An Introduction to Six Sigma

Jabil Technology
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Intro to Six Sigma Training Objectives
Understand the goals and objectives of the
Six Sigma Initiative

Understand the overall approach of Six
Sigma
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Black belt / Brown belt Training Objectives

To learn the systematic approach to Six Sigma
problem solving
D before M before A before I before C

To understand and effectively utilize the D.M.A.I.C.
tool kit


To understand how you will be play a key part in
Jabils incorporation of Six Sigma methodology
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Six Sigma

Achieving Our Objectives
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Jabils Seven Objectives
Products
1. Improve time to market for all products
2. Lead the industry in key technologies
Operations
3. Create world-class manufacturing processes
4. Develop strategic vendor relationships
Customer
5. Provide best-in-class product and process quality
6. Develop strategic relationships with key customers
Management
7. Become an employer of choice
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What is Six Sigma?
Six Sigma - The Initiative

Process
Systematic approach to reducing defects which
affect what is important to the customer

Tools
Qualitative, statistical and instructional Devices for
observing process variables and their
relationships as well as managing their character
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Whats it Based On ?
Customer .....
Anyone Who Receives
Product, Service, or Information



Opportunity .....
Every Chance to Do Something
Either Right or Wrong



Successes Vs. Defects .....
Every Result of an Opportunity Either Meets
the Customer Specification or it Doesnt

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Whats the Strategy?
Know whats important to the
Customer

Reduce defects

Center around target

Reduce Variation
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The Goals of Six Sigma
Defect Reduction

Yield Improvement

Improved Customer Satisfaction


Higher Net Income
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How Does Six Sigma Make the Difference?
Vision
Philosophy
Aggressive goal
Breakthrough improvement
Metrics Driven
Focus
Customer focus
Problem focus
Process focus
Method
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Six Sigma Vision
The Vision of Six Sigma is to delight customers
by delivering world-class quality products
through the achievement of Six Sigma levels of
performance in everything we do.
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Six Sigma Philosophy
The Philosophy of Six Sigma is to apply a
structured, systematic approach to achieve
breakthrough improvement across all areas of
our business.
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Sigma is a statistical unit of measure that reflects
process capability. The sigma scale of measure is
perfectly correlated to such characteristics as
defects-per-unit, parts-per-million defective, and the
probability of a failure/error.
2 308,537
3 66,807
4 6,210
5 233
6 3.4

PPM
Process
Capability
Defects per
Million Opp.
Six Sigma - Aggressive Goal
Jabil Technology
Measure of variation
Indicator of the
capability of our
processes and quality of
our products
The Sigma
1
_
0
1
_
0
1
_
0
1
6

Sigma
Jabil Technology
A 3 Process
m = Target
Average Deviation from the Mean
1
USL
0.14% def
Upper Specification Limit (USL)
Lower Specification Limit (LSL)
Mean of the distribution (m)
Sigma ()
3
The distance between the
point of inflection and the
mean constitutes one
sigma.
If three sigma can be fit
between the target value
and the specification limit,
we would say the process
has three sigma
capability.
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Sigma Level or Z-Score = number of standard
deviations away from the specifications
A universal metric used to compare performance
across products or processes
Derived from the probability of producing a defect /
defective unit
Sigma Level or Z Score
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Average Deviation from Mean
1
USL
1 in a billion
1 2 3 4 5 6

A 6 Process
Why do we need 6?
Z score = 6
In reality a 6 Sigma
process is something like
1/billion defectives
The z-score or - Level of the process is based on Short Term
data but our process exhibits long term variability due to
shifts and drifts
m
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Long Term
Short Term
Small Standard Deviation
Large Standard Deviation
How can we determine the long term capability
from short term estimates of sigma?
e.g. What is the size difference?
Short and Long Term
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Determining the Difference
Without calculating both standard deviations it
is often assumed that the Long Term
distribution is made up of the short term
distributions mean shifting / drifting by 1.5
ST
Long Term
Short Term
Small Standard Deviation
Large Standard Deviation

ST

LT
Jabil Technology
A Six Sigma Process
The 1.5 shift is used as an off-set in the centering of the mean to
generally account for dynamic non-random shifts in the process. It
represents the average (estimated) amount of change a typical
process will exhibit over many cycles of that process.
Sigma
Level
Short-Term
DPPM
Long-Term
DPPM
1 158655.3 691462.5
2 22750.1 308537.5
3 1350.0 66807.2
4 31.7 6209.7
5 0.3 232.7
6 0.0 3.4
3.4
ppm
LSL USL 4.5
T
m
A Six Sigma
Process Shifted
by 1.5
LSL
6
0.001
ppm
USL
Process
Capability
A Six Sigma
Process Centered
T
0.001
ppm
A Six Sigma
Process With SD
Inflated by 1.5
DPPM = Defective
Product Per Million
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Six Sigma -- Practical Meaning
99.99966% Good (6 Sigma)
20,000 lost articles of mail per
hour

Unsafe drinking water for almost
15 minutes each day

5,000 incorrect surgical
operations per week

Two short or long landings at
most major airports each day

200,000 wrong drug prescriptions
each year

No electricity for almost seven
hours each month
Seven articles lost per hour


One unsafe minute every seven
months

1.7 incorrect operations per week


One short or long landing every
five years

68 wrong prescriptions per year


One hour without electricity every
34 years
99% Good (3.8 Sigma)
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Where Does Industry Stand?
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Sigma Scale of Measure
1,000,000
100,000
10,000
1,000
100
10
1
PPM

Restaurant Bills
Doctor Prescription Writing
Payroll Processing
Order Write-up
Journal Vouchers
Wire Transfers
Airline Baggage Handling
Purchased Material
Lot Reject Rate
Domestic Airline Flight
Fatality Rate
(0.43 PPM)
Best-in-Class
Average
Company
3 4 5 6 2 1
IRS - Tax Advice
(phone-in)
(140,000 PPM)
With the 1.5 shift
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Quality Performance Levels - Where Is J abil ?
2
3
4
5
6
308,537
66,807
6,210
233
3.4
Sigma PPM
Process
Capability
Defects per
Million
Opportunities
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Breakthrough Strategy
Six Sigma - Six Sigma Enables Breakthrough Level
Improvement!
1 2 3 4 5
The problem with continuous improvements as the only goal,
Organization sees improvement BUT loses the game .
Time in Years
Standard Approaches
Current Tools
Kaizen
Lean Manufacturing
Re-engineering
Typical TQM
I
m
p
r
o
v
e
m
e
n
t

Breakthrough Strategy
- Trained & Dedicated
Individuals
- Analytical Expertise
- >70% Improvement per
Project
Six Sigma
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Getting to Six Sigma
How far can
inspection
get us ?
(Distribution Shifted 1.5)
PPM
2
308,537
3 66,807
4 6,210
5 233
6 3.4
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How Does Six Sigma Make the Difference?
Vision
Philosophy
Aggressive goal
Breakthrough improvement
Metrics Driven
Focus
Customer focus
Problem focus
Process focus
Method
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Customer Focus: A Model For Success
Technology
Technology
Capability
Capability
Organization
Organization
People
People
Processes
Processes
Business survival is dependent upon how
well we satisfy our customers.
Customer satisfaction is a function of
quality, price, and delivery.
Quality, cost, and prompt delivery are
dependent upon capability.
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Need
Maximizing the Interaction
Delivery
Price
Quality
Do
Cycle Time
Cost
Defects
Supplier strives for performance on Cycle Time, Cost and
Defects to meet Customers increasing expectations on
Delivery, Price and Quality.
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Dedicated problem solvers, among the
companys best people

Complete, disciplined data-based approach
to problem solution

Combines the right people with the right tools
on the right projects

Hard financial analysis on project selection
and assessment


Focus on the Problem: Unique Approach
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What Types of Problems Should We Target?
High Defect Rates

Low Yields

Excessive Cycle Time

Excessive Machine Down Time

High Maintenance Costs

Bottlenecks

Poor Process Capability


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What Types of Problems Should We Target?
High Defect Rates
Low Yields
Excessive Cycle Time
Excessive Machine Down Time
High Maintenance Costs
Bottlenecks
Poor Process Capability


Non-Conformance
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The Cost of Poor Quality (COPQ) Iceberg
Traditional Quality Costs
Lost Opportunity
Hidden Factory
Lost sales
Late delivery
More Setups
Expediting costs
Excess inventory
Long cycle times
Lost Customer Loyalty
Engineering change orders
Additional Costs of Poor Quality
(intangible)
(tangible)
(Difficult or impossible
to measure)
Scrap
Rework
Inspection
Warranty
Rejects
Administration /
Disposition
Concessions
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What is Cost of Poor Quality?
In addition to the direct costs associated with finding and fixing
defects, Cost of Poor Quality also includes:
The hidden cost of failing to meet customer expectations the first time
The hidden opportunity for increased efficiency
The hidden potential for higher profits
The hidden loss in market share
The hidden increase in production cycle time
The hidden labor associated with ordering replacement material
The hidden costs associated with disposing of defects
The hidden cost of rework

For most companies today, the cost of poor quality is likely to be
25 % of sales. For Jabil, thats over $1 billion each year.

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Why Focus on Cost of Poor Quality?
Profit
Total Cost to
manufacture
and deliver
products

Profit
Cost of
Poor Quality
COPQ
Theoretical
Costs
Profit
COPQ
Theoretical
Costs
Which Feels Better??
Cost of
Poor Quality
COPQ
Theoretical
Costs
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Classical Yield
Factory A
100 85
Factory B
100 85
Not all Yields are alike!
15

Scrap
15 Scrap
Rework
Factory C: The Hidden Factory
50 35
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Classical Yield
Factory A
100 85
15

Scrap
Factory B
100 85
15 Scrap
Not all Yields are alike!
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Equal Yields Unequal Costs
Classical Yield does not correlate to cost,
cycle time or inventory levels
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Manufacturing Variation Causes A "Hidden Factory"
I ncreased Cost - Lost Capacity
Yield After
Inspection or Test
Each defect must be detected, repaired
and placed back in the process. Each
defect costs time and money.
Scrap
Rework
Hidden Factory
NOT
OK
Operation Inputs
Inspect
Final
Yield
OK
Wasted Time
Wasted Money
Wasted Resources
Wasted Floor space
90%
Customer Quality
Defects and the Hidden Factory
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Extending the Concept of Y
RT

Without Inspection or Test Without Inspection or Test Without Inspection or Test
99% 99% 98%
Op 1 Output Op 2 x =
Process Centered Process Centered
there is a 98% probability that any given unit of
product will pass through both operations defect free.
Power of Rolled Throughput Yield
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 2 4 6 8 10 12 14 16
#Operations
R
T
Y
RTY p=0.9
RTY p=0.99
RTY p=0.9999966
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A New Perspective of the Factory
Non-Value Added
(The Hidden Factory)
Ytp =
Throughput Yield
Scrap
Scrap
Operation
Verify
Operation
Verify
Value Added
(The Visible Factory)
Customer Customer
Quality Quality
Supplier Quality
Producers Producers
Quality
Quality
To decrease defects per unit means to increase rolled-throughput yield
which in turn improves product reliability and customer satisfaction.
Ytp = Yrt
m
1 i=

Ytp =
Throughput Yield
Rework
Not
OK
Rework
Not
OK
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The Focus on the Process
If we are so good at X, why do we constantly test and inspect Y?
Y
Dependent
Output
Effect
Symptom
Monitor
X1 . . . XN
Independent
Input-Process
Cause
Problem
Control
To get results, should we focus our behavior on the Y or X?
f (X) Y=
Focus on X rather than Y, as done historically
KPIV
KPOV
*
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What To Do With the Vital Few. . . . .
Process
KPIV
KPIV
KPIV
KPOV
CTQ
Vital Few
Correct
(In-Spec)
Defect-
Free!
KPIV
Control Control Control - Inputs
Note: Statistically proven relationships
between Inputs and Outputs
Manage the INPUTS and good OUTPUTS will follow
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How Does Six Sigma Make the Difference?
Vision
Philosophy
Aggressive goal
Breakthrough improvement
Metrics Driven
Focus
Customer focus
Problem focus
Process focus
Method
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The Foundation of the Six Sigma Tools
Data Driven Analysis
1. We only use experience, not data
2. We collect data, but just look at the numbers
3. We group the data so as to form charts and graphs
4. We use census data with descriptive statistics
5. We use sample data with descriptive statistics
6. We use sample data with inferential statistics
Levels of Analysis:
What level are you at?
Goal
Data is used to classify, describe, improve, control
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The Application Roadmap
Breakthrough
Strategy
Characterization
Phase 1:
Measure
Phase 2:
Analyze
Optimization
Phase 3:
Improve
Phase 4:
Sustain
A Six Sigma Black
Belt leads a
Customer Focus
Team through each
of the breakthrough
phases with respect
to their line of sight
process.
Average
Company
3 4 5 6
7
100,000
2
Sigma Scale of Measure
Best-in-Class
The Basic Objective
1,000,000
10,000
1,000
100
10
PPM
1
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The Improvement Strategy (MAIC)
Focus__
Vital Few x
i
Y
Y
Y
Y
Y
Vital Few x
i
Vital Few x
i
Vital Few x
i
Vital Few x
i
SIX SIGMA METHODS GENERATE DATA-BASED DECISIONS
*
Select product or process key characteristic(s); e.g. Customer Y
Define performance standards for Y
Validate measurement system for Y
Establish process capability of creating Y
Define improvement objectives for Y
Identify variation sources in Y
Screen potential causes for change in Y & identify vital few X
i

Discover variable relationships between vital few X
i
Establish operating tolerances on vital few X
i
Validate measurement system for vital few X
i
Determine ability to control vital few X
i
Implement process control system on vital few X
i
X
1
, X
2
, X
n


X
1
, X
2
, X
n
Phase
Measure
Analyse
Improve
Control
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In Search of the Vital Few
Optimized Process
30 - 50
10 - 15
4-8
Key Process Input
Variables ( KPIVs )
8 - 10
KPIVs
Critical KPIVs
3-6
Key Leverage
KPIVs
Input Variables
ANALYZE
MEASURE
IMPROVE
CONTROL
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Narrow the Scope --> ID Leveraged KPIVs
Optimized Process
30 - 50
10 - 15
4-8
Key Process Input
Variables ( KPIVs )
8 - 10
KPIVs
Critical KPIVs
3-6
Key Leverage
KPIVs
Input Variables
Process Map
Multi- Vari Studies,
Correlations
Screening DOEs
DOEs , RSM
C&E Matrix and FMEA
Gage R&R, Capability
Hypoth. Tests, ANOVA
Quality Systems
SPC, Control Plans
Measure
Analyze
Improve
Control
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The Focus of the Black Belt
Manage medium-large scale critical projects

Target a $175,000 cost savings and a 70% defect
reduction or a critical-to-customer-satisfaction issue
Systematically execute D.M.A.I.C.
D Define
M Measure
A Analyze
I Improve
C Control
Ensure appropriate conclusions are drawn and
correct actions implemented

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The Focus of the Brown Belt
Manage a single project, similar in nature to
a Black Belt project

Actively participate on BB projects as
needed

Incorporate D.M.A.I.C. principles into daily
functional work
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The Focus of the Green Belt
Actively participate on BB projects as
assigned

Systematically execute principles of
D.M.A.I.C. on BB subprojects

Incorporate D.M.A.I.C. principles into daily
functional work
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6 Methodology - Project Selection Philosophy
Link to Jabils business strategy and issues
critical to customer satisfaction

Identify and improve the key process(es)

Build on what has been done before - dont
reinvent the wheel

Bound the project scope and mandate a focus
of effort

Use a rigorous process that ensures buy in,
clarity of purpose and accountability

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6 Methodology - Project Reviews
The Champion should review the Black Belt / Brown
Belts project prior to the Training.

Projects should be routinely reviewed in an efficient
and rigorous manner...assure they are moving to
conclusion
Weekly Champions reviews should occur
(minimum)
Monthly Reviews at Site Operations Reviews are
recommended
Reviews should include success stories,
backlogged projects, and Detailed Project Review
Presentations using standardized presentation
templates and progress review guidelines
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6 Methodology - Project Completion/Realization
Successful projects...for what do we aim?

Process is operating at targeted level and
customers are satisfied with performance

Long term process performance sustained

Project costs contained within estimated
levels

Completed on schedule with a minimum
disturbance to normal work flows
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A Challenging Task
BK1-1INTRO
Black belts and Brown belts will:
Understand and apply the Six Sigma training on
projects
Influence others through education and
communication to understand that the new
method is the right thing to do
Assure that the rigor of the discipline of Six
Sigma is adhered to
Ensure that an improved process stays that way
Provide face-to-face feedback to the Champions
on the project progress and results


Change the culture
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Expectations On Projects
41
BK1-1INTRO
Build Relationships with the functional team & leaders.
Become part of the Team !
Be disciplined about using the Breakthrough Strategy
Use the Tools (where applicable)
Get involved (but not side-tracked)
Keep organized documentation of your activities,
actions, costs, and data
Communicate and educate those around you
Network with other Black Belts, Brown Belts, and
Green Belts

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Intro to Six Sigma Training Objectives
Understand the goals and objectives of the
Six Sigma Initiative

Understand the overall approach of Six
Sigma
Ref: Breakthrough Thinking, Seven Steps of Creative
Problem Solving, Gerald Nadler, Prima Publishing, 2
nd

Ed., 1998
APPENDIX
Breakthrough Thinking
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8 Basic Errors
1. Applying the wrong mental assumptions to the
problem
2. Taking the wrong approach to the problem
3. Involving the wrong people
4. Trying to solve the wrong problem
5. Addressing the problem with the wrong timing
6. Exerting the wrong control over the search for a
solution
7. Wrongly accepting a false or incomplete solution
8. Wrongly rejecting a true and effective solution
of
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Approaches to Problem Solving
Doubting game
initially doubts all assertions
rigorous, disciplined, tough-minded
mode of Western corporate executives, academic
intellectuals and political leaders
Believing game
initially believes all assertions
see farther into a situation
seek ways of achieving the desired end

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Needed Mental Shift
1. There is more than one type of problem
2. Different ways to think are more effective in solving
certain types of problems
3. Believing, not doubting, must come first
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7 Principles of Creative Problem Solving
Uniqueness Principle
Purposes Principle
Solution After Next Principle
Systems Principle
Limited Information Collection Principle
People Design Principle
Betterment Timeline Principle
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1. Uniqueness Principle
Assume initially that the problem, issue,
or opportunity is different. Dont copy
a solution or use a technique from
elsewhere just because the situation
may appear to be similar.
"Discovery consists of looking at the same thing as
everyone else and thinking something different."
-Albert Szent-Gyorgi
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Uniqueness
No two situations are alike, For starters, people
in each are always different
Each problem is embedded in a unique array of
related problems
Problems that may look alike have different
purpose needs
Tomorrows technology is already different than
todays
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2. Purposes Principle
Explore and expand purposes to
understand what really needs
to be accomplished.

"It is not enough to just do your best or work hard; You
must know what to work on."
-W. Edwards Deming
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Purpose
Provides a means to:
transform a problem into a productive change
avoid working on the wrong problem

People tend to accept a problem as presented
to them and, in doing so, almost assuredly
eliminate the opportunity for breakthrough
solution
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Hierarchy of Purpose
Purpose
Purpose
Purpose
Purpose
Purpose
Narrow purpose, few solutions
Broad purpose, many solutions
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3. Solution-After-Next Principle
Think future solutions for the focus purpose and
work backwards. Consider the solution you
would recommend if in three years you had to
start all over. Make changes today based on
what might be the solution of the future.
Creativity consists of coming up with many
ideas, not just that one great idea.
- Charles Thompson
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S-A-N
Puts a time frame on the ideal solution to be
developed
Its future orientation permits you to start fresh
It encourages stimulation lines of questioning
that lead to alternative ideal solutions
It establishes the concept of regularity as a
guideline for designing the ideal system
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4. Systems Principle
Everything we seek to create and
restructure is a system. Think of
solutions and ideas as a system of
eight elements. Use a solution
framework that includes all elements
and interrelationships.
"Problems and solutions nest within a complex array
of related systems and problems."
- Bob Wiele
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5. Needed Information Collection Principle
Collect only the information that is
necessary to continue the solution-
finding process. Know your purposes for
collecting data. Study solutions, not
problems.

"The breeding ground for barriers to fresh ideas and
the implementation of them is in the detailed
analysis of what exists."
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Dont Over-Collect Data
The benefit of limiting information collection
to what is needed, results in:
requiring less total time, cost, energy, and
document handling
providing a high quality of usable
information
eliminating the defensiveness of people
when reviewing data about what exists
identifying better system interrelationships
providing guidance to implementing
solutions.
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Collect Data Selectively
Determine what information is really needed -
and not really needed
Collect data on purposes and possible
solutions rather than initially on the problem
Extensive data gathering may make you an
expert on the problem but it may also prevent
you from seeing many alternatives.
Collect information from a variety of sources
and share it broadly
Ask how the solution could work -- become
an expert about possible future solutions
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6. People Design Principle
Give everyone who will be affected by the
solution or idea the opportunity to
participate throughout the process of its
development with the other principles. A
solution will work only if people know
about it and help to develop and improve
it.
"We cannot talk people into accepting the future if
they haven't been there."
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Benefits from People Design
Their knowledge of the "secrets" (purposes,
technology fiction, solutions-after-next and
systems) of the front line
Their support of the larger purposes to be
achieved rather than resistance to change
Getting the creative (technology fiction) juices
flowing
Getting the team to focus on customer-based
perspectives
Their emotional attachment to a future they
helped to create
Together reaching better solutions
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7. Betterment Timeline Principle
Install changes with built-in seeds of future
change. Know when to fix it before it
breaks. Know when to change it.

"Even if you are on the right track you'll get run over
if you just stand there."
- Will Rogers
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Breakthrough Thinking
Refutes the conventional wisdom that you
shouldn't fix something if it isn't broken.
For a solution to continue to be effective, it
has to be maintained and upgraded
continually toward the target solution-after-
next.
The assumptions, purposes, technology,
environment and constraints upon which
the solution is based change with time.
Even the target needs to be updated
regularly.
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Breakthrough Thinking
Is an organized and flexible thinking
process
keep all of the 7 principles available all of
the time