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OnlineStudentGuide

OpusWorks2016,AllRightsReserved

SixSigmaIntroduction

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TableofContentsLEARNINGOBJECTIVES......................................................................................................................................4INTRODUCTION....................................................................................................................................................4SIXSIGMAANDBUSINESSSUCCESS........................................................................................................................................4WHATISSIXSIGMA?.................................................................................................................................................................5LEAN:THEORIGINOFSIXSIGMA...........................................................................................................................................5MANAGEMENT............................................................................................................................................................................6LEANANDSIXSIGMA................................................................................................................................................................6VOICEOFTHECUSTOMER(VOC)...........................................................................................................................................7VOICEOFTHEPROCESS............................................................................................................................................................7THERELATIONSHIPBETWEENSIGMALEVELANDDPMO...............................................................................................8WHATDOESSIXSIGMAMEANTOYOU.................................................................................................................................9SIXSIGMA:TODAY’SPERFORMANCEMEASURE..................................................................................................................9SIXSIGMASUCCESS................................................................................................................................................................10

TEAMMEMBERINTRODUCTION..................................................................................................................10EXECUTIVEMANAGEMENT...................................................................................................................................................10PROJECTCHAMPIONS.............................................................................................................................................................10MASTERBLACKBELTS..........................................................................................................................................................10BLACKBELTS...........................................................................................................................................................................10GREENBELTS..........................................................................................................................................................................11FINANCIALLIAISONS..............................................................................................................................................................11SIXSIGMAIS“TOPDOWN”DRIVEN....................................................................................................................................11SIXSIGMAPROJECTSELECTIONMUSTALIGNWITHBUSINESSSTRATEGY.................................................................12SUCCESSFACTORS..................................................................................................................................................................12SIXSIGMAPROJECTTEAMSAREPROCESSFOCUSED.......................................................................................................13THESTRUCTUREOFSIXSIGMAPROJECTS.........................................................................................................................13THEFOCUSOFSIXSIGMAMETHODOLOGY........................................................................................................................14IDENTIFYTHEKEYLEVERAGEKPIVS................................................................................................................................15

SIXSIGMADMAICMETHODOLOGY..............................................................................................................15THEDMAICMETHODOLOGYOVERVIEW..........................................................................................................................16DEFINEPHASE.........................................................................................................................................................................16MEASUREPHASE....................................................................................................................................................................16ANALYZEPHASE.....................................................................................................................................................................17IMPROVEPHASE......................................................................................................................................................................17CONTROLPHASE.....................................................................................................................................................................17SIXSIGMAIS….........................................................................................................................................................................18

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©2016byOpusWorks.Allrightsreserved.Version5.5April,2016TermsofUseThisguidecanonlybeusedbythosewithapaidlicensetothecorrespondingcourseinthee-LearningcurriculumproducedanddistributedbyOpusWorks.NopartofthisStudentGuidemaybealtered,reproduced,stored,ortransmittedinanyformbyanymeanswithoutthepriorwrittenpermissionofOpusWorks.TrademarksAlltermsmentionedinthisguidethatareknowntobetrademarksorservicemarkshavebeenappropriatelycapitalized.CommentsPleaseaddressanyquestionsorcommentstoyourdistributorortoOpusWorksatinfo@OpusWorks.com.

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LearningObjectives

Uponcompletionofthiscourse,studentwillbeableto:• DefineSixSigmaandDiscussitsoriginandevolution• DescribehowitdiffersfromLeanandSixSigma• Explainhowsigmalevelsaredetermined,andhowtheyareusedtoindicateprocesscapability• DescribetherolesofSixSigmateammembers• DiscusskeyfactorsofSixSigmasuccess• DiscussimportantelementsoftheSixSigmaprocess,includingkeyinputsandoutputsandthe

roleof“CriticaltoXs”• DescribethefivephasesoftheDMAICimprovementcycle

Introduction

SixSigmaandBusinessSuccess

Tobegin,let’stakealookatwhatmakesanorganizationsuccessful.Whenwecomparesuccessfulorganizations,wefindthemtosharethefollowingfourkeyelements:• Customerfocus:Theyarecommittedtosatisfyingbothinternalandexternalcustomers.• Responsiveness:Theyareresponsivetotheneedsofthecustomer,andtheymeetthoseneedsin

atimelymanner.• Differentiation:Theydifferentiatethemselvesfromthecompetitionthroughexceptionalbusiness

performance.Theydon’tsimplysatisfytheircustomers;theydelightthem.Typically,thismeansprovidingvalueinalltheydo.

• Continualimprovement:Theyareinnovativeandrelentlessintheirpursuitofcontinuousimprovement,inwhichtheyseektoachievequalityatreducedcosts.

Fortheseorganizations,LeanandSixSigmaprinciplesarethebackboneoftheirsuccess.Today,manyorganizationsaresuccessfullyintegratingSixSigmaPrinciplesintotheirbusinessmodelsasawaytodifferentiatethemselvesfromcompetition.

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WhatisSixSigma?

So,whatexactlyisSixSigma?Let’stakeamomenttodefineSixSigmainbroadterms.SixSigmaisacommitmenttothecustomer.Itisanassurancethatanorganizationwillcontinuouslyimproveitsprocessesuntilitcanconsistentlyexceedcustomerrequirements.SixSigmaprovidesastatisticalmeasurementofanorganization’sprocess,whichisbothreliableandvalid.SixSigmastretchespeople’sthinkingwithinanorganization,withrespecttoqualityandcustomersatisfaction.Itimprovesanorganization’sabilitytosolveproblemscreatively.SixSigmaprovidesamanagementframework,oramentalset,forsimultaneouslythinkingaboutprocesseconomics,quality,andcustomers.Next,wewillreviewthehistoryofSixSigmamethodology.Lean:TheOriginofSixSigma

Today’sSixSigmaprinciplesevolvedandexpandedfromthefundamentalLeanmethodologyusedduringthe1970s.ThetransitiontoSixSigmastartedwhenaJapanesecompanyacquiredMotorolaTVproductioninthelate1970sandwasabletodropitsdefectrateto1/20thofitspriorlevel.

Subsequently,intheearly1980s,MotoroladevelopedSixSigmamethodologyundertheleadershipofBobGalvinandreinforcedbythesoundpracticesofMikelHarryandBillSmith.Sincethattime,SixSigmahasgrownintotheglobalcontinuousimprovementmethodologyitistoday.

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Management

Let’slookathowSixSigmadiffersfromotherqualityinitiatives.OnedistinguishingfactorofSixSigmaisitsformalimplementationprocess,whichstartswithstrongmanagementsupportfromtheverytopoftheorganization.Itisatop-downdrivenmethodology.Qualityinitiativesthatusethebottom-up,orgrassroots,approachoftenfailbecausetheydon’thavepropermanagementorleadershipsupport.Withalimitedstructuretofollow,andwithoutthecooperationoftheentirecompany,itisdifficultforindividualbusinessunitstoimplementtheirideas.SixSigma,ontheotherhand,activelyinvolvesallemployeesintheimprovementprocess.Forexample,inacookie-bakingprocess,thecrispnessofthecookiesmightbetheresponsevariable.LeanandSixSigma

LikeLean,SixSigma’sprocessimprovementmethodologyappliestoavarietyofbusinessproblems,withinbothmanufacturingandserviceorganizations.Asidefromthiskeysimilarity,however,LeanandSixSigmaarefundamentallydifferent.Let’scomparethetwo.SixSigmaisadatadrivenstatisticalbusinessmethodology.Itfocusesonminimizingprocessvariationinordertoidentifyandremovethecauseofdefectsanderrors.ThemainemphasisofSixSigmaistoimprovethequalityofmanufacturingandbusinessprocessoutputsbydefiningwhatrequirementsarecriticaltocustomersatisfaction.InSixSigma,therequirementsthatare“criticalto”thecustomerarereferredtoasCTXs.

Leanisanapproachtoimprovequality,increaseproductivity,reducecostsandincreasecustomersatisfactionbyeliminatingwasteandcreatingvalue.ManyorganizationscombineSixSigmaideaswithLeantocreateamethodologyknownasLeanSixSigma(LSS).Abalancedcombinationofthetwomethodologies,LSSintegratesLean’sefficiencyimprovementwithSixSigma’svariationreductionpowertooptimizebusinessprocesses.

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VoiceoftheCustomer(VOC)

Asyoujustlearned,SixSigmafocusesonimprovingthequalityofprocessoutputsbydefiningwhatrequirementsarecriticaltocustomersatisfaction.Foranorganizationtounderstandandmeettheneedsofitscustomers,itmusttrulylistentothem.TheVoiceoftheCustomer(VOC)isafundamentalprincipleofSixSigma.Let’stakealookathowitapplies.Asshownonthisgraph,theVoiceoftheCustomer(VOC)isrepresentedbylowerandupperspecificationlimits.Thesespecificationlimitsdefinethecustomerrequirements.ThecurveonthegraphrepresentstheVoiceoftheProcess,whichisameasureofthevariationoftheprocessdata.Next,wewillshowyouhowanorganizationcananalyzeitsprocessdata,inrelationtothespecificationlimits,todeterminehowwellitisrespondingtoitscustomers’needs.VoiceoftheProcess

RecallthattheVoiceoftheProcessisameasureofthevariationintheVOCdata.Itisrepresentedbythestandarddeviationofthedata,or“sigma.”

InSixSigmaterminology,therearetwomeaningsfortheword“sigma.”Thefirstmeaningofsigmaisstandarddeviation.Itisameasureofthespread,orvariation,ofthedatafromthemean.Alowstandarddeviationindicatesthatthedatapointsareallfairlyclosetothemean.Ahighstandarddeviation,ontheotherhand,indicatesthatthedatapointsarespreadoutoveralargerrangeofvalues.

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Thesecondmeaningofsigmareferstothelevelatwhichaprocessiscapableofmeetingcustomerspecifications.Thiscapabilitylevelisreferredtoasasigmalevel,orsigmascore.Itisdeterminedbythedistancefromthecenterofthedatatothespecificationlimits,asmeasuredinstandarddeviations.Inthisdiagram,forexample,thedistancefromthecenterofthedata,orthemean,totheclosestspecificationlimitistwostandarddeviations.Therefore,wesaythecapabilityofthisprocessformeetingcustomerspecificationsistwosigma,orthattheprocessisoperatingatatwosigmalevel.Next,wewilldiscusssigmalevelsinmoredetail.TheRelationshipBetweenSigmaLevelandDPMO

Sigmaprocesscapabilitylevelscanbeusedtocalculateandexpressmeasures.Theyindicatethepercentageofaprocessoutputthatisgoodproductversusthepercentagethatisdefective.Thesepercentagesaredeterminedbydefectspermillionopportunities,orDPMO.

Thischartshowstheperformanceyieldsofeachsigmalevel.Asyoucansee,attheonesigmaprocesscapabilitylevel,DPMOis690,000.Thismeansthatonly30.9percentoftheprocessoutputisgoodproduct,andthat69.1percentisdefective.Atthesixsigmalevel,ontheotherhand,DPMOisonly3.4,whichtranslatesto99.9997percentyield.

Recallthatinourpreviousexamplewedeterminedtheprocesstobeoperatingatatwosigmalevel.Thismeansthat30.8percentoftheprocessoutputwillbedefective.

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WhatDoesSixSigmaMeantoYou

Asyoujustlearned,sigmalevelmeasurementsarespecificallybasedonthenumberofdefectsintheprocess.Atonetime,99percentqualitywasconsideredgood.99percentrepresentsa3.8sigmaprocess.Let’sseewhatthatmeans.Eachofthesefourexamplesshowshowa3.8sigmaprocesscomparestoasixsigmaprocess.Takeacloselookatthefirstexample.Asyoucansee,asixsigmaperformanceisn’tjusttwotimesbetterthana3.8performance;itisalmost20,000timesbetter!

InSixSigma,theimprovementsfromonesigmaleveltothenextareexponential.SixSigma:Today’sPerformanceMeasure

SixSigmameasurementscanbeusedtocompareprocesses,departments,facilities,companies,andthelike.

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Thisgraphusessigmalevelstomeasuretheperformanceofvariousprocesses.Asyousee,whenthesigmavaluegoesup,thenumberofdefectsdeclines.Inotherwords,thehigherthesigmavalue,thebetterthequality.SixSigmaSuccess

SixSigmaisaboutpeople.Thesuccessofanorganization’sSixSigmainitiativedependsgreatlyuponthestrengthofitsteam.Businessleadersmustensurethatselectedteammembershavethecorrectskills,arestrongleaders,andreceivetraininginbothSixSigmamethodologyandteammanagement.TeamMemberIntroduction

AlthougheachSixSigmateammaybeconfigureddifferently,andthenamesofthemembersmaychange,therolesandresponsibilitiesforasuccessfulimplementationareusuallyverysimilar.ExecutiveManagement

ExecutiveManagement,sometimesreferredtoasDeploymentChampions,isresponsibleforthesponsorshipandcommitmentofanorganizationtotheSixSigmamethodology.ExecutiveManagementprovidestheorganizationalstructurenecessarytosuccessfullyimplementSixSigma.ProjectChampions

ProjectChampionsareheldaccountablefortheproject’simplementation.Theyregularlyreviewprojectplanstoensureprojectdevelopment,completion,andimplementation.ProjectChampionsarealsoaresourceforremovingroadblocksandresistance.MasterBlackBelts

MasterBlackBeltsareoftenformerBlackBeltswhohavesuccessfullycompletedaspecificprogramthatoftenincludessuccessfullycompletingnumerousprojects,advancedstatistics,advancedleadershipskillsandadvancedchangemanagementskills.MasterBlackBeltspromotetheSixSigmaphilosophythroughouttheorganization.TheyactasaconsultativeresourceforBlackBelts;andtheytrain,coach,andmentorotheremployees.BlackBelts

BlackBeltsactasbothstatisticalconsultantsandteamleadersfortheproject.TheyworkwithaChampiontoselecttherightproject,andtheyareaccountablefortheresults.Theirresponsibilitiesincludedeployingeffectivecontrolplanstoensuregainsaresustained,andcommunicatingresultstoleveragegainswithinandamongorganizations.Theyalsohelptrainotheremployees.BlackBeltswhoreceiveadditionaltraininganddemonstratesuccessatleadingSixSigmaprojectscanbecomeMasterBlackBelts.

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GreenBelts

GreenBeltsareavaluableresourceforBlackBelts.BecauseGreenBeltemployeestypicallyperformtheoperationswithintheprocess,theymayactassubjectmatterexpertsonprocessknowledge.Forexample,theywillknowifanyprocesschangesoccurredthatmightnotberepresentedintheprocessdocumentation.GreenBeltsaretrainedtousespecificSixSigmatoolsinordertoassistBlackBeltsthroughvariousstagesofanimprovementproject.Bylearninghowtousethesetools,theybecomemoreeffectiveatpresentinginformationandideastotheteam.Theyareoftenthelinkbetweentheprojectteamandtheoperationalteam.TheyaretrainedtomanageprojectsusingtheSixSigmaDMAICmethodology.Inmanycases,theyareassignedprojectworkbyChampions.FinancialLiaisons

FinancialLiaisonsprovidekeyfinancialmetricinformationtohelpcreatetheCostofPoorQualityandcostreductionopportunities.Theyhelpquantifythefinancialbenefitoftheimprovementprojectattheoutsetoftheprojectandwhenthesolutionisselected.SixSigmais“TopDown”Driven

InSixSigma,anorganization’simprovementprojectactivitymustalignwithitsoverallbusinessstrategy.Atop-downdrivenmethodology,SixSigmaensuresthisalignmentthroughactivemanagementleadership,commitment,andparticipation.Herearesomeexamples:

§ Tomaximizereturnoninvestment(ROI),managementfocusesonblendingcustomerrequirementsandcoreprocesseswithstakeholderneeds.

§ Itdefinesanduseskeymetricstomonitorandtrackprojectperformance.§ Itlinksquantifiablelongtermresultstothebusinessstrategy.

Next,wewillexaminetheprojectselectionprocess.

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SixSigmaProjectSelectionMustAlignwithBusinessStrategy

Asyoujustlearned,thesuccessofaSixSigmaprojectdependsgreatlyuponitsleadership.Inparticular,akeyfactorofsuccessismanagement’sabilitytoselecttherightproject.Well-selectedprojectsreaphugerewards,whileusingcompanyresourceseffectivelyandbalancingrisks.Managementshouldchooseprojectsthatalignwith,andeffectivelyimpact,thecompany’sstrategicimprovementandfinancialgoals.Itshouldprioritizeprojectsbasedoncomplexity,risk,reward,resourcesavailable,andthecurrentneedsoftheorganization.Thereareanumberofimportantissuestoconsiderwhenselectingaproject,includingthethefollowing:• Howdoestheprojectaffect,orcorrelatewith,overall

businessobjectives?• Willtheprojectimpactcustomersatisfactionorcost?• Howdifficultorcostlywillthepotentialprojectprocessimprovementsbetoimplement?• Howlongwillittake?• Whatskills(suchasBlackBeltorGreenBelt,forexample)arerequired?

Management’sabilitytomatchtherightresourcestotherightprojecthasasmuchimpactonaproject’ssuccessasdoesthedegreeofcommitmentfromtheSixSigmateam.SuccessFactors

ThecommittedleadershipofmanagementiscriticaltoSixSigmasuccess.Withoutit,improvementeffortswillnotachievebreakthroughperformanceorbesustainedovertime.OtherfactorsthatcontributetoasuccessfulSixSigmaimplementationareshownhere.Takeamomenttoreviewthem.Toensuresuccess,anorganization’smanagementmustalsobeawareofroadblocksandimplementstrategiestoremovethem.

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SixSigmaProjectTeamsareProcessFocused

YouhavejustlearnedsomekeyfactorsofSixSigmasuccess,includingawell-trainedteam,strongleadership,andcorrectprojectselection.Nowlet’sseehowSixSigmaactuallyworks.Tobegin,let’sbrieflyreviewthedefinitionofaprocess.AsitrelatestoSixSigma,aprocessbeginswhenanorganizationgetssuchthingsasequipment,people,ormaterialsfromitssuppliers.Next,asequenceofeventsorstepsoccursthatproducesaproductorservicethatispassedontoitscustomer.Theentireprocessfromthesupplierstothecustomersiscalledthevaluestream,anditisthefocusofLean.

SixSigmaprojectteamsareprocessfocused.Theyaddressspecificproblemsrelatedtoprocessquality,defects,andexcessvariation.Theyusetoolssuchasprocessmaps,causeandeffectdiagrams,anddataanalysistoidentifyandeliminatetherootcausesoftheproblem.

TheStructureofSixSigmaProjects

Thisillustrationshowsthebasicstructureofaprocess,asitrelatestoaSixSigmaproject.RecallthatCTXsarethosethingsthatare“criticalto”thecustomer.Inordertotrulyunderstandthesecustomerrequirements,CTXsmustdothefollowing:clearlydescribewhatthecustomerislookingfororwillbeevaluating;linktoaspecificprocessoutputrequirement;describeasingleperformancecriteria;andbeexpressedusingobservableormeasurablefactors.CTXsaredividedintothefollowingthreecategories:CriticaltoQuality,orCTQ;CriticaltoCost,orCTC;andCriticaltoDelivery,orCTD.

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KeyProcessOutputVariables,orKPOVs,arethethingsthataremeasuredastheoutputoftheprocess.TheSixSigmateammustbeabletotietheseprocessmetricsdirectlytoCTXs.SixSigmaprojectsaddressgaps,ordeficiencies,inoneofthethreeCTXcategories.InadditiontoaddressingtheCTXsofbothinternalandexternalcustomers,projectsmustalsoaddress,andalignwith,anorganization’soverallbusinessstrategy.Next,wewilltakeacloserlookatwhatthismeans.TheFocusofSixSigmaMethodology

ThegeneralideabehindtheSixSigmamethodologyisasfollows:Ifanorganizationcanestablisharelationshipbetweentheinputstoaprocessandtheoutputs,itcancontroltheinputs,whichwillallowittopredicttheoutputs.InSixSigmaterminology,theoutputsarecalledY’s,andtheinputsarecalledX’s.Theexpression,“YisafunctionoftheX’s”isoneofthemostimportantconceptsbehindpermanentlysolvingprocessandbusinessproblems.That’sbecauseitrequiresimprovementstobemadeatthemostbasiclevelsofaprocess.

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IdentifytheKeyLeverageKPIVs

AnotherwaytovisualizetheSixSigmaprocessistouseafunnel.Asyouseehere,manyinputs(KPIVsorXs)gointothefunnel.Throughoutthephasesoftheproject,theteamnarrowsdownthelistofinputsdown.ThisallowstheteamtoidentifyafewkeyleveragedKPIVs,whichhavethemostinfluenceontheoutputs(KPOVsorYs),andaretightlycontrolled.Theresultisanimprovedprocessthatmeetscustomerrequirements.SixSigmaDMAICMethodology

TheprimaryimprovementmethodologyusedinSixSigmaprojectsisDMAIC.Theletters,D,M,A,I,C,

standforDefine,Measure,Analyze,Improve,andControl,whicharethefivephasesofthisimprovementcycle.DMAICisastructured,statisticallyfocused,rigorous,datadriven,andsystematicbusinessimprovementmethodology.ItiskeytoSixSigmaprojectsuccess.

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TheDMAICMethodologyOverview

HereisanoverviewoftheDMAICmethodology.ThefocusoftheDefinephaseistoestablishtherealproblemanditsimportancetothecustomerandquality.

ThefocusoftheMeasurephaseistogatherinformationonthecurrentprocessperformanceanddeterminebaselinecapability.

ThefocusoftheAnalyzephaseistoevaluateanddigestthedata,andtodeterminetherealkeyrootcauseoftheproblem.

ThefocusoftheImprovephaseistodevelopacourseofactiontofixtherootcause,andthenverifythefix.

Onceafixisincorporated,thefocusoftheControlphaseistoimplementcontrolstomaintainimprovement,andtoverifythefixagain.

Next,wewillexaminethedetailsofeachphase.DefinePhase

IntheDefinephase,membersoftheprojectteamarechosenbasedupontheirskills,relativetotheproject.Inthisphase,theteam’sobjectiveistoidentifyandvalidatetheimprovementopportunity;definecriticalcustomerrequirements;andprepareitselftobeaneffectiveprojectteam.TheteambeginstheimportantstepofdocumentationbycreatingaProjectCharteranddeterminingtheprojectscope.MeasurePhase

AmajorbenefitofSixSigmaisitsrequirementforafact-basedanddata-drivenanalyticalapproach.IntheMeasurephase,theteamhasseveraltypesofprocessmapsavailabletodocumentthecurrentas-isprocess.ItbeginscollectingdatatoidentifytheprocessparametersthataffecttheCTQvariables.Withthisinformation,theteamanalyzesthecurrentmeasurementsystemandestimatesthebaselinecapabilityoftheprocess.ItmeasurestheCostofPoorQualityasitrelatestotheproject.

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AnalyzePhase

IntheAnalyzephase,theteamusestheresultsfromtheMeasurephasetonarrowtherangeofpotentialcausesrequiringinvestigation.Inthisphase,theteamusesCauseandEffectanalysistounderstandthecausesofvariationintheprocessandprocessbehavior.Itidentifiespotentialcausesoftheproblemandperformsanalysistoidentifyrootcauses.ImprovePhase

IntheImprovephase,theteamidentifies,evaluates,andselectstherightimprovementsolutionstomaximizereturnoninvestment.Itsobjectiveistodemonstrate,withfactsanddata,thatitschosensolutionssolvetheproblem.Theorganizationimplementstheprocesschangesthatwilleliminatethedefectsandclosethegapbetweenthecurrentprocessperformanceandcustomerneeds(remember,thesearethecustomerneedsthatwereidentifiedduringtheDefinephase).Inthisphase,theteamdevelopsachangemanagementapproachtohelptheorganizationadapttothechangesintroducedthroughitssolutionimplementation.

ControlPhase

IntheControlphase,theteam’sobjectiveistoensurethegainsachievedwillbemaintained,andtheprocesswillnotrevertbacktoitspriorstate.Todothis,itputsprocesscontrolsandacontrolplaninplace.Inthisphase,itidentifiesandimplementsaplanfortransitioningfromtheSixSigmateamtotheoperationsteam.Finally,theteamleverageswhatitlearnedfromtheprojecttohelpmanagementandothers.

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SixSigmais…

Insummary,SixSigmaisaboutimprovingcustomersatisfactionandloyalty.Itisadisciplinedmanagementphilosophyusedtobringaboutchangeandimprovebottomlinefiscalresults.Itusesstatisticaltechniquesandtools,andensuresaccountabilitybyusingvalidandreliablemeasurements.SixSigmaisamethodforimprovingprocessesbyreducingvariationandeliminatingdefects.DMAIC,a

five-stepimprovementcycle,istheprimarymethodologyusedinSixSigmaprojects.