PPT - Six Sigma Introduction

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<p>Introduction to Six Sigma</p> <p>Topics (Session 1) Understanding Six Sigma History of Six Sigma Six Sigma Methodologies &amp; Tools Roles &amp; Responsibilities</p> <p>Six Sigma is. . . A performance goal, representing 3.4 defects for</p> <p>every million opportunities to make one.</p> <p> A series of tools and methods used to improve or</p> <p>design products, processes, and/or services.</p> <p> A statistical measure indicating the number of</p> <p>standard deviations within customer expectations. business and its processes.</p> <p> A disciplined, fact-based approach to managing a A means to promote greater awareness of customer</p> <p>needs, performance measurement, and business improvement.</p> <p>Whats in a name? Sigma is the Greek letter representing the standard</p> <p>deviation of a population of data. Sigma is a measure</p> <p>of variation (the data spread)</p> <p>What does variation mean?20</p> <p> Variation means that a</p> <p>15</p> <p>process does not produce the same result (the Y) every time. Some variation will exist in</p> <p>10</p> <p>5</p> <p>0</p> <p>-5</p> <p>-10</p> <p>all processes. Variation directly affects customer experiences.</p> <p>Customers do not feel averages!</p> <p>Measuring Process PerformanceThe pizza delivery example. . . Customers want their pizza</p> <p>delivered fast!Guarantee = 30 minutes or less</p> <p> What if we measured performance and found</p> <p>an average delivery time of 23.5 minutes? On-time performance is great, right? Our customers must be happy with us, right?</p> <p>How often are we delivering on time?Answer: Look at the variation!30 min. or less</p> <p>s</p> <p> Managing by the average doesnt tell the whole story. The 0 10 20 x 30 40 50</p> <p>average and the variation together show whats happening.</p> <p>Reduce Variation to Improve PerformanceHow many standard deviations can you fit within customer expectations?30 min. or less</p> <p>s</p> <p>x 30 40 50 Sigma level measures how often we meet (or fail to meet) the requirement(s) of our customer(s).0 10 20</p> <p>Managing Up the Sigma ScaleSigma 1 2 3 4 5 6 % Good % Bad30.9% 69.1% 93.3% 99.38% 99.977% 69.1% 30.9% 6.7% 0.62% 0.023%</p> <p>DPMO691,462 308,538 66,807 6,210 233 3.4</p> <p>99.9997% 0.00034%</p> <p>Examples of the Sigma ScaleIn a world at 3 sigma. . . There are 964 U.S. flight</p> <p>In a world at 6 sigma. . . 1 U.S. flight is cancelled</p> <p>cancellations per day. The police make 7 false</p> <p>every 3 weeks. There are fewer than 4 false</p> <p>arrests every 4 minutes. In MA, 5,390 newborns are</p> <p>arrests per month. 1 newborn is dropped every 4</p> <p>dropped each year. In one hour, 47,283</p> <p>years in MA. It would take more than</p> <p>international long distance calls are accidentally disconnected.</p> <p>2 years to see the same number of dropped international calls.</p> <p>Topics Understanding Six Sigma History of Six Sigma Six Sigma Methodologies &amp; Tools Roles &amp; Responsibilities How YOU can use Six Sigma</p> <p>The Six Sigma Evolutionary Timeline1818: Gauss uses the normal curve to explore the mathematics of error analysis for measurement, probability analysis, and hypothesis testing. 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 dEconomie Politique. 1924: Walter A. Shewhart introduces the control chart and the distinction of special vs. common cause variation as contributors to process problems.</p> <p>1949: U. S. DOD issues Military Procedure MIL-P-1629, Procedures</p> <p>for Performing a Failure Mode Effects and Criticality Analysis.1941: Alex Osborn, head of BBDO Advertising, fathers a widely-adopted set of rules for brainstorming. 1986: Bill Smith, a senior engineer and scientist introduces the concept of Six Sigma at Motorola</p> <p>1960: Kaoru Ishikawa introduces his now famous cause-and-effect diagram. 1970s: Dr. Noriaki Kano introduces his two-dimensional quality model and the three types of quality.</p> <p>1995: Jack Welch launches Six Sigma at GE. 1994: Larry Bossidy launches Six Sigma at Allied Signal.</p> <p>Six Sigma Companies</p> <p>Six Sigma and Financial Services</p> <p>Topics Understanding Six Sigma History of Six Sigma Six Sigma Methodologies &amp; Tools Roles &amp; Responsibilities</p> <p>DMAIC The Improvement MethodologyDefineObjective: DEFINE the opportunity</p> <p>Measure Analyze Improve ControlObjective: Objective: Objective: MEASURE current ANALYZE the root IMPROVE the performance causes of problems process to eliminate root causes Key Measure Tools: Critical to Quality Requirements (CTQs) Sample Plan Capability Analysis Failure Modes and Effect Analysis (FMEA) Key Analyze Tools: Histograms, Boxplots, MultiVari Charts, etc. Hypothesis Tests Regression Analysis Objective: CONTROL the process to sustain the gains.</p> <p>Key Define Tools: Cost of Poor Quality (COPQ) Voice of the Stakeholder (VOS) Project Charter As-Is Process Map(s) Primary Metric (Y)</p> <p>Key Improve Key Control Tools: Tools: Solution Selection Control Charts Matrix Contingency To-Be Process and/or Action Map(s) Plan(s)</p> <p>Define DMAIC ProjectWhat is the project?$</p> <p>Project Charter</p> <p>Cost of Poor Quality</p> <p>Stakeholders</p> <p>Voice of the Stakeholde r</p> <p>Six Sigma What is the problem? The problem is the Output (a</p> <p>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</p> <p>Define As-Is ProcessHow does our existing process work?Move-It! Courier Package Handling ProcessCourier Mail Clerk In-SortClerk In-SortSupervisor DistanceFeeClerk WeightFeeClerk Accounts ReceivableClerk Accounts Supervisor Out-SortClerk Out-SortSupervisorObserv e package weight (1 or 2) on back of package</p> <p>Look up appropriate Weight Fee and write in top middle box on package back Take packages f rom Weight Fee Clerk Outbox to A/R Clerk Inbox. Add Distance &amp; Weight Fees together and write in top right box on package back</p> <p>Circle Total Fee and Draw Arrow f rom total to sender code</p> <p>Accounting</p> <p>Take packages f rom A/R Clerk Outbox to Accounts Superv isorInbox. Take packages f rom Accounts Superv isor Outbox to OutSort Clerk Inbox.</p> <p>Write Total Fee f rom package in appropriate Sender column on Accts. Supv .s log</p> <p>Draw 5-point Star in upper right corner of package f ront</p> <p>Sort packages in order of Sender Code bef ore placing in outbox</p> <p>Finalizing</p> <p>Take packages f rom Out-Sort Clerk Outbox to Out-Sort Superv isorInbox.</p> <p>Add up Total # of Packages and Total Fees f rom log and create client inv oice</p> <p>Observ e sender and receiv er codes and make entry in Out-Sort Superv isors log</p> <p>Delivery</p> <p>Deliv erPackages to customers according to N, S, E, W route</p> <p>Submit log to General Manager at end of round</p> <p>Does EVERYONE agree how the current process works?Deliv er inv oiceto client Submit log to General Manager at conclusion of round. Submit log to General Manager at end of round</p> <p>Define the Non Value Add steps</p> <p>Define Customer RequirementsWhat are the CTQs? What motivates the customer?SECONDARY RESEARCHMarket Data</p> <p>Voice of the Customer</p> <p>Key Customer Issue</p> <p>Critical to Quality</p> <p>Listening Posts Industry Intel</p> <p>Industry Benchmarking</p> <p>Customer Service</p> <p>Customer Correspondence</p> <p>PRIMARY RESEARCHSurvey s</p> <p>OTM Observations</p> <p>Focus Groups</p> <p>Measure Baselines and CapabilityWhat is our current level of performance?Descriptive Statistics</p> <p>Sample some data / not all dataCurrent Process actuals measured against the Customer expectation What is the chance that we will succeed at this level every time?0 10 20 30 40 50</p> <p>Variable: 2003 OutputAnderson-Darling Normality Test A-Squared: P-Value: Mean StDev Variance Skewness Kurtosis N Minimum 1st Quartile Median 3rd Quartile Maximum 0.211 0.854 23.1692 10.2152 104.349 0.238483 0.240771 100 0.2156 16.4134 23.1475 29.6100 55.2907</p> <p>95% Confidence Interval for Mu</p> <p>95% Confidence Interval for Mu 21.142319.5 20.5 21.5 22.5 23.5 24.5 25.5 26.5</p> <p>25.1961</p> <p>95% Confidence Interval for Sigma 8.9690 11.8667</p> <p>95% Confidence Interval for Median 95% Confidence Interval for Median 19.7313 26.0572</p> <p>Analyze Potential Root CausesWhat affects our process?Ishikawa Diagram (Fishbone)</p> <p>Six Sigma</p> <p>y = f (x1, x2, x3 . . . xn)</p> <p>Analyze Validated Root CausesWhat are the key root causes?</p> <p>Experimental Design</p> <p>Data Stratification Process Simulatio n</p> <p>Regression Analysis</p> <p>Six Sigma</p> <p>y = f (x1, x2, x3 . . . xn)Critical Xs</p> <p>Improve Potential SolutionsHow can we address the root causes we identified? Address the causes, not the symptoms.</p> <p>Generate</p> <p>Evaluate</p> <p>Clarify</p> <p>Decision</p> <p>y = f (x1, x2, x3 . . . xn)Critical Xs</p> <p>Divergent | Convergent</p> <p>Improve Solution SelectionHow do we choose the best solution?Solution Selection MatrixQualit ySolution Sigma Time CBA Other Score</p> <p>Time</p> <p>Cost</p> <p>Six SigmaSolution Right Wrong Implementation Good Bad</p> <p>Nice Idea</p> <p>Nice Try</p> <p>X</p> <p>Solution Implementatio n Plan</p> <p>Control Sustainable BenefitsHow do we hold the gains of our new process? 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 exceptions35 UCL=33.48</p> <p>Process Control System (Business Process Framework)Process Owner: Process Description: Direct Process Customer: CCR: Date:</p> <p>Individual Value</p> <p>25</p> <p>Mean=24.35</p> <p>FlowchartCustomer Sales Processing Branch Manager Loan Service Manager</p> <p>Measuring and Monitoring Key Measure mentsP1 - activity duration, min.</p> <p>Specs &amp;/or Targets</p> <p>Measures (Tools) Responsibility Contingency Where &amp; (Who) (Quick Fix) Frequency</p> <p>Remarks</p> <p>Apply for loan</p> <p>1.1 Application &amp; Review</p> <p>Review appliation for completeness</p> <p>15P2 - # of incomplete loan applications</p> <p>LCL=15.21 0 10 20 30</p> <p>Complete meeting information</p> <p>No</p> <p>Application Complete?</p> <p>Observation Number</p> <p>1.5 Disclosure</p> <p>1.4 Review</p> <p>1.3 Credit review</p> <p>1.2 Processing</p> <p>DFSS The Design MethodologyDesign for Six Sigma</p> <p>Define</p> <p>Measure Analyze Develop</p> <p>Verify</p> <p> 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 baselining</p> <p>Topics Understanding Six Sigma History of Six Sigma Six Sigma Methodologies &amp; Tools Roles &amp; Responsibilities How YOU can use Six Sigma</p> <p>Champions Promote awareness and execution of Six</p> <p>Sigma within lines of business and/or functions Identify potential Six Sigma projects to be</p> <p>executed by Black Belts and Green Belts Identify, select, and support Black Belt and</p> <p>Green Belt candidates Participate in 2-3 days of workshop training</p> <p>Black Belts Use Six Sigma methodologies and advanced</p> <p>tools (to execute business improvement projects Are dedicated full-time (100%) to Six Sigma Serve as Six Sigma knowledge leaders within</p> <p>Business Unit(s) Undergo 5 weeks of training over 5-10 months</p> <p>Green Belts Use Six Sigma DMAIC methodology and</p> <p>basic tools to execute improvements within their existing job function(s) May lead smaller improvement projects within</p> <p>Business Unit(s) Bring knowledge of Six Sigma concepts &amp;</p> <p>tools to their respective job function(s) Undergo 8-11 days of training over 3-6</p> <p>months</p> <p>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</p> <p>9-33</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Run Chart</p> <p>Can be used to identify when equipment or processes are not behaving according to specifications</p> <p>Diameter</p> <p>0.58 0.56 0.54 0.52 0.5 0.48 0.46 0.44 1 2 3 4 5 6 7 8 9 10 11 12</p> <p>Time (Hours)</p> <p>9-34</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Pareto Analysis</p> <p>Can be used to find when 80% of the problems may be attributed to 20% of the causes</p> <p>80%</p> <p>FrequencyDesign</p> <p>Assy. Instruct.</p> <p>Purch.</p> <p>Training</p> <p>9-35</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Checksheet</p> <p>MondayBilling Errors Wrong Account Wrong Amount A/R Errors</p> <p>Can be used to keep track of defects or used to make sure people collect data in a correct manner</p> <p>Wrong Account Wrong Amount</p> <p>9-36</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Histogram</p> <p>Number of Lots</p> <p>Can be used to identify the frequency of quality defect occurrence and display quality performance</p> <p>0</p> <p>1</p> <p>2</p> <p>3</p> <p>4</p> <p>Data Ranges</p> <p>Defects in lot</p> <p>9-37</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Cause &amp; Effect Diagram</p> <p>Possible causes:</p> <p>Machine</p> <p>Man</p> <p>The results or effect</p> <p>EnvironmentMethod Material</p> <p>Effect</p> <p>Can be used to systematically track backwards to find a possible cause of a quality problem (or effect)</p> <p>9-38</p> <p>Analytical Tools for Six Sigma and Continuous Improvement: Control Charts</p> <p>Can be used to monitor ongoing production process quality and quality conformance to stated standards of quality</p> <p>1020 1010 1000 990 980 970 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15</p> <p>UCL</p> <p>LCL</p> <p>Some Japanese Terms Gemba Manufacturing floor</p> <p> Muda Waste; Non-value added activity Poka-Yoke - Fool proof device are often small jigs</p> <p>or very simple devices set up to avoid or detect errors Kaizen Improvements done to attain 6</p> <p>THANK YOU</p>