
service directly from you.
Regulatory and policy
setting agencies that
speak on behalf of the customer.
Customers within
Chiquita.
Secondary
Customers that receive your product in its
original or modified form
through another party.
or
Customers outside
Chiquita.
19
VOC – Step 3
Confirm the Customer Requirements
Types of Customer Requirements
Basic: Unspoken, but expectedPerformance: Spoken by the CustomerExcitement: Pleasant Surprises that are generally unspoken or difficult to verbalize
What are your customers’ basic, performance or excitement needs?
Degree ofAchievement
Customer Dissatisfaction
Basic
Performance
Excitement
KANO Model
20
Team Exercise – VOC
Purpose:Purpose: Practice identifying your customer requirements for your Spring Break Trip.
Agenda:Agenda: Identify the different Customer Requirements and then use the KanoModel to categorize them.
Limit:Limit: Exercise: 10 minutesDiscussion: 5 minutesTotal: 15 minutes
Break into TeamsBreak into Teams
21
BASICUnspoken, but expected
ExcitementPleasant Surprises that are generally
unspoken or difficult to verbalize
PerformanceSpoken by the Customer
Customer RequirementsSpring Break Trip
What are your Requirements?
22
VOC Summary
Voice of the Customer (VOC) will enable you to focus on what your customers value most.
Identify your customers.
Define the value your customers want - CTSs.
Identify critical attributes that contribute to that value.
Make sure internal processes are designed to provide that value.
Analyze how process outcomes contribute to customer satisfaction.
VOC = Customer Satisfaction!VOC = Customer Satisfaction!
Process
24
• A process is a group of steps, tasks, or activities that has a beginning and an end.
• A process takes inputs—materials, information, people, etc.—and in some way changes them to produce an output.
• Simplistically, it can be seen as:
OutputInput Activity
What is a Process?
25
Making coffee Brushing your teeth Traveling to your jobRepairing or maintaining a productBilling Preparing an annual report Making a sales call
Going on Spring Break
Distributing mail Answering telephones Communicating Coaching or teachingBudgeting Entering ordersPreparing a sales presentation
Every organization has hundreds, if not thousands, of work processes. To understand the organization, you must understand its processes.
Process Examples
Before you can change a process, you need to understand how it works!Before you can change a process, you need to understand how it works!
26
At Least Three Versions Exist
How it should beHow it really is
A Process Map will provide clarity!
How we think it is
View of the Process
27
SIPOC High-Level Process Map
Stay as high as you can for as long as you can!
A SIPOC allows you to gain a high-level understanding of a process. A SIPOC allows you to gain a high-level understanding of a process.
Start Stop
Voice of Customer(Quality, Cost, Delivery)
Voice of Process(Defects, Expenses, Cycle Time)
S I P O C
RequirementsRequirements
YX’sSupplier CustomersOutputsProcessInputs
X’s X’s
28
Step 2
Step 1
Step 5
Step 4
Step 3
Determine the boundaries (start and stop) of the process Identify the Customers List the primary customers who receive outputs.
Identify the Outputs of the Process List the major Outputs of the process. Map out the Process Map the four or five steps that describe a process at a very high level. Identify the Inputs List the major Inputs to the process. Identify the Suppliers List the Suppliers who provide inputs to the process.
SIPOC Summary
PProcess
IInputs
SSuppliers
OOutputs
CCustomer
29
Team Exercise – SIPOC
Purpose: Practice creating a SIPOC for Spring Break
Agenda: 1. Break into groups and create a SIPOC for your process
2. Use your provided template to create your SIPOC
3. Report your results to the group.
Limit: Exercise: 15 minutesDiscussion: 10 minutesTotal: 25 minutes
Break into TeamsBreak into Teams
30
Supplier Inputs Process Outputs Customer
Start
Stop
Hotel Plans
Spring Break
Travel Plans
Spring Break calendar
Financial Needs
Return to School
Team Exercise –SIPOC
31
What is the right level of detail?
hGeneral ActivitiesTake orders, prepare pizza, bake pizza, deliver pizza
hSpecific ComponentsAnswer phone; listen and write order; capture customer delivery information; confirm delivery time and thank customer; give order to cook
Process Map
Macro
Micro
Manager’s viewpoint
Worker’sviewpoint
Y B -1 v 1 .15 /3 P ro p rie t a ry – In te r n a l U s e O n ly 2 5
L S S – Y e l lo w B e lt M o d u le 1
M a k e &B a k e
D e liv e r
T a k e O r d e r
C a l l in O r d e r
G ro u p E x e rc is e – T h e P iz z a P la c e
S u p p li e r In p u ts P r o c e s s O u tp u ts C u s to m e r
R e q u ire m e n ts R e q u ir e m e n t s
• C u s to m e r In fo ( A c c u ra t e )
• C u s to m e r O rd e r ( A c c u ra t e )
• In g r e d ie n t s ( F re s h , D e liv e re d o n T im e )
• O v e n (C o rre c t T e m p e r a tu re )
• C u s to m e r
• P iz z a In g re d ie n t C o m p a n y
• P iz z a ( H o t, C o rr e c t, Q u ic k )
• C u s to m e r
The Pizza Place Functional Process Map
Cas
hier
Coo
ksD
eliv
ery
Man
Cus
tom
er
Hungry! Call in Order
Take Order
Make Pizza Bake Pizza Correct?
Deliver Pizza
Pay Driver
YesNo
The Pizza Parlor - Functional Process Map for the Pizza Maker
Pizz
a M
aker
Cas
hier
Read CustomerOrder Yes
Go to walk-incooler to getingredients
No
YesAdd ingredients Bake PizzaSpread sauceToss and rolldough Accurate?All ingredients
available?
Provide Order toCook
Macro
Micro
In reality, several types of process maps exist. These two versions are the most useful.
SIPOC
FunctionalProcess
Map
How low should you go?
Common Quality Myths
33
50°
Busted: Customers feel
variation, not averages!
This room is freezing!
I’m roasting in here!
90°
Myth: Averages Are Misleading
The average temperature is 70 °. Everyone must be
fine!
34
Myth: Inspection
Six Sigma Black Belts are assigned to Six Sigma projects. These projects are solved by identifying, measuring, analyzing, improving, and finally controlling the measure of interest. Six Sigma Champions help stomp out barriers to ensure success. Ad hoc teams lend their process and product skills. As the defect levels fall, so does the associated cost of poor quality. Six Sigma projects deliver measurable business results. The Black Belt resource ensures program success.
Purpose: To illustrate that inspection is not only Non-Value Added but also an ineffective means to achieve quality.
Exercise: You have 60 seconds to count the letter “S” in the paragraph below. Document your answer on a scrap note.
Answer: _______________Busted: You can not
Inspect quality in!
35
Myth: Customer’s Viewpoint
11 weeks 12 weeks
Production ShipmentLead
-Tim
e
Customer Lead Time
Delivery
Busted: How we measure time is not always
how the Customer measures time!
2 weeks
Order
Order
Business Lead Time
36
Overview of Six Sigma
Benefits of Six Sigma:Reduce variation in our processes/productsReduce defects Increase first time yieldsReduce the costs of poor quality (COPQ)Eliminate waste and improve FlowImprove Growth and profitabilityImprove capacityProvide scalabilityReduce costsDifferentiate ourselves from our competitorsImprove employee morale and prideEtc., etc., etc.
Improve Customer Satisfaction!!
37
What did we learn today?
Customer Centric
Six Sigma Tools
Quality Myths
Wrap Up
Questions