1

LECTURE 1:
1 PRINCIPLES OF SIX
S GM
SIGMA

Textbook: An introduction to six sigma and process improvement

By James R. Evans and William M. Lindsay

Chapter1 Chapter 2
Chapter1,

INSE 6210 Total Quality Methodologies in Engineering

 Food for thought
g !
2

In 2007, Mattel took several of its Barbie and Polly Pocket products off the shelves
because of concerns over toxic lead paint and hazardous magnet parts
 Toyota’s
y faulty
yppedals
3

… Toyota on Jan. 21, 2010 issued a recall on 4.1 million

vehicles sold in the U.S. and Europe to fix faulty gas
pedals that have a tendency to get stuck, causing
unintended acceleration.

Source: http://www.time.com, Article name: Top 10 product recalls

Image: http://www.ridelust.com/toyota-backpedals-furiously-recalls-3-8m-vehicles-for-faulty-accelerators/
 China’s p
product safetyy recalls
4

… In 2008, China's
China s largest provider of milk powder
recalled 700 tons of baby formula after one child
died and more than 50 others developed p kidneyy
problems. Melamine, a chemical used in the making
of plastic, was found in the baby formula.

Source: http://www.time.com, Article name: Top 10 product recalls

 Definitions of quality
q y
5

… Traditional definition
† Quality means fitness for use

… Modern definition
† Quality is inversely proportional to variability

… Quality
Q lit iimprovementt iis th
the reduction
d ti off variability
i bilit
in processes and products
 Business view on quality
q y
6

… As a business performance metric, quality refers to

† Perfection

† Consistency

† Eliminating waste
† Compliance
p with policies
p and procedures
p
† Providing a good, usable product

† Doing
g it right
g the first time
† Delighting or pleasing customers

† Total customer service and satisfaction

 Design
g view on quality
q y
7

… From a design perspective, quality is a function of

specific, measurable variable(s) whose variation is
reflected in terms of difference in quality
q y

(a) (b)
 Customers view on quality
q y
8

… Customer perspective
† Fitness
for intended use
† Value with respect to price

… Customers
† External to company
† Internal to company

Delighted customers
 Operations
p view on quality
q y
9

… From an operations perspective, quality is

conformance to specifications (target values and
tolerances))
Tolerances
Target values

Nokia factory
 Processes
10

… Approcess is a sequence
q of activities intended to
achieve some result.

Inputs Outputs
Process

(Physical facilities, (products, services)

material, capital,
equipment,
i t people,
l
energy, etc)
 Process types
yp
11

… Value creation p
processes ((also called core p
processes))
† drive the creation of products and services
† are critical to customer satisfaction
† h
have a major j i
impact on the
h strategic
i goals
l off the
h
organisation.
† Example, design processes, Production/delivery processes

… Support processes
† provide
id infrastructure
i f t t f the
for th value-creation
l ti processes
† mostly driven by internal customer needs.
† Example, human resources, R&D, technology acquisition,
maintenance, Training.
 Process vs function
12

Processes and functions are not the same !

 Process improvement
p
13

… Processes can be improved in following ways:

† Enhancing value to the customer through new and
improved products and services
† Reducing errors, defects, waste, and their related costs

† Increasing productivity and effectiveness in the use of

all resources
† Improving responsiveness and cycle time performance
f suchh processes as resolving
for l i customer complaints
l i or
new product introduction
 Practice Exercise 1 – Process vs Function
14

Identify processes and functions. What are critical to quality parameters (CTQs) ?

Automobile Assembly Line

Image Source: http://smallcapworld.wordpress.com/2010/11/13/surging-auto-sales-lifting-smallcap-auto-industry-stocks/
 What is six sigma
g ?
15

… Six sigma can be best described as a business process improvement approach that
† seeks to find
f and eliminate causes off defects
f and errors,
† reduces cycle times and cost of operations,
† improves productivity,
† better meets customer expectations,
p and
† achieves higher asset utilization and returns on investment in manufacturing and service
processes.

… Six sigma is based on three key quality principles

† Focusing on customers
„ Critical to quality parameters (CTQs)
† Continuous improvement
† Employee participation and empowerment

… Six sigma is based on the philosophy of integrated systems based thinking

 Key
y concepts
p for six sigma
g
16

… Think in terms of keyy business p processes and

customer requirements with a clear focus on overall
strategic objectives.
… F
Focus on corporate sponsors responsible ibl f
for
championing projects, support team activities, help
to overcome resistance to change, g , and obtain
resources.
… Emphasize quantifiable measures such as defects
per million
illi opportunities
t iti that
th t can be
b applied
li d to
t allll
parts of an organisation: manufacturing,
engineering, software and so on.
 Key
y concepts
p for six sigma
g
17

… Ensure that appropriate metrics are identified early in

the process and that they focus on business results,
thereby providing incentives and accountability.
… Provide extensive training followed by project team
deployment to improve profitability, reduce non-value-
added
dd d activities,
i i i and d achieve
hi cycle
l time
i reductions.
d i
… Create highly qualified process improvement experts
who can apply improvement tools and lead teams.
teams
… Set stretch objectives for improvement.
 Historical evolution of six sigma
g
18

… Craftsmanship
… Industrial revolution
† manufacturing standard and interchangeable parts
… E l 20th century
Early t
† Creation of quality department (Bell System)
† Statistical quality control (Western Electric, led by Walter
Shewhart)
† American society for Quality
… Post world war II
† Kaizen (Dr. Joseph Juran, Dr. W.Edwards Deming)
† Japanese and German era on quality
 Historical evolution of six sigma
g
19

… US Quality revolution
† Xerox (1980s)
† Malcolm Baldrige National Quality Award
… Early successes in Quality Management
† Deming prize
† Books/Quality consulting/training (mid 1990s)
… The rise and fall of TQM
† Listening to customers
† Employee participation at all levels
… Six sigma
† Management commitment
† Benchmarks (General Electric)
 TQM vs Six Sigma
g
20
TQM
Worker empowerment and teams
Within department, process or
individual workplace
Training is limited to simple
improvement tools l and d concepts
Focused on improvement with little
financial accountability
Six Sigma
Business leader champions
Often cross-functional and more
strategic in nature
More rigorous and advanced set of
statisticall methods
h d and
d a structured
d
problem solving methodology (DMAIC)
Requires a verifiable return on
investment and focus on the bottom line
 The statistical basis of six sigma
g
21

A six sigma quality level corresponds to a process variation equal to half of the
design tolerance while allowing the mean to shift as much as 1.5 standard deviations
from the target.

k* Process standard deviation = Tolerance/2

 Metrics and measurement
22

… A metric is a verifiable measurement of some

particular characteristic, stated either numerically
((e.g.
g Percentageg of defects)) or in qqualitative terms
(e.g. Level of satisfaction – poor or excellent).

… In six sigma, a defect or non-conformance is a

measure of quality
 Metrics and measurement
23

… Defects/unit or Defects/opportunities
= number of defects discovered/number of units produced

… D f t / illi opportunities
Defects/million t iti (d (dpmo))
= (number of defects discovered/opportunities for error)*1000000

… The use of dpmo is used to define quality broadly. For six sigma projects,
this value is 3.4 defects per million opportunities

… Sigma level = NORMSINV(1-dpmo/1000000) + SHIFT

= NORMSINV(1-number of defects/number of opportunities) + SHIFT

Note: If SHIFT values are not given, assume 1.5 by default.

 Computing
p g sigma
g levels
24

… If the average number of bags per customer is 1.6, and the airline
recorded
d d 3 lost
l bags
b for
f 8,000
8 000 customers in
i one month,h then:
h

… Number of defects discovered = 3

… Number of opportunities = 8000*1.6 = 12800
… Defects/opportunities = 3/12800

Applying the formula Sigma level = NORMSINV(1-number of

defects/number of opportunities) + SHIFT, we get the following

… Sigma level = NORMSINV(1-3/12800) + SHIFT

= 3.498 + 1.5 ≈ 4.998
= 5-sigma
5 sigma level
 Ppm
p and different sigma
g levels
25

A quality level of 3.4 defects per million can be achieved in several ways:
•With 0.5-sigma
0 5 sigma off-centering
off centering and 5-sigma
5 sigma quality
•With 1.0-sigma off-centering and 5.5-sigma quality
•With 1.5-sigma off-centering and 6-sigma quality
 Textbook Exercise : Chapter 2, Problem 2
26

… During one month, 35 preflight inspections were

performed on a military aircraft. Eighteen
nonconformances were noted. Each inspection
p
checks 60 items. What sigma level does this
correspond to ?
 Practice Exercise
27

… HudsonBella companyp y makes designer

g bags
g for
several of its client stores in Oklahoma. During the
quality inspection conducted on 500 random bags
i eachh off its
in i three
h manufacturing
f i lines
li on SSep 5
5,
2012, following defects were found:
† Line 1: 10 defects
† Line 2: 15 defects
† Line 3: 25 defects

What is the overall sigma level at which HudsonBella

is operating ?
 Case study
y – Quality
y at Xerox
28

… From Leadership through quality to lean six sigma

 Case study
y – Quality
y at Xerox
29

Leadership through
quality
Four goals
Customer goal
Employee goal
B i
Business goall
Process goal
 Case study
y - Quality
y at Xerox
30

Lean six sigma

Key components
•Performance
excellence
ll process
•DMAIC process
•Market trends and
benchmarking
•B h i
•Behaviours and
d
leadership
 Case study
y – Quality
y at Xerox
31
 Six sigma
g and business results
32

… Considerable evidence exists that six sigma initiatives

positively impact bottom line results. For example, AT & T,
GE Capital, Motorola, Ford ... and many more.

… Research studies show that quality-focused companies

achieved
† better employee participation and relations
† improved product and service quality
† experienced higher productivity
† greater customer satisfaction
† increased market share
† improved profitability
 Six sigma
g and competitive
p advantage
g
33

Quality and Profitability

 Six sigma problem solving methodology
34

… The problem solving methodology used for six sigma is called DMAIC
(D fi Measure,
(Define, M A l
Analyze, I
Improve, C t l)
Control)

… Key characteristics
† A problem
bl to t be
b solved
l d
† A process in which the problem exists
† One or more measures that quantify the gap to be closed and can be used to
monitor progress

… Themes
† Redefining and analyzing the problem
† Generating ideas
† Evaluating and selecting ideas
† Implementing ideas
 Define Phase
35

… Requires defining the problem in very specific

operational terms that facilitate further analysis

… Identify the customers and the Critical To Quality

(CTQ) parameters

… Address project management issues such as what

will need to be done, by whom and when

… Perform project scoping i.e. drilling down a project

statement to a more specific problem
 Measure Phase
36

… Focuses
Foc ses on how to measure
meas re the internal processes
that impact CTQs.

… Identify causal relationships between process

performance (X) and customer value (Y),
(Y) that is,
is
Y = f(X)

… Collect data
 Analyse
y Phase
37

… Focuses on why defects,

defects errors or excessive
variation occurs

… Experiments are conducted to verify the

hypothesized relationships.
relationships

… Statistical thinking,
thinking analysis and computer
simulation techniques are used.
 Improve
p Phase
38

… FFocuses on removing
i or resolving
l i the
h problem
bl andd
improving the performance measures of the CTQs.

… Problem solutions often entail technical or

organizational changes.
changes
 Control Phase
39

… FFocuses on how
h to maintain
i i theh improvements
i over
time.

… Can include establishing the new standards and

procedures training the workforce and instituting
procedures,
controls like checklists, periodic status reviews,
statistical process control charts etc.
 DMAIC Success stories - Ford
40

… Slogan: Quality is Job1

… Emphasis on :
† Operating systems to define standards and processes
† Quality leadership to engage all employees

† Consumer driven six sigma

 DMAIC Case study
y - Ford
41

… Problem – Customer complained that body side moldings

were lifting at the edges.

… DMAIC problem solving approach

… Define: covered four critical issues

† The tape that was designed to secure the molding was not
contacting the body enough
† Holes located on the body and used to line up the molding were
too high,
high hitting an indent on the body sides
† Pressure used to apply the tape was too low
† The body was not clean enough so the tape was not sticking well.
 DMAIC Case study
y - Ford
42

… Measure – measurements were taken on the

location of the holes, flatness of the molding,
pressure being
p g applied,
pp , and p percent of area being
g
cleaned.

… Analysis – team experts, stakeholders such as

maintenance personnel and tier 1 and tier 2
suppliers used the data to understand the process
and discover ways in which it can be improved.
 DMAIC Case study
y - Ford
43

… Improve – improvements were proposed,

† moving holes on the body side down by 2 mm,
† changing molds for the body side molding to ensure flatness and ensure 100%
contact between the molding, tape and body side;
† using optimum pressure to apply the molding; and
† replacing the head on the cleaning fixture to ensure optimum cleaning of the
body side.

… Control – Routine quality checks were applied

† To monitor Hole locations
† To assure supplier implemented a new procedure for checking the moldings for
flatness Q
flatness.
† To meet specifications for optimum pressure used to apply the moldings to the
body and
† To maintain cleaning equipment.
 Practice Exercise 2- DMAIC
44

… Apply DMAIC to resolve the following quality issues.

† Long Waiting times in Hospitals

† Long Check-in times for Flight Companies

† Long Service times in Restaurants

† Postal delays
 Six sigma
g in service organizations
g
45

… Also called Transactional six sigma

… Measures of performance
† Accuracy

† Cycle time
† Cost

† Customer satisfaction
 The six sigma
g bodyy of knowledge
g
46
 The six sigma
g bodyy of knowledge
g
47
 Caveat - Six sigma
g problem
p solving
g
48

… Although increasing the number of six levels

significantly increases improvements, not all processes
should operate at a six sigma level.

… Appropriate level depends on the strategic

importance of the process and cost of improvement
relative to the benefit.
benefit

… In addition to focus on defects,, six sigma g seeks to

improve all aspects of operations. Considerations
need to be given to other key metrics including cycle
time,, p
process variation,, yyield and throughput.
g p