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Process Improvement Process Improvement MethodologyMethodologyTMTM

Six Sigma

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Purpose

Provide An Overview of Six Sigma Layout the Process Improvement MethodologyTM

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Code of Conduct

Please listen as an ally… If you have a question at any time, ask! Use name tents Please be prompt in returning from breaks Turn off the mobile/pager system while in

training

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Expectations

You will have a better understanding of Six Sigma

What are your expectations for this session?

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!!!!!Quality!!!!!

Conformance to dimensions, fit, form, requirements, use, Customer Satisfaction.

Problem solving

• Condition of output• Changing gaps between good & bad.

• Solutions are engineered well with statistical guidance to Engineering.

• Who created problems in the first place could not be used to solve it

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ProcessProcessModelingModeling(Taguchi) (Taguchi)

StatisticalStatisticalProcessProcessControlControl

(Deming) (Deming)

Pursuit of Quality

Inspect for QualityInspect for Quality

19301930 19401940 19501950 1980198019601960 19701970 19901990 20002000

Design forDesign forSix Sigma Six Sigma

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!!!!!What’s new!!!!!

Active Leadership Integration with strategy Quality net income Special Matrics Special roles Project Management Facts decide not judgement. Alignmenet of drivers & behaviour System Approach Remuneration linkage with six-sigma initiatives.

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Six Sigma

Sigma Breakthrough Technologies has a proven track recordtrack record

Methodology that is unique, systematic, proven, unique, systematic, proven, simple, lastingsimple, lasting

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Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

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Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

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What is Six Sigma?

An approach to sustainable breakthrough improvement that: Fosters a common language and cross-functional

cooperation within and between divisions Strengthens our productivity efforts Develops our process improvement core competency Uses statistical tools for significant variability reduction Helps

Develop expert personnel and future leaders Increase capacity with minimal capital Meet productivity goals Improve customer service

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Improving performance by flawless execution

Achieving rapid breakthrough improvement

Applying advanced breakthrough tools that work

Making a positive and deep cultural change

Getting Real Financial Results

Passion + Execution = Fast and Lasting Results

Six Sigma Focus

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Overall Perspective

Customer Requirements

Robust Designs

Predictable Flexible

Factories

Process Capabilities

Technology Capabilities

Materials Capabilities

Organization Capabilities

Customer Satisfaction

Safety

Rolled Throughput

Yield

COPQ, 4 Wall Cost

Capacity Productivity

Materials Mangmnt & Inventory

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Six Sigma Systems

New Product Development

Six Sigma Leadership Systems

Problem Solving

Process Operation

and Control

Materials Management

Reliability Centered Maint.

Six Sigma Data Systems

Human Resource Involvement

Measurement Control

Customer Satisfaction Assessment

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What is Six Sigma? SimpleSimple:

Eliminate variation and defects Eliminate the opportunity for variation and defects

ComplexComplex Vision Metric (Standard of measurement) Benchmark Philosophy Method Tool for:

Customer focus Breakthrough improvement Continuous improvement People Involvement

Aggressive Goals

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

Sigma PPM

A Measurement

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% Non-Defective

Another Look . . .

2 69.1%

3 93.32%

4 99.379%

5 99.9767%

6 99.99966%

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Practical Meaning

99% Good 99.99966% Good

Postal System

20,000 Lost Articles Of Mail / Hr 7 Lost Articles / Hr

Airline System

Two Short/Long Landings / Day 1 Short / Long Per 5 Years

Medical Profession

200,000 Wrong Drug Prescriptions / Year 68 Wrong Drug Prescriptions

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7

Sigma Level

1,000,000

100,000

10,000

1,000

100

10

1

PPM

Restaurant Bills

Payroll Processing

Prescription Writing

Baggage Handling

AirlineSafety Rate

3 4 5 621

What Does 6 Sigma Mean In Your Daily Life?

Best in Class

Tax Advice

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Business Metrics

Number of antibiotic prescriptions issued in 1996: 282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were to treat colds, bronchitis, and respiratory infections...

USA TodayMedical Article

September 22, 1997

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Business Metrics

Number of antibiotics prescriptions issued in 1996: 282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were to treat colds, bronchitis, and respiratory infections...

USA TodayMedical Article

September 22, 1997

even though more than 90% of such infections are caused by viruses, which are immune to antibiotics.

53,000,000 defective prescriptions = 2.4

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Business Metrics

Tranquilizers / Anti-Anxiety Medications:76,370,000

Sleeping Pills / Sedatives:23,681,000

Anti-Obesity Drugs:23,596,000

Sources: IMS America, Plymouth Meeting, PA.

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Business Metrics

Instructor’s Note:

Despite being less than 3 sigma, we are “happy” to reportDoctors are operating with very profitable returns.

This only proves . . . You don’t have to be 6 Sigma to make money.

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Reality of Escaping Defects

TToottaall DDeeffeeccttss//UUnniitt

EE sscc aa

pp ii nn

gg DD e

e ffee cc

tt ss

Escaping Defects

No matter how good your inspection and test processes are, the more defects you create, the more defects escape to the customer

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Premise for Six Sigma Methods

Sources of variation can be Identified Quantified and prioritized Eliminated by control or prevention

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3 Sigma Process

Upper SpecLower Spec

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Lower Spec Upper Spec

6 Sigma Process

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Dissecting Process Capability

LSL USL

Defects

Process Capability

Inadequate Design Margin

Inadequate Process

Capability

Supplier Variation

Inadequate Measurement

Capability

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Dissecting Process Capability

LSL USL

Process Capability

Ove

r W

eigh

t.A

ir B

ubbl

eW

rong

Col

orD

efo

rmat

ion0

500

1000

0

20

40

60

80

100

Defect

Per

cen

t

Co

un

t

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Business Impacts of Variability

Prevention CostsPrevention Costs Education and training Quality planning Product design qualification tests Supplier qualification Customer interface Controlling processes

Appraisal CostsAppraisal Costs Incoming inspection Maintenance and calibration of

equipment Setup inspection and tests Field testing Process audits

Internal FailureInternal Failure Scrap Supplier caused losses Rework

Retest / Re-inspection Unplanned downtime Trouble shooting Engineering change notices

External FailuresExternal Failures Processing customer inquiries Maintaining customer field service Retro fit costs Incurring penalties/claims Product warranty Lost sales

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Exercise

Go through the list on the previous slide and indicate which costs are EASILY accessed through your current finance systems.

Count the selected elements

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6

5

4

3

2

5% 10% 15% 20% 25% 30%

Sigma Level

Cost of Failure (% of Sales)

3 Cost of Failure : 20-25% of Sales3 Cost of Failure : 20-25% of Sales

What’s Your Cost Reduction Opportunity?What’s Your Cost Reduction Opportunity?

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Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

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Six Sigma

INITIATIVE Improvement Breakthrough Focused Approach Right Projects Right People Project Reviews Sustain the Gains Results ($$)

METHODS & TOOLS Process Thinking Process Variation Facts, Figures, Data DMAIC 8 Key Tools Statistical Tools Minitab Critical Few Variables

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Process Excellence: Process Excellence: The Right MetricsThe Right Metrics

1050

0.21

0.20

0.19

0.18

0.17

0.16

0.15

0.14

Month

CO

PQ

How is this process doing?

ScrapScrap

1050

400

350

Month

Un

its

pe

r D

ay

RateRate

1050

7

65

55

Month

RTY

Goal

Actual

Baseline

Defects per 1000Defects per 1000

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Actual Metrics Example

Scrap Downtime

Defects/Unit

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Others

Assembly

Technical

Process

34 164 1981328 2.0 9.511.577.0

100.0 98.0 88.5 77.0

1800

1600

1400

1200

1000

800

600

400

200

0

100

80

60

40

20

0

Defect

CountPercentCum %

Per

c ent

Cou

nt

Pareto Chart for Cause

Using Pareto’s to Select Projects

Stopcock TSII

Safety S

hield Stop

Housing 5m

m

Knife -50

0x100mm

Spring, Reset

Inner Gasket

Kni fe Assem

bly

50 69 72 74 75128148 8.111.211.712.012.220.824.0

100.0 91.9 80.7 69.0 57.0 44.8 24.0

600

500

400

300

200

100

0

100

80

60

40

20

0

Defect

CountPercentCum %

Per

c ent

Cou

nt

Major Part Failure due to Process

Knife Assembly and Inner Gasket are the two major

process scrap drivers

Two Potential Projects: - Knife Assembly

- Inner Gasket

Process Related Scrap is the Highest

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Six Sigma Methods

Six Sigma Everywhere

MFG.

DESIGNSERVICE

PURCH.

MAINT.

ADMIN.

QA

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Process MeasurementProcess Measurement

Process AnalysisProcess Analysis

Process ImprovementProcess Improvement

Process ControlProcess Control

Process DefinitionProcess Definition

The Process Improvement MethodologyTM

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Phase III: Process Improvement• Verify Critical Inputs• Optimize Critical Inputs

Phase II: Process Analysis• Complete FMEA• Perform Multi-vari Analysis• Identity Potential Critical Inputs• Develop Plan for Next Phase

Phase IV: Process Control• Implement Control Plan• Verify Long Term Capability• Continuously Improve Process

Phase 0: Define

•Scope and Boundary

•Define Defects

•Team Charter and Sponsor

•Estimated $ Impact

•Leadership approval

Phase I: Process Measurement• Map process and Identify Inputs and Outputs• Cause and Effects Matrix • Establish Measurement System Capability• Establish Process Capability Baseline

The Process Improvement MethodologyTM