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Introduction to Six Sigma

Topics (Session 1) Understanding Six Sigma History of Six Sigma Six Sigma Methodologies & Tools Roles & Responsibilities

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. business and its processes.

A disciplined, fact-based approach to managing a A means to promote greater awareness of customer

needs, performance measurement, and business improvement.

Whats in a name? Sigma is the Greek letter representing the standard

deviation of a population of data. Sigma is a measure

of variation (the data spread)

What does variation mean?20

Variation means that a

15

process does not produce the same result (the Y) every time. Some variation will exist in

10

5

0

-5

-10

all processes. Variation directly affects customer experiences.

Customers do not feel averages!

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?

How often are we delivering on time?Answer: Look at the variation!30 min. or less

s

Managing by the average doesnt tell the whole story. The 0 10 20 x 30 40 50

average and the variation together show whats happening.

Reduce Variation to Improve PerformanceHow many standard deviations can you fit within customer expectations?30 min. or less

s

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

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%

DPMO691,462 308,538 66,807 6,210 233 3.4

99.9997% 0.00034%

Examples of the Sigma ScaleIn a world at 3 sigma. . . There are 964 U.S. flight

In a world at 6 sigma. . . 1 U.S. flight is cancelled

cancellations per day. The police make 7 false

every 3 weeks. There are fewer than 4 false

arrests every 4 minutes. In MA, 5,390 newborns are

arrests per month. 1 newborn is dropped every 4

dropped each year. In one hour, 47,283

years in MA. It would take more than

international long distance calls are accidentally disconnected.

2 years to see the same number of dropped international calls.

Topics Understanding Six Sigma History of Six Sigma Six Sigma Methodologies & Tools Roles & Responsibilities How YOU can use Six Sigma

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.

1949: U. S. DOD issues Military Procedure MIL-P-1629, Procedures

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

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.

1995: Jack Welch launches Six Sigma at GE. 1994: Larry Bossidy launches Six Sigma at Allied Signal.

Six Sigma Companies

Six Sigma and Financial Services

Topics Understanding Six Sigma History of Six Sigma Six Sigma Methodologies & Tools Roles & Responsibilities

DMAIC The Improvement MethodologyDefineObjective: DEFINE the opportunity

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.

Key Define Tools: Cost of Poor Quality (COPQ) Voice of the Stakeholder (VOS) Project Charter As-Is Process Map(s) Primary Metric (Y)

Key Improve Key Control Tools: Tools: Solution Selection Control Charts Matrix Contingency To-Be Process and/or Action Map(s) Plan(s)

Define DMAIC ProjectWhat is the project?$

Project Charter

Cost of Poor Quality

Stakeholders

Voice of the Stakeholde r

Six Sigma 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

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

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 & Weight Fees together and write in top right box on package back

Circle Total Fee and Draw Arrow f rom total to sender code

Accounting

Take packages f rom A/R Clerk Outbox to Accounts Superv isorInbox. Take packages f rom Accounts Superv isor Outbox to OutSort Clerk Inbox.

Write Total Fee f rom package in appropriate Sender column on Accts. Supv .s log

Draw 5-point Star in upper right corner of package f ront

Sort packages in order of Sender Code bef ore placing in outbox

Finalizing

Take packages f rom Out-Sort Clerk Outbox to Out-Sort Superv isorInbox.

Add up Total # of Packages and Total Fees f rom log and create client inv oice

Observ e sender and receiv er codes and make entry in Out-Sort Superv isors log

Delivery

Deliv erPackages to customers according to N, S, E, W route

Submit log to General Manager at end of round

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

Define the Non Value Add steps

Define Customer RequirementsWhat are the CTQs? What motivates the customer?SECONDARY RESEARCHMarket Data

Voice of the Customer

Key Customer Issue

Critical to Quality

Listening Posts Industry Intel

Industry Benchmarking

Customer Service

Customer Correspondence

PRIMARY RESEARCHSurvey s

OTM Observations

Focus Groups

Measure Baselines and CapabilityWhat is our current level of performance?Descriptive Statistics

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

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

95% Confidence Interval for Mu

95% Confidence Interval for Mu 21.142319.5 20.5 21.5 22.5 23.5 24.5 25.5 26.5

25.1961

95% Confidence Interval for Sigma 8.9690 11.8667

95% Confidence Interval for Median 95% Confidence Interval for Median 19.7313 26.0572

Analyze Potential Root CausesWhat affects our process?Ishikawa Diagram (Fishbone)

Six Sigma

y = f (x1, x2, x3 . . . xn)

Analyze Validated Root CausesWhat are the key root causes?

Experimental Design

Data Stratification Process Simulatio n

Regression Analysis

Six Sigma

y = f (x1, x2, x3 . . . xn)Critical Xs

Improve Potential SolutionsHow can we address the root causes we identified? Address the causes, not the symptoms.

Generate

Evaluate

Clarify

Decision

y = f (x1, x2, x3 . . . xn)Critical Xs

Divergent | Convergent

Improve Solution SelectionHow do we choose the best solution?Solution Selection MatrixQualit ySolution Sigma Time CBA Other Score

Time

Cost

Six SigmaSolution Right Wrong Implementation Good Bad

Nice Idea

Nice Try

X

Solution Implementatio n Plan

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

Process Control System (Business Process Framework)Process Owner: Process Description: Direct Process Customer: CCR: Date:

Individual Value

25

Mean=24.35

FlowchartCustomer Sales Proce

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