Six Sigma Introduction
Supply Chain Leadership
Committee
Nashville, TN
November 4, 2005
Steve Freudenthal
Milliken & Company
Six Sigma Introduction
1. Six Sigma Definition
2. Evolution of Six Sigma
3. The Six Sigma Process Today
4. The DMAIC Process
5. Consultant Selection
Key Principles of Six Sigma at Xerox
Everything starts with the customer.
The infrastructure for cultural change is the most powerful contribution of
Six Sigma.
Decisions about which projects to pursue must be based at least in part
on the potential impact on net present value.
Sustained improvement is possible only with management
engagement.
CEO goals are translated to frontline projects and coordinated through
an organization of people and technical resources.
A standard problem-solving process and associated tool set provides
the means for basing decisions on data.
Quality Initiatives
?
Six Sigma Quality
Lean Manufacturing
ISO 9000:2000
Supply Chain Management
Total Productive Maintenance
Malcolm Baldrige National Quality Award
Theory of Constraints
Reengineering
Continuous Improvement/Kaizen
ISO 9000 Standards
Quality Circles
Statistical Quality Control
What does “Six Sigma” mean?
Phase I
1.
2.
3.
4.
5.
6.
Early 1980’s
Pioneered at Motorola
Statistical approach
Measured DPMO
Variation is the enemy
Focused on:
• Elimination of defects
• Improving product and service quality
• Reducing cost
• Continuous process improvement
What does “Six Sigma” mean?
Phase II
1. Mid 1990’s
2. Revised by Jack Welch at General Electric
3. Linked Six Sigma to business strategy and customer
needs
4. Strong measurement on bringing dollars to the bottom
line
5. Strong financial community involvement
6. Project driven
7. High potentials selected to be Black Belts
8. Black Belts expected to deliver $250,000/year to bottom
line (hard dollars)
9. Black Belts promoted up after two years
10. All senior leaders trained (Green Belt)
11. Projects are sponsored by business leadership (Top
Down)
12. 2% of management committed full-time
What does “Six Sigma” mean?
Phase III
1.
2.
3.
4.
2000’s
Lean Six Sigma
Caterpillar, Xerox, DuPont
Combined lean manufacturing techniques and Six
Sigma
5. Benefit: High speed, low cost
Six Sigma Savings Averages by
Area
$480K
500
$500K
$450K
400
300
$180K
200
100
0
$100K
$35K
Manufacturing PDfSS Project
Project
Back Office
Project
SSA Project
DfSS Project
Global Project
Roles and Responsibility
Deployment
Manager
•
•
Identification and Prioritization of Projects by
Division
Assign and Review Activities of Black Belts
Champions/
Sponsors
•
•
Facilitate Project Implementation
Key Stakeholder in Project Success
Black Belts
•
•
•
•
Lead 4-6 strategic improvement projects each
year
Expert in Six Sigma techniques
Help local organization in Six Sigma disciplines
Full-Time Position
Master Black
Belts
•
•
•
Mentor/coach Black Belts
Teach Six Sigma techniques
Full-time Corporate Position
Green Belts
•
•
Domain Experts
20-30% on one Project
Johnson Controls Inc.
Six Sigma Project Prioritize/ Select Scoring Rules
Score
$ Savings
(Hard/Annual
Time
(Duration)
Effort
(# people & $;
Expense $; Cap $)
Success factor
(1 – risk)
9
>$250 K
(High)
< 4 months
(short)
<3
(Small)
High
$100 – $250 K
(Moderate)
4 - 8 months
(moderate)
4–6
(Moderate)
Moderate
$50 - $100 K
(Okay)
8 – 12 months
(long)
6 – 10
(large)
Small
<$50K
(Small)
> 12 months
(very long)
> 10
(very large)
Low
7
3
1
No capital; No IT; No Suppliers
Small work group affected; Short Duration;
Small Project Team
No capital; No IT; Some Suppliers
Multiple work groups affected;
Moderate Duration; Small Project Team
Some capital; Some IT;
Numerous Suppliers; Many work groups;
Long Duration; Moderate Project Team Size
Significant capital; Significant IT;
Very many Suppliers Very Many work groups
Very Long Duration; Large Project Team Size
Example
Project A
Project B
Total Score
9
7
3
3
22
$300 K
7 months
8 person team
Some capital, some IT, many work groups
affected, moderate duration
3
9
9
9
$ 75K
4 months
2 person team
No capital, no IT, small project team
30
Improvements Start with High Value Projects
• Customer Issues / Opportunities
• Business Strategy
• Goals / Objectives
• Priorities
Project
Candidates
Prioritized by
Management
Team
Project Selection
• Structured Process
High
• Led by Deployment
Managers
Med
• Based on Benefit / Effort
Analysis
Low
BENEFIT
Structured approach to project selection
• Links Business Strategy
& Priorities
• Leadership Accountable
for Prioritization
EFFORT
Low
Med
High
Xerox
Six Sigma Improvement Model
“DMAIC” Process
• Define – describe the process,
problem, opportunity
• Measure – gather data
• Analyze – listen to the data
• Improve – develop solutions,
design processes
• Control – plan for stability
Six Sigma Design Model
“DMADV” Process
• Define – describe the process,
problem, opportunity
• Measure – gather data
• Analyze – listen to the data
• Develop – create the solution
• Verify – does the solution work?
Define
1.0
Define
Opportunities
Objective
2.0
Measure
Performance
3.0
Analyze
Opportunity
Main Activities
4.0
Improve
Performance
5.0
Control
Performance
Potential Tools and Techniques
•Validate/
•To identify and/or
validate the
improvement
opportunity,
develop the
business
processes, define
critical customer
requirements,
and prepare
themselves to be
an effective
project team.
Identify Business
Opportunity
•Validate/
Develop Team
Charter
•Identify and Map
Processes
•Identify Quick
Win and Refine
Process
•Translate VOC
•Develop Team
Guidelines &
Ground Rules
Gap
Project Focus
$$
Sigma Goal (CCR)
CCRs
Action Plan
Team Charter
TASKS
Business Case
TASKS
Opportunity Statement
Goal Statement
Project Scope
Project Plan
Team Selection
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
DUE
DUE
STATUS &ACTIONS
STATUS &ACTIONS
Tools* are Essential, but Not Sufficient
Define
• Value
Stream
Measure
• Operational
Analyze
• Pareto
Charts
• C&E Matrix
• Fishbone
Diagrams
• Brainstorming
• Detailed ‘As-Is’
Process Maps
• Basic Statistical
Tools
• SupplyChainAccelera
tor Analysis
• Non Value-Added
Analysis
• Hypothesis Testing
• Confidence Intervals
• FMEA
• Simple & Multiple
Regression
• ANOVA
• Queuing Therory
• Analytical Batch Size
Improve
• Brainstorming
Map
Definitions
• Benchmarking
• Various Financial
• Data Collection
• Process
Analysis
Plan
Improvement
• Charter Form
• Pareto Chart
Techniques
• Multi-Generational
• Histogram
• Line Balancing
Plan
• Box Plot
• Process Flow
• Stakeholder
• Statistical
Improvement
Analysis
Sampling
• Constraint
• Communication
• Measurement
Identification
Plan
System Analysis
• Replenishment Pull
• SIPOC Map
• Setup Reduction
• Sales & Operations
• High-Level
• Generic Pull
Planning
Process Map
• Kaizen
• Poka-Yoke
• Non-Value
• Control Charts
• FMEA
Added Analysis
• Process
• Solution Selection
• VOC and Kano
Capability, Cp &
Matrix
Analysis
Cpk
• ‘To-Be’ Process
• Lean Quality
Maps
Function Deploy• Piloting and
ment (QFD)
Simulation
• RACI & Quad
* Tool array adapted from Lean Six Sigma for Service by Michael George
Charts
Xerox
Control
• Control
Charts
• Standard
Operating
Procedures
(SOP’s)
• Training Plan
• Communication
Plan
• Implementatio
n Plan
• Visual Process
Control
• MistakeProofing
• Process Control
Plans
• Project
Commissioning
• Project
Replication
• Plan-Do-CheckAct Cycle
Measure
1.0
Define
Opportunities
2.0
Measure
Performance
Objective
• To identify critical
measures that are
necessary to evaluate the
success, meeting critical
customer requirements
and begin developing a
methodology to
effectively collect data to
measure process
performance.
• To understand the
elements of the six sigma
calculation and establish
baseline sigma for the
processes the team is
analyzing.
3.0
Analyze
Opportunity
4.0
Improve
Performance
Main Activities
• Identify Input,
Process, and Output
Indicators
• Develop Operational
Definition &
Measurement Plan
• Plot and Analyze Data
• Determine if Special
Cause Exists
• Determine Sigma
Performance
• Collect Other Baseline
Performance Data
5.0
Control
Performance
Potential Tools and
Techniques
Checksheets
Input
Process
Output
CCR
A1
A1
A1
D1
D1
D1
D2
D2
D2
A2
A2
A2
Input Indicator
A
A
A
B
B
B
Process Indicator
Process Indicator
UCL
Output Indicator
Sigma=
Sigma=
X
CCR
X
LCL
Gap
Analyze
• Stratify Process
• Stratify Data & Identify
Indicators &
Problem
Statement
(effect)
50%
Problem
Statement
25%
Cycle Time
30
20
10
0
0
5
10
Approval Time
FMEA Date: (original)
(Revised)
Black Belt:
Page:
Process
Item
Process
Steps
Potential
Failure
Mode
Potential
Effects of
Failure
of
Actions
Potential
Cause(s)
of Failure
Current
Controls
Total Risk Priority
Recommended
Action
Results
Responsibility Action
and Target
Taken
Completion
Date
Occurrence
Process/Product:
FMEA Team:
Detection
Specific Problem
• Develop Problem
Statement
• Identify Root Causes
• Design Root Cause
Verification Analysis
• Validate Root Causes
• Comparative Analysis
• Sources of Variation
Studies
• Failure Modes & Effects
Analysis
• Regression Analysis
• Process Control
• Process Capability
• Design of Experiments
Quantified Root Causes
Severity
• To determine true
sources of variation and
potential failure modes
that lead to customer
dissatisfaction.
Potential Tools and Techniques
Risk Priority
• To identify and validate
the root causes that
assure the elimination of
“real” root causes and
thus the problem the
team is focused on.
Main Activities
Detection
• To stratify and analyze
the opportunity to
identify a specific
problem and define an
easily understood
problem statement.
5.0
Control
Performance
4.0
Improve
Performance
Analyze
Opportunity
Occurrence
Objective
3.0
Resulting Risk Priority
Risk Priority
2.0
Measure
Performance
Severity
1.0
Define
Opportunities
15
4.0 Improve Performance
1.0
Define
Opportunities
Objective
• To identify,
evaluate, and
select the right
improvement
solutions. To
develop a change
management
approach to assist
the organization in
adapting to the
changes
introduced
through solution
implementation.
2.0
Measure
Performance
3.0
Analyze
Opportunity
Main Activities
• Response Surface
Methods
• Generate Solution
Ideas
• Determine Solution
Impacts: Benefits
• Evaluate and Select
Solutions
• Develop Process
Maps & High Level
Plan
• Develop and Present
Storyboard
• Communicate
Solutions to all
Stakeholders
4.0
Improve
Performance
5.0
Control
Performance
Potential Tools and Techniques
Control
5.0
4.0
Improve
Performance
Control
Performance
Potential Tools and Techniques
Main Activities
Error Modes and Effects Analysis
4.2.1
4.2.2
4.2.3
4.2.4
4.2.5
Process
Step
Description:
Degree of Effect
Error
Cause
Assemble all
outbound
containers in
staging area
• Back injury
during lift
• Foot and toe
injury from
dropped
cont.
Determine
correct
pallet size
• Non-standard • Vendor
pallets kept
pallet used
Position
empty pallet
in marked
area of
loading dock
• Full pallets
are rotated
90° by hand
Stack
outbound
containers on
pallet not to
exceed two
high
• First layer
not
completed
before
starting
second layer
Load pallets in • Tie down
vehicle with
lines
lift truck and
damage bulk
secure
mail when
tightened
Effect
• Carry-all
• Back
not available
injuries,
• Lifting
lost time,
guidelines
insurance
not followed
expense
• Container
stack over
end of
pallet and
fall when
being lifted
• Pallet set 90° • Back and
off when
hand injuries,
positioned lost time,
lift truck
insurance
can’t access
expense and
rework
• Stack
• Containers
guidelines
fall while
not used
being lifted
• Tie down
guidelines
not clear
• Injured
fingers,
damaged
outbound
mail
0
+
2
2
4
3
Total
Solution
• Verify Reduction in Root
Cause Sigma Improvement
Resulted from Solution
• Identify if Additional
Solutions are Necessary to
Achieve Goal
• Identify and Develop
Replication &
Standardization
Opportunities
• Integrate and Manage
Solutions in Daily Work
Processes
• Integrate Lessons Learned
• Identify Teams Next Steps
& Plans for Remaining
Opportunities
Process Control System
Error Modes and Effects Analysis
Error Mode Effect Analysis
(EMEA)
Severity
• Develop Pilot Plan & Pilot
Frequency
• To understand the
importance of
planning and
executing against
the plan and
determine the
approach to be
taken to assure
achievement of
the targeted
results. To
understand how to
disseminate
lessons learned,
identify
replication and
standardization
opportunities/
processes, and
develop related
plans.
3.0
Analyze
Opportunity
Detection
Objective
2.0
Measure
Performance
Step#
1.0
Define
Opportunities
9
Occurrence Prevention
(Countermeasure)
•
•
Purchase two new carry-alls for
mailroom
Include topic in new safety film
• Inspect for non-standard pallets and
return to vendors
2
+
2
4
1
1
6
2
+
3
5
4
1
10
0
+
1
1
1
1
3
0
+
1
1
2
1
4
• Update and clarify pallet placement
procedures
• Include topic in new safety film
• Update and clarify loading guidelines
• Update and clarify loading guidelines
Implemented Solution
Project Workplan
CCR
CCR
Gap
X
Sigma Goal (CCR)
Gap
Six Sigma DMAIC Projects
1.0
Define
Opportunities
1.0
Define
Opportunities
2.0
Measure
Performance
2.0
Measure
Performance
3.0
Analyze
Opportunity
3.0
Analyze
Opportunity
4.0
Improve
Performance
4.0
Improve
Performance
5.0
5.0
Control
Control
Performance
Performance
5.0
5.0
Control
Control
Performance
Performance
Process cannot be improved:
1. Abort project
2. Recharter as Design Project
Business Processes
are here
Major
Nothing Gaps
Well
Deployed
No Major
Gaps
Fully
Deployed
Manufacturing Performance is here
•Nothing
D
E
P
L
O
Y
M
E
N
T
•Buzz (10+)
•Some Momentum
•More Pull Than Push •Thriving
•Push (5)
•Balance of Push/Pull •Internal & External
•PULL!
•Skeptics (50%)•Not at Tipping Point
Positioning
•Drives the Way
•Pilots are Positive (80%)
•Past the Tipping Point We Work
•Ubiquitous
“ENERGY & WILL”
Key Learnings
50% of all companies attempting
to implement Six Sigma failed
after the first two years of
implementation.
Long Term Goal – Sustained Commitment &
Results
Sustained
Commitment
Six Sigma
Net
Business
Benefit
A

Business integration into
“how we work”

Project selection link to
business strategies

Project selection link to
Customer Value

Ability to change Culture &
Leadership Behavior

Full Value-Chain
engagement

Ability to track results

Integrating DfLSS
C
F
0
1
Initial Leadership
Commitment
Key factors differentiating
“A” curve from “F” curve
2
As many as
50% end up
here at “F”
3
Year
4
*
* Chart adapted from Strategic Six Sigma: Best Practices from
the Executive Suite by Dick Smith and Jerry Blakeslee
Xerox
Reasons Six Sigma Deployments Fail
1.
2.
3.
4.
5.
6.
7.
8.
Apathy from senior leadership
Training not connected to projects
Projects not connected to strategy
Projects only focused internally
Selecting “available” people
Part time Black Belts
No financial validation to bottom line
People not recognized for their
contributions
A Six Sigma Deployment Cannot Be Done
Without Consultants
• Training Materials
• Testing Materials
• Professional Educators
• Six Sigma Project Management Expertise
(Master Black Belts)
• Credibility With Top Management
• Can “Jump Start” The Deployment
If properly driven by Top Management,
Six Sigma can have a dramatic impact
on a company’s culture and how it aligns
itself with its customers
Thank
You!!