Six Sigma Performance Workshop

Six Sigma: A CMA View

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Six Sigma:The Opportunity for Canadian Industry

Presentation to CMA

Wednesday, March 23, 2005Toronto, Ontario

Six Sigma:The Opportunity for Canadian Industry

Presentation to CMA

Wednesday, March 23, 2005Toronto, Ontario



-1%

0%

1%

2%

3%

4%

5%

91 92 93 94 95 96 97 98 99 00 01 02 03 04

United StatesCanada

Productivity Growth Rate

Source: StatsCan



What is Six Sigma?

“Six Sigma is a strategic program & methodologythat organizations are leveraging to transform

themselves into best-in-class businesses.

This is achieved by a dramatic increase incustomer focus, establishment of near defect-free processes, products, and services, with a

goal of maximizing shareholder value.”

Eliminate defects…Minimize variation…Eliminate defects…Minimize variation…



Six Sigma Is…

ToolsTools• Basic analysis tools• Advanced statistical tools• Manufacturing AND service processes

PhilosophyPhilosophy• Belief that eliminating defects in products and

processes is the best way to improve costs, cycle time, and customer satisfaction

MethodologyMethodology • Step-by-step cookbook• Rigorous project methodology

Metric and GoalMetric and Goal• 99.9997%• 3.4 Defects Per Million Opportunities (DPMO)• Near-zero defects



Paradigm Shift at GE

“We are going to shift the paradigm fromfixing products to fixing and developing

processes, so that they produce nothing but perfection or close to it!”

Jack Welch, CEO, General ElectricGE’s launch of the Six Sigma

Management System, 1995



Successful Business Need to Be…

• Customer centric

• Process focused

• Measurement based

• Fact driven

• Results oriented



Variation is our enemy!

Example: Engineering Change Order Approval (ECO)

The average (mean) ECO is 28 days. Customer expectation as well as related internal resource commitments are based on this average.

But, what does the real picture look like? How does this impactthe customers, support staff, account managers, and other resources in the value-stream?

28 days



Customers Feel The Variation!This is the reality. While the 10 day average is accurate, the customer

and the supporting systems feel the variation as depicted by the“distribution” pictured below.

How does this variation affect customer satisfaction? How does it affect resource scheduling? How does it affect costs? In reducing variation, will we also be able to reduce the average or mean?

28 days

Freq

uenc

y

44 days12 days



Understanding Variability andEliminating Defects

1. Identify main sources of variability2. Eliminate special (assignable) causes3. Reduce and\or control common

(inherent) causes

Result: Precise and accurate processes thaton-target, predictable results.

Result: Precise and accurate processes thaton-target, predictable results.



Analyzing Process Variation

“Experimenter”Y = f(X1.. Xi) Correlation RegressionAnalysis of Variance Design of Experiment…Testing hypotheses and driving results!

Y = f(X1.. Xi) Correlation RegressionAnalysis of Variance Design of Experiment…Testing hypotheses and driving results!

70’s Show



Sigma versus COPQ

Process Capability DPMO

How Often Cost of Quality

Sigma Level Parts Per Million Defective

Correct? % of Revenue

1 697,700 30.2% > 40%

2 308,537 69.1% 30-40%

3 66,807 93.32% 20-30%

4 6,210 99.38% 15-20%

5 233 99.977% 10-15%

6 3.4 99.9997% < 10%



The Pursuit of Excellence



Aligning Customer Satisfaction and Strategic Goals…

Voice of Customers

CorporateGoals

Quality

Outcome

Delivery

Quality of Services

Price/Value

Cost

Six Sigma applies customer-driven measures to process improvement: Customers can be clients, vendors, and employees



Voice of the Customer: Establish metrics that will measure and monitor performance

• How are we performing in the eyes of the customers?

• What does my customer need from my process?• What can we do better?• How would my customer like my process to

perform?• How does my customer measure my process?• Is my process changing in step with the needs of

my customer?



A Convergent Approach

Canada CartageSystems

Tech

nolo

gy People

Innovation

Six Sigma:Highly customer focusedProcess excellence goalsEliminate defects & variationCommon language, culture,

goals, & methodologyData-driven decisionsEfficiency: cost savings

Vision:Increased efficiencyLeverage technologyExcellence: Continuous

ImprovementProactive – not reactiveIncreased accountabilityLong-term sustainability

Commitments:Innovative methodologiesCustomer satisfactionPerformance accountabilityImprove acute care

performanceReport: KPI & MetricsMeet or exceed national avg.

for customer satisfaction

Opportunities:Better management practicesMore agile & collaborativeStronger focus on preventionImproved technologyBetter resource allocationEliminate silos – life cycle mgtImproved data: decision-making

ABCCompany

Six Sigma integration: The Common Denominator



How does it work?

Two approaches:

• Strategic: Total management philosophy

• Process improvement tool

Six Sigma means data-drivendecision making!



Total management philosophy:• Committed management team • Alignment with Strategic Objectives• Visibility at all levels• Incentive compensation• Best resources• Training, coaching• Cross-fertilization: knowledge sharing and

exchange of best practices



Process Improvement Tool:• Project by project approach• Low organizational visibility• No real incentive to improve• Not necessarily aligned with strategic goals• Train people & expect results• Less overall impact on organizational

performance



Global Community

Six SigmaCompetency

Global 500Fortune 1000Global 500

Fortune 1000

Supplier Base/Mid-Market Industries

Supplier Base/Mid-Market Industries



Demand for Six Sigma Skills in Canada…Magnifoam Technology Inc.,CA-ON-MississaugaMatrikon Management, Inc.,CA-AB-EdmontonMetrik Management Inc.,CA-BC-VancouverMeyers Norris Penny,CA-BC-VancouverMircom Technologies Ltd,CA-ON-VaughanNCR Corporation,CA-ON-EtobicokeNovartis Consumer Health,CA-ON-MississaugaOwens CorningPerkinElmer, Inc.,CA-ON-Shenzhen, China. CA-QC-MontrealRaytheon,CA-ON-WaterlooSonoco,CA-ON-Mississauga, OntarioSparton Electronic Mfg in London ONStepan,CA-ON-Longford MillsTeleTech Holdings, Inc.,Orillia-ONThe Stanley Works,CA-ON-BrockvilleTower Automotive,CA-ON-Toronto Tyco Safety Products,CA-ON-Toronto/GTAVelan Inc, MTL. Int. VistaPrint, Windsor, ON, Lakeshore, ONWal-Mart Canada,CA-ON-MississaugaWinpak Portion Packaging Ltd,CA-ON-Etobicoke, ONWunderman,CA-ON-Toronto/GTA

Adecco,CA-ON-Oakville, Windsor, ONAvery Dennison Fasson Canada ,CA-ON-Toronto EastBBi Enterprises Inc.,CA-ON-CambridgeC.J. Rush Industries, TorontoCactus Commerce Inc.,CA-ON-OttawaCDI Corporation,CA-ON-Northern OntarioCeridian Canada Ltd,CA-ON-Any office in CanadaCFO2Grow ,CA-QC-MontrealCollicutt Energy,CA-AB-Red Deer CompuCom,CA-ON-MississaugaCompuware Corporation, MontrealEagle Picher Canada,CA-BC-SurreyEaton Corporation,CA-ON-MississaugaFederal Signal Corporation,CA-AB-Medicine HatGaribaldi Glass Industries,CA-BC-VancouverGenesis Executive Management.HAWORTH,CA-AB-CalgaryHewitt,CA-QC-Montreal Institute for Learning,CA-ON-Toronto/GTA Inteqna ,CA-ON-MississaugaJackson Products, Inc.,CA-ON-St. Thomas.Johns Manville Corporation,CA-AB-Innisfail, AB.L3 Comm. Spar Aerospace Ltd,CA-ON-Mississauga

Maple Leaf FoodsCottNorandaCAEMagnaWescastCIBC, TD, RBC…UniversitiesCollegesCMA’s…

Source: Workopolis Canada Listings 2005



Lean-Sigma CoalitionLean is…“…Producing what is needed, when it is needed, in exactly the right quantities, with the minimumamount of materials, equipment, labor, & space…”

Six Sigma is…“…a dramatic increase in customer focus, establishment of near defect-free processes, products, and services, with a goal of maximizing shareholder value.”

Six Sigma + Lean



Statistical Thinking

1. Practical 2. StatisticalProblem Problem

4. Practical 3. StatisticalSolution Solution



The Hidden Factory

Inputs Operation Inspect 60% RTYMeasured

Rework

Scrap

Fail

Pass

Operator InitiatedRework

Off Target



What Are Champions?Pronunciation: 'cham-pE-&n Function: nounEtymology: Middle English, from Old French, from Medieval Latin campion-, campio, of West Germanic origin; akin to Old English cempa warrior; Date: 13th century1 : WARRIOR, FIGHTER2 : a militant advocate or defender <a champion of civil rights>3 : one that does battle for another's rights or honor4 : a winner of first prize or first place in competition; also : one who shows marked superiority <a champion at selling>

Source: Merriam-Webster Dictionary

“Champions are the key to success in every (Six Sigma project). For small and large companies alike, the ability to identify the right projects, select and mentor the right people, and drive (Six Sigma) to produce breakthrough results is the responsibility of the Champion.”

Source: American Supplier Institute



Six Sigma Champion• The Champion is a trained

manager or department head who leads the deployment of Six Sigma training and mentors trainees in their area of the company

• Develop project mandates• Approve project team selection• Provide required resources• Remove barriers or obstacles• Provide ongoing reviews and feedback• Ensure project recommendations are

implemented• Ensure project savings are realized • Sign-off and acceptance of completed

projects• Ensure project gains are sustained

over the long-term



Six Sigma Black Belt• A Black Belt is a fully

trained Six Sigma expert who leads improvement teams, works projects, and mentors trainees

• Effectively manage Six Sigma project(s) through to completion

• Apply Six Sigma project methodology and tools (DMAIC)

• Project team facilitation and training• Apply statistical tools & analyses• Assist Champions in project

selection & scoping• Ensure engagement of process

owners through project life cycle• Educate others on Six Sigma• Providing feedback to senior

management on project progress and results

Our SixSigma Project



Mission& Vision

Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value

Short-Term Long-Term

Six Sigma Deployment Strategy

Customer Focus – Needs & Expectations

Principles, Values, & Infrastructure

Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value

Strategic Alignm

ent

Mission& Vision

Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value





Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value

Strategic Alignm

ent

To build real value for its shareholders and customers, your Six Sigma investment must be aligned with short-term and long-term strategic business goals and objectives.

This is a primary role for Six Sigma Champions.

Your mission is to ensure thatmeasurable financial benefit isrealized from Six Sigma.



Mission& Vision

Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value





Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value

Strategic Alignm

ent

Mission& Vision

Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value





Business Unit

Geography

Product

Service

Process

Supplier

Shareholder Value

Strategic Alignm

ent

Mission& Vision

Core Processes

Criticalto

Process

Quality

Cost

Cycle

Drilling down into the criticalprocesses, and identifying

the opportunities…



Six Sigma Project Methodology

DMAIC

DEFINE: the problem

MEASURE: gather data related to problem

ANALYZE: the data with appropriate toolsand obtain a higher level ofunderstanding & certainty

IMPROVE: cost, quality & cycle time. Reducevariation. Eliminate defects.

CONTROL: the process so improvements aresustainable & consistent.



Recognize Define Measure Analyze Improve Control Realize Standardize Integrate Design Verify

WhoExecutive leadership & Champion

OutputsCTS’s (customer: Quality, Delivery, Cost, Health/Safety)

Prioritization & Strategic AlignmentCore & Sub-processes (high level)




WhoChampion

OutputsProject portfolio (Project definition & Auth. To Start)

Baseline of processes/process mapProject package (Project Definition & Project Plan)

Project benefits/financial analysis



WhoBlack Belt (Champion to support & mentor)Note: Champion support Project “kick-off” meeting!

OutputsDetailed process mappingMeasurement plan, hidden factory, YRTData collection, DPMO, sigma, etcIdentifying variation, histogramsDetermining which tools to use

Regular

meetings with

Black Belt!Regular

meetings with

Black Belt!




WhoBlack Belt (Champion to support & mentor)

OutputsAnalyze approvalIsolate critical variablesRisk analysis

Regular

meetings with

Black Belt!Regular

meetings with

Black Belt!





OutputsIdentify and select solution(s)Value-added assessmentValidate new process capabilityPilot project

Regular

meetings with

Black Belt!Regular

meetings with

Black Belt!






OutputsControl indicatorsSolutions, mistake-proofingCommunication, training, SOP’s, etc

Regular

meetings with

Black Belt!Regular

meetings with

Black Belt!




WhoChampion (Black Belt support)

OutputsExecute Realize PlanNew leverage opportunityConfirm/report project benefitsProject Closure

Regular

meetings with

Black Belt!Regular

meetings with

Black Belt!




WhoExecutive leadership,

Champion, process owners

OutputsCommon best practicesStandardized practicesMaximize benefits of projects



Six Sigma Outside of theManufacturing Process?

Absolutely!



Transactions: “Sales, CS, HR, Finance…”trans·ac·tion Pronunciation Key (trn-skshn, -zk-)

n.

The act of transacting or the fact of being transacted.

Something transacted, especially a business agreement or exchange.

Communication involving two or more people that affects all those involved; personal interaction: “a rich sense of the transaction between writer and reader” (William Zinsser).

transactions A record of business conducted at a meeting; proceedings.

trans·action·al adj. Source: The American Heritage® Dictionary of the English Language, Fourth Edition

Copyright © 2000 by Houghton Mifflin Company. Published by Houghton MifflinCompany. All rights reserved.

Our (Six Sigma) Definition: The defect-free transfer and retention ofKNOWLEDGE!

Our (Six Sigma) Definition: The defect-free transfer and retention ofKNOWLEDGE!



A Transactional GoalQUALITY: To transfer or impart knowledge as required across the value stream without any loss or degradation of the original information or intent. (Goal: zero defects)

DELIVERY/CYCLE TIME: To ensure that the time lapsed during transfer does not impair other value-added processes or diminish the inherent value of the knowledge being imparted. (Goal: Instantaneous)

COST: To minimize the cost of the transaction (knowledge transfer) without adversely affecting quality or delivery criteria. (Goal: zero cost)

“What customer’s want is simple: They want it NOW, they want it PERFECT, and they want it FREE!”

Robert RodinCEO, Marshall Industries

“What customer’s want is simple: They want it NOW, they want it PERFECT, and they want it FREE!”

Robert RodinCEO, Marshall Industries



Transactional Tools• Project Charter/Mandate (scope, constraints, etc)

• Process mapping (step and flow format)• Customer surveys; Chi Square Analysis• Benchmarking• Work order travelers, interviews, historical data• Attribute Data R & R (MSA)• Process capability and entitlement assessments• Cause & Effect (Ishikawa, fishbone)• Characteristic Selection Matrix (CSM)• Pareto Charts, Histograms (visualization)• Failure Mode & Effects Analysis (FMEA)• Quality Function Deployment (QFD)• Regression, Binary Logistic Regression• Piloting (alternative to DOE) DFSS!DFSS!



Open Forum – Q & A



For additional information about Six Sigma or Lean Sigma, or if you would like to obtain additional copies of this presentation, please contact:

E-Zsigma (Canada) Inc.One Dundas Street WestSuite 2500Toronto, OntarioCanada M5G 1Z3Ph: 416-593-8026www.e-zsigma.com

http://www.e-zsigma.com/

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Six Sigma Performance Workshop