Six Sigma

Process Improvement
MethodologyTM

1
 Purpose

● Provide An Overview of Six Sigma

● Layout the Process Improvement MethodologyTM

2
 Code of Conduct

● Please listen as an ally…

● If you have a question at any time, ask!
● Use name tents
● Please be prompt in returning from breaks
● Turn off the mobile/pager system while in training

3
 Expectations

● You will have a better understanding of Six Sigma

● What are your expectations for this session?

4
 !!!!!Quality!!!!!

● Conformance to dimensions, fit, form, requirements,

use, Customer Satisfaction.
● Problem solving

• Condition of output
• Changing gaps between good & bad.

• Solutions are engineered well with statistical

guidance to Engineering.
• Who created problems in the first place could not
be used to solve it

5
 Pursuit of Quality

Inspect for Quality

Statistical
Process
Control Process
(Deming) Modeling
(Taguchi)

Design for
Six Sigma

1930 1940 1950 1960 1970 1980 1990 2000

6
 !!!!!What’s new!!!!!

● Active Leadership
● Integration with strategy
● Quality net income
● Special Matrics
● Special roles
● Project Management
● Facts decide not judgement.
● Alignmenet of drivers & behaviour
● System Approach
● Remuneration linkage with six-sigma initiatives.

7
 Six Sigma

● Sigma Breakthrough Technologies has a proven

track record
● Methodology that is unique, systematic, proven,
simple, lasting

8
 Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

9
 Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

10
 What is Six Sigma?
● An approach to sustainable breakthrough improvement
that:
− Fosters a common language and cross-functional cooperation
within and between divisions
− Strengthens our productivity efforts
− Develops our process improvement core competency
− Uses statistical tools for significant variability reduction
− Helps
> Develop expert personnel and future leaders

> Increase capacity with minimal capital

> Meet productivity goals

> Improve customer service

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 Six Sigma Focus

Improving performance by flawless execution

Achieving rapid breakthrough improvement
Applying advanced breakthrough tools that work
Making a positive and deep cultural change

Getting Real Financial Results

Passion + Execution = Fast and Lasting Results

12
 Overall Perspective

Process
Capabilities Safety

Rolled
Throughput
Technology Yield
Capabilities

Customer Predictable Customer

Robust COPQ, 4
Requirements Flexible Satisfaction
Designs Wall Cost
Factories
Materials
Capabilities Capacity
Productivity

Materials
Organization Mangmnt &
Capabilities Inventory

13
 Six Sigma Systems

Materials Six Sigma Data

Management Systems

Reliability
Process Centered Maint.
Six Sigma Customer
New Product Leadership Operation Satisfaction
Development and Control
Systems Assessment
Measurement
Control

Problem Human Resource

Solving Involvement

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 What is Six Sigma?
● Simple:
Simple
− Eliminate variation and defects
− Eliminate the opportunity for variation and defects
● Complex
− Vision
− Metric (Standard of measurement)
− Benchmark
− Philosophy
− Method
− Tool for:
> Customer focus

> Breakthrough improvement

> Continuous improvement

> People Involvement

− Aggressive Goals

15
 A Measurement

Sigma PPM

2 308,537
3 66,807
4 6,210
5 233
6 3.4

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Another Look . . .

σ % Non-Defective

2 69.1%
3 93.32%
4 99.379%
5 99.9767%
6 99.99966%

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 Practical Meaning

99% Good 99.99966% Good

Postal System
20,000 Lost Articles Of Mail / Hr 7 Lost Articles / Hr

Airline System
Two Short/Long Landings / Day 1 Short / Long Per 5 Years

Medical Profession
200,000 Wrong Drug Prescriptions / Year 68 Wrong Drug Prescriptions

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What Does 6 Sigma Mean In Your Daily Life?

PPM
Prescription Writing
Tax Advice
Restaurant Bills
1,000,000 Payroll Processing
100,000
10,000
Baggage Handling

1,000 Best in
100 Class

10
Airline
1 Safety Rate

1 2 3 4 5 6 7

Sigma Level

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 Business Metrics
USA Today
Medical Article
September 22, 1997

Number of antibiotic prescriptions issued in 1996:

282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were

to treat colds, bronchitis, and respiratory infections...

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 Business Metrics
USA Today
Medical Article
September 22, 1997

Number of antibiotics prescriptions issued in 1996:

282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were

to treat colds, bronchitis, and respiratory infections...
even though more than 90% of such infections are caused by
viruses, which are immune to antibiotics.

53,000,000 defective prescriptions = 2.4 σ

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 Business Metrics

Tranquilizers / Anti-Anxiety Medications:

76,370,000

Sleeping Pills / Sedatives:

23,681,000

Anti-Obesity Drugs:
23,596,000

Sources: IMS America, Plymouth Meeting, PA.

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 Business Metrics

Instructor’s Note:

Despite being less than 3 sigma, we are “happy” to report

Doctors are operating with very profitable returns.

This only proves . . .

You don’t have to be 6 Sigma to make money.

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 Reality of Escaping Defects

Escaping Defects

Escaping Defects

Total Defects/Unit

No matter how good your inspection and test processes are, the
more defects you create, the more defects escape to the customer

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Premise for Six Sigma Methods

Sources of variation can be

− Identified
− Quantified and prioritized
− Eliminated by control or prevention

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 3 Sigma Process

Lowe r Spe c Upper Spec

σ σ σ σ σ σ

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 6 Sigma Process
Lower Spec Upper Spec

σ σ σ σ σ σ σ σ σ σ σ σ

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 Dissecting Process Capability
Inadequate
Measurement Supplier
Capability Variation

Inadequate Inadequate
Process Design
Capability LSL USL Margin

Defects

Process Capability
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 Dissecting Process Capability
1000 100

Percent
80

Count
60
500
40
20
0 0

t.

n
r
ol o
h

ble
Defect

ti o
eig

ma
gC
b
W

Bu

f or
on
LSL USL

er

Air
Ov

De
Wr
Process Capability
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 Business Impacts of Variability
● Prevention Costs
− Education and training
− Quality planning
− Product design qualification tests
− Supplier qualification
− Customer interface
− Controlling processes
● Appraisal Costs
− Incoming inspection
− Maintenance and calibration of
equipment
− Setup inspection and tests
− Field testing
− Process audits
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● Internal Failure
− Scrap
− Supplier caused losses
− Rework
− Retest / Re-inspection
− Unplanned downtime
− Trouble shooting
− Engineering change notices
● External Failures
− Processing customer inquiries
− Maintaining customer field service
− Retro fit costs
− Incurring penalties/claims
− Product warranty
− Lost sales
 Exercise

● Go through the list on the previous slide and

indicate which costs are EASILY accessed
through your current finance systems.
● Count the selected elements

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Sigma Level
6 33σσ Cost
Cost of
of Failure
Failure :: 20-25%
20-25%
of
of Sales
Sales
5

5% 10% 15% 20% 25% 30%

Cost of Failure (% of Sales)

What’s
What’s Your
Your Cost
Cost Reduction
Reduction Opportunity?
Opportunity?

32
 Objectives

* What Is 6 Sigma ?

* Why Are We Doing 6 Sigma ?

* How Are We Deploying 6 Sigma ?

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 Six Sigma
INITIATIVE METHODS & TOOLS
● Improvement ● Process Thinking
● Breakthrough ● Process Variation
● Focused Approach ● Facts, Figures, Data
● Right Projects ● DMAIC
● Right People ● 8 Key Tools
● Project Reviews ● Statistical Tools
● Sustain the Gains ● Minitab
● Results ($$) ● Critical Few Variables

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 Process Excellence: The Right Metrics
Defects per 1000 Scrap
7 0.21
0.20
0.19

COPQ
0.18
RTY

65
0.17
0.16
0.15

55 0.14
0 5 10 0 5 10
Month Month

Baseline
Rate
Goal
Units per Day

Actual
400

How is this process

doing?
350
0 5 10
Month

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 Actual Metrics Example

Scrap Downtime

Defects/Unit

36
 Using Pareto’s to Select Projects
Pareto Chart for Cause

1800
100
1600
1400 80
1200

Percent
Count
1000 60
800
40
600
400 20
200
0 0

ces
s cal bly ers
hni em
Defect Pro Tec Ass Oth

Count 1328 198 164 34

Percent 77.0 11.5 9.5 2.0
Cum % 77.0 88.5 98.0 100.0

Process Related Scrap is the

Highest
Major Part Failure due to Process
Knife Assembly and Inner 100

Gasket are the two major

600

500 80

process scrap drivers

Percent
400

Count
60
300
40
200
20
Two Potential Projects: 100

0 0

- Knife Assembly ly mm p
mb et set mm Sto II
sse ask Re 100 g5 ield ck
TS
Defect fe A er G ri ng, -500x sin y Sh pco
Kn
i Inn Sp fe Hou fet Sto
Kni Sa

- Inner Gasket
Count 148 128 75 74 72 69 50
Percent 24.0 20.8 12.2 12.0 11.7 11.2 8.1
Cum % 24.0 44.8 57.0 69.0 80.7 91.9 100.0

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 Six Sigma Everywhere
SERVICE DESIGN

ADMIN. PURCH.
Six Sigma
Methods

QA MFG.

MAINT.

38
The Process Improvement MethodologyTM

Process
ProcessDefinition
Definition

Process
ProcessMeasurement
Measurement

Process
ProcessAnalysis
Analysis

Process
ProcessImprovement
Improvement

Process
ProcessControl
Control

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 The Process Improvement MethodologyTM
Phase 0: Define Phase I: Process Measurement
• Map process and Identify Inputs and Outputs
•Scopeand • Cause and Effects Matrix
Boundary
•Define Defects
•Team
• Establish Measurement System Capability
Charter and • Establish Process Capability Baseline
Sponsor
Phase II: Process Analysis
•Estimated $ Impact • Complete FMEA
• Perform Multi-vari Analysis
•Leadership approval • Identity Potential Critical Inputs
• Develop Plan for Next Phase

Phase III: Process Improvement

• Verify Critical Inputs
• Optimize Critical Inputs

Phase IV: Process Control

• Implement Control Plan
• Verify Long Term Capability
• Continuously Improve Process

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