Six Sigma Strategies

Six Sigma StrategiesPresenter: Kathy D. Pack, CPP

Payroll Manager, National Federation of Independent Business

Tennessee Statewide Payroll Conference

“Payroll – Always on My Mind”

Six Sigma Six Sigma “To apply Six Sigma to your business and produce the best results, you need to understand what Six Sigma is, the principles of Six Sigma and DMAIC problem solving method. The correct tools and use of Six Sigma methods will keep your data dependable and reusable.”

Six Sigma For Dummies, 2nd Edition; Craig Gygi, Bruce Williams, Stephen R. Covey

AgendaAgenda• The Basics: What is Six Sigma• The History of Six Sigma• Six Sigma Principles• Six Sigma Methodology • Six Sigma Tools• Key Roles for Six Sigma

What is Six Sigma?What is Six Sigma?• A problem solving methodology for reducing

mistakes and maximizing value. Six sigma has become a symbol of quality.

• Statistical term for 3.4 defects per a million opportunities, which translates to 99.9997% error free.

• Sigma represents the variation around the mean.o The mean of a process is the average outcome of a number of

repetitions.o Variation is when a process is reapeated many times and the

outcome differs with each repetition.

What is Six Sigma?What is Six Sigma?

• The Sigma level of a company or department indicates the percentage of defects in a product or service or the number of defects per one million opportunities.

• The goal of Six Sigma stratedgy is to reduce variation so that the opportunity for error is reduced, increasing quality and productivity; to be as perfect as practically possible.

• Once a precise narrowly defined term that has evolved over the years to represent a number of concepts:

What is Six Sigma?What is Six Sigma?

o Six Sigma Improvement: Key outcomes of a business or work processes are improved drastically, usually 70% or greater.

o Six Sigma Performance: A statistical term for a process that produces fewer than 3-4 defects per million opportunities.

o Six Sigma Development: The rollout of Six Sigma methodology across an organization, with assigned pratices, roles and procedures according to generally accepted standards.

o The Six Sigma Tool Set: The collection of methods and tools including statistics and analytics that practitioners use to consistently achieve break through levels of improvement.

• A data-driven, problem solving methodology of Define-Measure-Analyze-Improve-Control (DMAIC).

The History of Six SigmaThe History of Six Sigma• The Six Sigma methodology was formalized in the mid-1980’s at Motorola.

• This organization combined new theories and ideas with basic principles and statistical methods that had existed in the quality engineering domain for decades.

• They enhanced these building blocks using business and leadership principles to form the basis for a complete management system.

• This resulted in staggering increases in quality levels for many of Motorola products.• Then president Robert Gavin began to share Motorola’s Six Sigma stradogies and by the mid -1990’s

corporations like Texas Instruments, Allied Signal, General Electric, Ford, and Sony; began to have similiar results.

• The root of Six Sigma can be tracted back to early quality concepts and even earlier statistical theories.

• Dr Joseph Juran: • Developed the Quality Trilogy: 1. Quality planning- provide a system that is capable of meetin quality

standards. 2. Quality control- Used to determine when corrective action is required. 3. Quality improvements- improvements lead to better control and quality. (a better way of doing things)

The History of Six SigmaThe History of Six Sigma

• The engineers at Motorola set up a scale to evaluate the quality of a process based on the number of defects.

Sigma Level

DPMO % Defects % Success

1 691,462 69% 31%

2 308,538 31% 69%

3 66,807 6.7% 93.3%

4 6,210 .62% 99.38%

5 233 .023% 99.977%

6 3.4 .00034% 99.99966%

The Six Sigma Scale


• The root of Six Sigma can be tracked back to early quality concepts and even earlier statistical theories. Forefather’s of Six Sigma:

• Dr Joseph Juran: • Developed the Quality Trilogy: 1. Quality planning- provide a

system that is capable of meeting quality standards. 2. Quality control- Used to determine when corrective action is required. 3. Quality improvements- improvements lead to better control and quality. (a better way of doing things)

• 80/20 rule; 80% of problems are caused by 20% of potential causes. (few, 20% are vital, many, 80% are trivial).

• Dr. W. Edward Deming: • Wrote 14 Points and Seven Deadly Sins of Top Management

which describes the 7 most common barriers that management faces to improve effectiveness and continued improvement. (all efforts on a single goal).

• Created the PSDA Cycle: Plan, Do, Study, Act.


• Dr. Walter Shewhart:• Developed the Statistical Control Process (SCP): In order for a

process to be most economical it must be brought into a state of control where the only variation is random.

• Differentiated between assignable and chance cause variation: Assignable cause variation is a variation that can be traced to a root cause. Chance cause variation can’t traced back to a cause and connot be controlled.

• Dr. Genichi Taguchi: • First person to equate qualtiy with cost.• Described processes in terms of “noise” and “signal”: processes

are influenced by external factors called “noise”. You must Identify and eliminate “noise” from the process or “signal”. Systems and processes should be designed to withstand “noise” and still produce a quality product.

• Developed the quality loss function: how money is lost because of variability in a process.


• Dr. Kaoru Ishikawa:• Developed the Company Wide Quality Control method

(CWQC): continued customer service, customer should receive continued customer service even after receiving the product.

• Developed the cause-and-effect diagram for process improvement (Ishikawa or fishbone diagram) used to find the root of process imperfections.

• Dr. Armand Feigenbaum: • Promoted the performance goal of zero defects.• Believed in the concept of a “hidden plant”; so much work is

done correcting mistakes that there is a “hidden plant” within a factory.


• Philip Crosby:• Made Six Sigma concepts accessible to ordinary managers.

Key role in spreading Six Sigma and it’s methodology.• Developed the four absolutes of quality management:

DIRFT; doing it right the first time. 1. quality means conformance to requirements. 2. quality comes from error prevention. 3. standard must be zero defects. 4. should be measured in terms of price of nonconformance (cost of failure)

Six Sigma Principles Six Sigma Principles • Six Sigma is based on a handful of fundamental

principles:o Y=f(X) + ε: All outcomes and results (the Y) are

determined by inputs (the Xs) with some degree of uncertainty (ε)

Six Sigma Principles Six Sigma Principles

o To change or improve results (the Y), you have to focus on the inputs (the Xs), modify and control them.

o Variation is everywhere, and it degrades consistent good performance. Your job is to first find it and then minimize it.

o Valid measurements and data are required foundations for consistent breakthrough improvement.

o Only a critical few inputs have signicant effect on the output. Concentrate on the critical few.

o Every decision and conclusion has a risk (ε), which must be weighed against the context of the decision.

MethodologyMethodology

• DMAIC: Define, Measure, Analyze, Improve, Controlo Six Sigma Improvement Methodology

• DMADV: Define, Measure, Analyze, Design, Verifyo Creating new processes which will perform at Six Sigma


• DMAIC: Define, Measure, Analyze, Improve, Controlo Define: Set the context and objectives for your

improvement project. Consistent with customer demands and business strategy.

o Measure: Determine the baseline performance and capability of the process or system you are improving.

o Analyze: Use data and tools to understand the cause-and –effect relationships in your process or system. Are you meeting customer demands.

o Control: Establish plans and procedures to ensure that your improvements are sustainable.


• DMADV: Define, Measure, Analyze, Design, Verifyo Define: Set the context and objectives for the NEW project.

What is being designed and why. Consistent with customer demands and business strategy. Create a project team.

o Measure: Translate customer requirements into project goals. Set performance goals for the project. Develop risk assessment.

o Analyze: Develop CTQ’s (Critical to Quality Tree) Review risk assessment. Set project schedule.

o Design: Develop models and project plans, set system parameters, create processes around your project design.

o Verify: Compare product to internal specifications. Document, Document, Document. Review documentation to ensure your project meets the needs of the customer.

Six Sigma ToolsSix Sigma Tools• Having the right tools and knowing how to apply them to your

project will help you produce accurate, acceptable and reusable outcomes.

• Below is an overview of the Six Sigma Landscape:Project Selection

Problem Statement

Objective Statement

QTC Tree (Critical to Quality)

VOC Data (voice of the customer)

Data Audit

Attribute Measurement Analysis

Gauge Repeatability & Reproducibility (R&R)

As Is Performance Baseline

Process Flowcharting/Mapping

Defi

ne

Measu

re

Six Sigma ToolsSix Sigma ToolsInput (X) Identification

SIPOC Diagram – Suppliers, Inputs, Process, Outputs, Customers

Affinity Diagram – BrainstormingFishbone Diagram – (Ishikawa Diagram) Value Add/Non Value Add Analysis

Input (X)FunnelingCause-Effect (C-E)/X-Y Matric AnalysisFailure Mode Effects Analysis (FMEA)

Basic StatisticsMean (average), Mode (most frequent)

Median (mid range)Range (R), Standard Deviation (σ)

Graphical AnalysisDot Plots/HistogramsBox & Whisker PlotsScatter (X-Y) Plots

Capability AnalysisSigma ScoreDefect Rate Metrics (DPU, DPO, DPMO,

DPPM)Yield Metrics

An

alyze

Six Sigma ToolsSix Sigma Tools

Analyze problem

Cause & Effect

Identify Root Causes of Defects

Verify Root Causes

Quantify Root Causes

Process Management Summary

Process Control Plan

Quantify Financial Results

Present Final Project Results

Close Project

An

alyze

Con

trol


DMADV- Define, Measure, Analyze, Design, Verify

Six Sigma design for new projects.


Key Roles for Six SigmaKey Roles for Six Sigma• Executive Leadership- Senior executive who sponsors the overall

Six Sigma initiative.• Champions-Middle or senior-level executive who sponsors a

specific Six Sigma project, ensuring that resources are available and cross-functional issues are resolved.

• Black Belt-Full-time professional who acts as a team leader on Six Sigma projects. Typically has four to five weeks of classroom training in methods, statistical tools and sometimes team skill

Key Roles for Six SigmaKey Roles for Six Sigma

• Master Black Belt- Highly experienced and successful Black Belt who has managed several projects and is an expert in Six Sigma methods/tools. Responsible for coaching/mentoring/training Black Belts and for helping the Six Sigma leader and Champions keep the initiative on track.

• Green Belt-Part-time professional who participates on a Black Belt project team or leads smaller projects. Typically has two weeks of classroom training in methods and basic statistical tools.

• Team Member-Professional who has general awareness of Six Sigma (through no formal training) and who brings relevant experience or expertise to a particular project.

Q&AQ&A

Documents

Six Sigma Strategies