What Six Sigma is Not
Just about statistics
• A quality program
• Only for technical people
• Used when the solution is known
• Used for “firefighting”
•
Why Companies Need Six Sigma
1.
Reduces dependency on “Tribal Knowledge”
- Decisions based on facts and data rather than opinion
2.
Attacks the high-hanging fruit (the hard stuff)
- Eliminates chronic problems (common cause variation)
- Improves customer satisfaction
3.
Provides a disciplined approach to problem solving
- Changes the company culture
4.
Creates a competitive advantage (or disadvantage)
5.
Improves profits!
How good is good enough?
99.9% is already VERY GOOD
But what could happen at a quality level of 99.9% (i.e., 1000 ppm),
in our everyday lives (about 4.6)?
•
4000 wrong medical prescriptions each year
•
More than 3000 newborns accidentally falling
from the hands of nurses or doctors each year
•
Two long or short landings at American airports each day
• 400 letters per hour which never arrive at their destination
How can we get these results?
•
13 wrong drug prescriptions per year
•
10 newborn babies dropped by doctors/nurses per year
•
Two short or long landings per year in all the airports in the U.S.
•
One lost article of mail per hour
Six Sigma as a Metric

Sigma =  = Deviation
( Square root of variance )
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
Axis graduated in Sigma
between + / - 1
68.27 %
between + / - 2
95.45 %
45500 ppm
between + / - 3
99.73 %
2700 ppm
between + / - 4
99.9937 %
63 ppm
between + / - 5
99.999943 %
0.57 ppm
between + / - 6
99.9999998 %
0.002 ppm
© 2004 Superfactory™. All Rights Reserved.
result: 317300 ppm outside
(deviation)
Six Sigma Concept
Every Human Activity Has Variability...
Customer
Specification
Customer
Specification
defects
Target
Reducing Variability is the Key to Understanding Six Sigma
Effect of 1.5 Sigma Process Shift
© 2004 Superfactory™. All Rights Reserved.
Six Sigma: Statistically Visualized
LOWER SPEC. LIMIT
1.5σ shift
6σ
5σ
UPPER SPEC. LIMIT
PROCESS MEAN
4σ
3σ
2σ
SIX SIGMA PROCESS
1σ
0
1.5σ shift
1σ
2σ
3σ
4σ
5σ
6σ
Six Sigma Concept
Parking Your Car in the Garage
Has Variability...
Customer
Specification
defects
Target
Customer
Specification
defects
Six Sigma Concept
Before
3
A 3  process because 3 standard deviations
fit between target and spec
Target
Customer
Specification
1
2
3
After
Target
By reducing the variability,
we improve the process
6!
1
Customer
Specification
No Defects!
3
6
What’s Wrong With 99% Quality?
3.8 Sigma
99% Good
Six Sigma
99.99966% Good

20,000 articles of mail lost per hour

7 articles of mail lost per hour

Unsafe drinking water for almost 15
minutes each day

Unsafe drinking water for 1 minute
every 7 months

5,000 incorrect surgical operations
per week

1.7 incorrect surgical operations
per week

2 short or long landings at most major
airports each day

1 short or long landing at most
major airports every 5 years

200,000 wrong drug prescriptions
dispensed each year

68 wrong drug prescriptions
dispensed each year
Sigma and PPM
PPM
2
308,537
80
800000
70
4
66,811
6,210
60
% Change
3
700000
From 5 to 6
600000
50
500000
PPM
% Change
40
400000
From 4 to 5
30
300000
20
5
233
200000
From 3 to 4
10
100000
From 1 to 2
0
6
Process
Capability
3.4
0
1
2
3
4
Process Sigma
Defects per Million
Opportunities
Focusing on  requires thorough process
understanding and breakthrough thinking
5
6
PPM

Six Sigma as a Philosophy
 is a measure of how much
variation exists in a process
Prevention &
Appraisal
Costs
Old Belief
Old Belief
4
High Quality = High Cost
Quality
Internal &
External
Failure Costs
New Belief
High Quality = Low Cost
Costs
Costs
Internal &
External
Failure
Costs
Prevention &
Appraisal
Costs
4
New Belief
5
6
Quality
Definitions
•  – Standard Deviation, a measure of variability
•
Six Sigma – A quality improvement philosophy that focuses on
eliminating defects through reduction of variation in a process
•
Defect – A measurable outcome that is not within acceptable
(specification) limits
TQM Versus Six Sigma
TQM
Six Sigma
A management
philosophy of quality
improvement
Encourages involvement
of all employees
A philosophy that focuses
on defect reduction and
cost reduction
Relies on a selected group
of highly-trained employees
Senior management
provides direct support
Senior management is held
accountable for results
Key Success Factors for
Six Sigma
• Committed leadership from top management
• Integration with existing initiatives, business
strategy, and performance measurement
• Process thinking
• Disciplined customer and market intelligence
gathering
• A bottom-line orientation and continuous
reinforcement and rewards
• Training
Six-Sigma Metrics –
Measuring Defect Rate
•
Defects per unit (DPU) = number of defects discovered  number of
units produced
•
Defects per million opportunities (DPMO) = number of defects
discovered  opportunities for error  1,000,000
Estimating Defect Rate – Process
Capability Index (Cp)
•
USL/LSL : Upper & Lower Specification Limit
•
Cp = (USL –LSL) / (6)
•
Example : Time to process a student loan application (Standard = 26
working days)
•
Specification Limits : 20 to 32 working days
•  :2 working days
•
Cp = (32 – 20)/ (6*2) = 1.00 (Three Sigma)
Cp Index and DPMO
Cp Index
DPMO
1
2,700
1.33
63
1.5
6.8
2
0.002
Estimating Process Capability Index
from A Sample - Cpk Index
•
XBAR : average outcome from a sample
•
S : standard deviation from a sample
•
Cpk = min { (USL-XBAR) / (3S),
(XBAR-LSL) / (3S) }
•
Example : XBAR = 25 days, S = 3 days
•
Cpk = min { (32-25)/(3*3), (25-20)/(3*3)}
= min {0.77, 0.55} = 0.55
GE’s Six-Sigma
Problem Solving Approach
1.
Define
2.
Measure
3.
Analyze
4.
Improve
5.
Control
DMAIC - Define
• Identify customers and their priorities
• Identify business objectives
• Select a six sigma project team
• Define the Critical-to-Quality (CTQ’s)
characteristics that the customers consider to
have the most impact on quality
DMAIC - Measure
• Determine how to measure the processes
• Identify key internal processes that influence
CTQ’s
• Measure the defect rates currently
generated relative to those processes
DMAIC - Analyze
• Determine the most likely causes of
defects.
• Identify key factors that are most likely to
create process variation.
DMAIC - Improve
• Identify means to remove causes of the defects.
• Confirm the key variables and quantify the effects
on CTQ’s
• Identify maximum acceptable ranges for the key
variables and a system to measure deviations of
the variable
• Modify the process to stay within the acceptable
ranges
DMAIC - Control
• Determine how to maintain the improvement
• Put tools in place to ensure that the key
variables remain within the maximum
acceptable ranges under the modified
process
Six Sigma Methodology - DMAIC
Collect relevant data about
Determine the optimum values for
the process and the problem
key contributing process inputs
IMPROVE
MEASURE
D
DEFINE
M
A
ANALYZE
I
C
CONTRO
L
Define the problem and the ideal
Identify the cause-effect relationship
Establish standards to sustain
in terms of the target to achieve
between inputs and outputs.
improvements in the long run.
Why Use Sigma as a Metric?
 Focuses on defects
• Even one defect reflects a failure in your customer’s eye
 Establishes a common metric to make comparisons easier
 Is a more sensitive indicator than percentage or average-based metrics …
29
Where Did 6σ Come From?
•
Started at Motorola Corporation in the mid-1980’s, when the
company discovered that products with a high first-pass yield
(i.e., those that made it through the production process defectfree) rarely failed in actual use, resulting in higher customer
satisfaction.
•
Popularized by former General Electric CEO Jack Welch’s
commitment to achieving Six Sigma capability (realized $12
Billion savings over 5 years). "Six Sigma is a quality program that
improves your customers' experience, lowers your costs and builds
better leaders."
Isn’t 6σ Just For Manufacturing?
•
No, Six Sigma is good for ANY business.
•
•
•
Has been successful in industries such as banking, retail, software, and
medical
Has been successful in improving processes throughout operations,
sales, marketing, information technology, finance, customer services,
and human resources
Why?
•
Because every business suffers from the two key problems that Six
Sigma can solve: defects and delay
Six Sigma (6σ) Methodologies
Control Define
Improve
Measure
Analyze
Verify
Design
Define
Measure
Analyze
DMAIC: This method is used to improve the
current capabilities of an existing process. This is
by far the most commonly used methodology of
sigma improvement teams.
DMADV: This method is used when you
need to create or completely redesign a
process, product, or service to meet
customer requirements. DMADV teams
are usually staffed by senior managers
and Six Sigma experts.
32
Project Focus
Process
Characterization
Define
The right project(s), the right team(s)

Measure

Y


Process
Problems and
Symptoms
Process outputs
Response variable, Y
Analyze
Process
Optimization

Improve
X’s




Independent variables, Xi
Process inputs
The Vital Few determinants
Causes
Mathematical relationship
Control
Goal: Y = f ( x )
So, What is Lean?
•
The methodology of increasing the speed of production by
eliminating process steps which do not add value
• those which delay the product or service
• those which deal with the waste and rework of defects
along the way
34
Where Did Lean Come From?
•
Lean thinking originated at Toyota with the Toyota Production
System (TPS). The original ideas were formulated by Sakichi
Toyoda in the 1920s and 1930s, but only made the leap to full
implementation in the 1950s.
•
Many of the principles of lean came from a surprising source:
American supermarkets where small quantities of a vast selection
of inventory is replenished as customers "pull" them off the shelf.
Core Ideas of Lean
•
Determine and create value
•
•
Use “pull” instead of “push” systems to avoid overproduction
•
•
What does the customer want?
Inventories hide problems and efficiencies.
One piece flow
•
Make the work “flow,” so that there are no interruptions and no wasted
time or material
•
Eliminate the seven speed bumps (non-value adds) caused by
waste
•
Use the “five whys?” and Six Sigma problem solving to
eliminate defects
Six Sigma vs Lean Six Sigma: What’s the
Difference?
•
Six Sigma
•
Six Sigma was developed with a very specific goal: reduce variation and defect rates in
production processes through statistical analysis. To do this, Six Sigma uses one of two, 5-step
approaches – either the DMAIC or the DMADV method.
•
Both methods have their distinct uses. DMAIC stands for Define, Measure, Analyze, Improve,
and Control. This process involves identifying the problem you’re trying to solve, taking stock of
your current processes, identifying and implementing a solution, and maintaining that solution
in the future. This is perfectly suited for supply chain performance issues or when only
adjustments to the process are needed, not an entirely new function.
•
That’s where DMADV (Define, Measure, Analyze, Design, Verify) comes in. The first phases of
the project are the same, but the Design phase allows for the creation of an entirely new tool to
solve the problem. The Verify phase then focuses on ensuring that the new solution does, in
fact, continue to solve the problem.
•
Six Sigma, then, is all about monitoring the supply chain for defects, identifying issues, and
solving them as effectively as possible.
The Lean Method
•
The Lean method, on the other hand, is entirely focused on eliminating waste, providing
maximum value to customers with the lowest possible amount of investment. The term
Lean was first used to describe the Toyota Business System in the 1980’s, a business
philosophy that helped the company run at maximum efficiency. It involves every tier of an
organization, helping guide new processes and drive the allocation of resources. The
primary difference between Lean and Six Sigma is that Lean is less focused entirely on
manufacturing, but often shapes every facet of a business.
•
Lean Six Sigma combines these two approaches, which creates a powerful toolkit for
addressing waste reduction. As companies seek to understand where they may have
wasteful practices in place, the DMAIC method provides an excellent road map for
identifying and solving the problems they face. This synergy between methodologies
functions primarily to help eliminate the 8 kinds of waste, removing anything from a
process – whether its material, time, or effort – that doesn’t add value. The forms of waste
are:
The Seven Speed Bumps of Lean
Non-value added waste – is any activity which
absorbs money, time, and people but creates no
value.
1.
Over production which creates inventories that take up space and capital
2.
Excess inventory caused by over production
3.
Waiting for the next value-added process to start
4.
Unnecessary movement of work products
5.
Unnecessary movement of employees
6.
Unnecessary or incorrect processing
7.
Defects leading to repair, rework, or scrap.
The Antidote to Waste: The 5 S’s
1.
Sort
• Keep only what is needed
2.
Straighten
•
A place for everything and everything in its place
3.
Shine
• Clean systems and work area to expose problems
4.
Standardize
• Develop systems and procedures to monitor conformance to the first
three rules. (Six Sigma’s Define and Measure phases)
5.
Sustain
• Maintain a stable workflow. (Six Sigma’s Analyze, Improve, and Control
phases)
DMAIC VD DMADV
•
LSS prescribes an improvement process known as DMAIC (Define—Measure—
Analyze—Improve—Control). However, its application is limited to improving
existing processes. It doesn’t address the design of new products, services, or
processes.
•
For developing a new product, service or process, there’s a modified version
called DFSS (Design for Six Sigma). The process most often used in DFSS is
called DMADV (Define—Measure—Analyze—Design—Verify).
•
DMAIC is the more well-known and most-used LSS project method. DMAIC
focuses on improving an existing process
•
DMADV is focused on the process of designing a new product, service or process,
incorporating the following
Similarities of DMAIC and DMADV
•
Both DMAIC and DMADV:
•
Use structured methods to reduce variation and solve problems
•
Collect and analyze data to make informed decisions
•
Use teams to solve problems
•
Have a customer focus
•
Use many of the same tools
Differences of DMAIC and DMADV
•
DMAIC addresses the current process; DMADV addresses the design process.
•
DMAIC reduces/eliminates defects (reactive); DMADV prevents defects
(proactive).
•
DMAIC includes specific solutions; DMADV is part of the solution design process.
•
DMAIC includes controls to sustain the gains; DMADV includes verification and
validation of the finished design.
Comparison of Agile Scrum with Lean,
Kaizen or Six Sigma
The four highest precepts of Agile Scrum
are:
•
1.
People and interactions are more important than processes and tools
•
2.
Functioning results are more important than excessive documentation
•
3.
Cooperation with the customer is more important than contract negotiations
•
4. Adapting to changing circumstances is more important than stubbornly
following the plan
Similarities of Agile Scrum to Lean,
Kaizen and Six Sigma
•
Find and eliminate waste and bottlenecks
•
•
Focus on creating value for the customer
•
•
Permanent learning and reflection
•
•
Measurability and key performance indicators
•
•
Establish cooperation and communication
•
•
Mastering clock cycles
Comparison of Agile Scrum
with Lean, Kaizen and
Six Sigma
7 Basic Quality Tools
•
Check sheet
•
Fishbone diagram (cause and effect diagram, or Ishikawa diagram)
•
Histogram
•
Pareto chart
•
Control chart
•
Scatter diagram
•
Stratification
Check sheet
Fishbone diagram
Histogram
Pareto chart:
Control chart
Scatter diagram
What is meant by stratification?
Quality Control Tool w/ Example
SIX SIGMA BELT ROLES &
RESPONSIBILITIES
Organization for Six Sigma
• Project Champions – project selection and
management, knowledge sharing
• Master Black Belts – instructors, coaches,
technical leaders
• Black Belts – project team leaders and team
members
• Green Belts – project team members,
temporary team members
WHERE YOU START DEPENDS ON THREE
FACTORS
• Educational Background
• Recency
• Experience