Six Sigma Basics

Six Sigma

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•Sigma is a letter in the Greek alphabets•The term “Sigma” is used to denote distribution or spread around the mean (average) of any process or procedure•For a business or manufacturing process, the sigma value is a metric that denotes how well the process is performing•The higher the sigma value the better. The sigma value measures the capability of the process to deliver defect free output•A defect is anything that results in customer dissatisfaction•With “Six Sigma” the common measurement index is defects per unit where a unit could be anything--a component, piece of material, time frame, distance etc.•The higher the sigma value, the less likely a process will produce defects.•As sigma value goes up, customer satisfaction naturally goes up.

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What is Sigma?

• Sigma is a statistical measure (Standard Deviation) denoting level of defects in a process/parameter

• It is a means to denote variation in a process

• Examples of Control limits and Std Dev.

Day Process 1 Process 21 49.4 43.82 47.7 51.23 49.2 47.64 49.1 46.65 49.9 57.06 48.6 53.37 47.9 59.68 53.2 46.89 48.9 55.410 48.1 40.311 51.0 60.212 50.1 46.213 54.3 54.714 49.4 51.115 52.2 57.516 45.5 54.117 56.8 53.618 55.1 49.019 48.2 55.620 50.2 45.0

Process 1

35

38

41

44

47

50

53

56

59

62

65

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Days

Spec

s

Process 2

35

38

41

44

47

50

53

56

59

62

65

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49Days

Spec

s

Customer requires Target value50 and range from 40 to 60.Which process has the capabilityto meet customer requirements?

Process 1 : Mean is 49.8Std Deviation is 2.53, Ranging from 56.8 to 42.8

Process 2 : mean is 49.8Std Deviation is 4.39, Ranging from 60.2 to 38.9

Time Series Chart

6065707580859095

100105110115120125130135

1 5 9

13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97

No of Days

Spec

s

From To Counts71 75 176 80 281 85 386 90 1091 95 1296 100 22

101 105 20106 110 17111 115 8116 120 3121 125 2

Y

Freq

uenc

y

1301201101009080

25

20

15

10

5

0

Mean 99.67StDev 10.02N 100

Histogram of YNormal

0.13%

34.13% 34.13%

13.06% 13.06%2.14%2.14% 0.13%

Mean-3σ +1σ-1σ +2σ-2σ +3σ

68.26%

95.46%

99.73%

Measurement:Measurement: Variance is the Enemy Variance is the Enemy

In the chart below, 64.6% of the measures are between the In the chart below, 64.6% of the measures are between the upper and lower limitsupper and lower limits

This is a 1This is a 1 process process Reducing the variations in the process will bring a higher Reducing the variations in the process will bring a higher

percentage within the acceptable limitspercentage within the acceptable limits

Mean (μ) +1σ-1σ-2σ +2σ-3σ +3σ

34.13 %34.13 %

13.06 % 2.14 %

13.06 % 2.14 %

0.13 % 0.13 %

LowerLimit

UpperLimit

Measurement:Measurement: Variance is the Enemy Variance is the Enemy

Time IntervalsTime Intervals Time IntervalsTime Intervals

Mean

Mean

W I D E VariationW I D E Variation Slim VariationSlim Variation

Time (Min.).Time (Min.).

Target

Target

CustomerUpper Limit

CustomerUpper Limit

DEFECTS

ZERODEFECTS

Time (Min.).Time (Min.).

Control Chart

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL

Sample number

Mean

Out ofcontrol

Normal variationdue to chance

Abnormal variationdue to assignable sources

Abnormal variationdue to assignable sources

Tracking ImprovementsUCL

LCL

LCLLCL

UCLUCL

Process not centeredand not stable

Process centeredand stable

Additional improvementsmade to the process

Different Shapes of Distributions

Establishing the Focus

Quality

It is the performance to the standard as expected by a customer

Customer

Anyone internal or external to the organisation who comes in contact with my work, product or service

Anyone whose satisfaction depends on my output and actions

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Process CapabilityProcess Capability StandardsStandards Defects per Defects per mm oppnmm oppn..Sigma levelSigma level

3 3 HistoricalHistorical 66,80766,807

Current bestCurrent best 6,210 6,210

New with 6New with 6

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What is Six Sigma?Not only a statistical tool but, • An attitude which continuously and relentlessly

strives to achieve an almost zero defect level in any process.

• It is this attitude which gives maximum results in the longer run.

• It also makes the organisation robust

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Why Six Sigma?• A structured tool/methodology to reduce and

thereafter control defects in any process• Reducing defects translates to

– Better understanding of customer requirements– Better customer satisfaction– Increased customer loyalty– Increased revenues– Reduction in costs

Y=f ( X, X1………Xn)

Y•Dependent•Output•Effect•Symptom•Monitor

X•Independent•Input/Process•Cause•Problem•Control

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Capability=f(Variation)

The Chain of Causation•Our survival is dependent on growing the businessOur survival is dependent on growing the business•Our business growth will depend on customer Our business growth will depend on customer satisfactionsatisfaction•Customer satisfaction is governed by quality, price Customer satisfaction is governed by quality, price and deliveryand delivery•Quality, price and delivery are controlled by Quality, price and delivery are controlled by process capabilityprocess capability•Process capability is greatly limited by variationProcess capability is greatly limited by variation•Process variation leads to increase in defects, cost Process variation leads to increase in defects, cost and cycle timeand cycle time•To eliminate variation we must apply the right To eliminate variation we must apply the right knowledgeknowledge•In order to apply the right knowledge, we must In order to apply the right knowledge, we must first acquire itfirst acquire it..

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Defect Reduction

Yield Improvement

Customer Satisfaction

$

The Role of Measurement•If we cannot express what we know in the form of numbers then we do not know much about it•If we do not know much about it then we cannot control it•If we cannot control it then we are at the mercy of chance

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BreakthrouBreakthrough Strategygh Strategy

OptimisationOptimisation

CharacterisatCharacterisationion

( Identificatio( Identification of Project ) n of Project )

ControlControl

ImproveImprove

AnalyseAnalyse

MeasureMeasure

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1 1 Select CTQ Characteristic 2 Define Performance Standards3 Validate Measurement System4 Establish Product Capability5 Define Performance Objectives6 Identify Variation Sources7 Screen Potential Causes8 Discover Variable Relationships9 Establish Operating Tolerances10 Validate Measurement System11 Determine Process Capability12 Establish Controls

Measure NCapabilityOK? Analyse Improve ControlY

Y

Y

N

N

ModifyDesign?

CapabilityOK?

Redesign

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How is “Six Sigma” implemented in an organisation?

• Total commitment and trust from the management is a key to success

• Champions for critical business areas• Dedicated “Black Belts” for each project• Process Owners to define a project and it’s

charter

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How is “Six Sigma” implemented in an organisation? (Continued)

Business Area examples,• Manufacturing

– Production, Maintenance, Electrical systems etc.• Research & Development, Market/Sell• Finance, HR, Working Capital Mgmt

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Champions are essentially the leaders from business areas who possess thorough knowledge of the processes. They are responsible for,

• Defining and then prioritising the projects and preparing Project Charters

• Tracking Project progress• Reporting to the top management on the status and progress of the

projects

They also act as counselors to the Black Belts

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Black Belts• Black Belts are essentially drawn from various business areas

and are then fully dedicated to the “Six Sigma” projects• They undergo training in the Six Sigma methodology• They are responsible for executing the project and also for the

project success based on predefined criteria, charter.• They lead a team (Green Belts) of employees from the business

areas which assists them in executing the projects

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Qualities of a Black BeltBlack Belts are vital to the success of Six Sigma• They should possess a good knowledge of the business• They should possess leadership qualities• They should be self motivated and go getters

In effect they should be those employees whose absence will be felt in their departments

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Financial Green belt• All the projects need to add to the bottom line of the

company• The financial impact and real savings are tracked and

monitored by Financial Green belts.• They are independent of the project team and act as

“unbiased third party” to audit the improvements

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Six Sigma : Project stages(MAIC)• Measure• Analyse• Improve• Control

Six S.M. PathakS.M. Pathak

Six Sigma : Project stagesMeasure• Data collection and evaluation of current

Process Capabilities (sigma levels)• Preparation of Process Flow• Input and Output variables• Failure Modes and Effects Analysis (FMEA)

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Six Sigma : Project stagesAnalyse• Statistical analysis and correlation of

parameters• Root Cause Analysis• Analysis of Behaviour (ABC and BOC)• Identify parameters for improvement

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Six Sigma : Project stagesImprove• Design of Experiments (DOE) based on

Analyse phase• Analyse data from experiments• Draw conclusions

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Six Sigma : Project stagesControl• Prepare plan to Manage Change• Prepare modified Process Flow• Prepare a control plan document• Pin point responsibilities for the change• Identify process owners for control purposes

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• Any Questions???

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Documents

Six Sigma Basics