Six Sigma Experience sharing & Cases

Six Sigma is a Performance Target

Six Sigma is a PERFORMANCE TARGET that applies to a single Critical-to-Quality (CTQ) characteristic not to the total product.

What is Six Sigma?

Six Sigma is a business process that allows companies to drastically
improve their bottom line by designing and monitoring everyday business activities in ways that minimize waste and resource use while increasing customer satisfaction.

Six Sigma guides companies into making fewer mistakes in everything they
do and eliminating lapses in quality at the earliest possible occurrence.

CASE 1 Motorola

Quality Control programs have focused on detecting and correcting

commercial, industrial, and design defects and on conformance to standards.

Six Sigma encompasses something broader: It provides specific methods to

re-create the process so that defects and errors do not arise in the first place .

Some companies using Six Sigma : Motorola, AlliedSignal, General

Electric, American Express, Sony, Honda, Maytag, Raytheon, Texas Instruments, Bombardier, Canon, Hitachi, Lockheed Martin, and Polaroid.

Six Sigma Origins

The real problem at Motorola is that our quality stinks! (Motorola Executive, Art Sundry in 1979) Led to discovery of the crucial correlation between higher quality and lower development costs in manufacturing products of all kinds. This pre-dates the rediscovery by America of Dr. W. Edwards Deming that occurred in the 1980 White Paper, If Japan Can, Why Cant We?

Six Sigma Origins

At a time when most American companies believed that quality cost money, Motorola realized that done right improving quality would actually reduce costs and that the highest-quality producer could and should be the lowest-cost producer. Motorola was then generally spending 5%-10% (sometimes as much as 20%) of annual revenues correcting poor quality that is -- $800 million to $900 million. With higher-quality processes this money could be returned to the bottom line. Within the first four years MOTOROLA SAVED $2.2 BILLION. Ultimately, this led to a focus on PROCESS (design & production), rather than simply PRODUCT quality. That is, a PROACTIVE, rather than simply REACTIVE approach to quality.

SIX SIGMA QUALITY DEFINITION

Quality is a state in which value entitlement is realized for the customer and provider in every aspect of the business relationship. Business Quality is highest when the costs are at the absolute lowest for both the producer & consumer. Six Sigma provides maximum value to companies in the forms of increased profits and maximum value to consumers with highquality products and services at the lowest possible cost.

. Why 6s?

4. 6s Motorola

Case Study

Start & Prosperity

Start : Motorola

OUTCOME

At the beginning of 80s, In the Japanese market, Motorolas beeper lost its name value because of the quality difference compared to Japans In 1981 they tried to meet a challenge to improve quality 5 times in 5 years and they couldnt. They developed a consistent process base on statistical knowledge. In 1987, they established 6 goal as a key initiative.

Quality Cost Down by $3.2billion Origin of 6 (Quality level elevated 100 times in 4 years) Culture harmony Western & Oriental

Motorola reached 5.5 level in 1992. Outcome is $3.2billion from1987 to 1992.

Robert W. Galvin,
former Motorola CEO
Failing to implement Six Sigma in commercial areas with the same force that the company implemented it in its industrial sectors cost Motorola $5 billion over a four-year period.

How Big is the Service Sector Anyway?

MISTAKEN BELIEFS: Some companies still believe that improving commercial processes is less important than improving industrial processes or that seemingly intangible commercial processes cant be controlled. BOTH ARE WRONG: Customers are more likely to take their business elsewhere because of poor service than poor products. Companies like GE have shown that improving internal and external commercial processes adds to the bottom line and to customer satisfaction significantly

Case 2: Six Sigma and General Electric

General Electric CEO, Jack Welch, describes Six Sigma as the most important initiative GE has ever undertaken. GEs operating income, a critical measure of business efficiency and profitability, hovered around 10% for decades. In 1995 Welch mandated that each GE operation from credit card services to aircraft engine plants to NBC-TV work toward achieving Six Sigma. GE was averaging about 3.5s when it introduced the program.

Case 2: Six Sigma and General Electric

With Six Sigma embedding itself deeper into GEs processes, they achieved the previously impossible operating margin of 16.7% in 1998 up from 13.6% in 1995. In dollar amounts, Six Sigma delivered more than $300 million to GEs 1997 operating income and more than $600 million in 1998.

. Why 6s?

4. 6s Case Study
G E

Case 3: AlliedSignal
70,000 Employees Chemicals, Fibers, Plastics, Aerospace Products, Automotive Products. Larry Bossidy came from GE to become CEO in 1991 Market Value = $4 billion in 1991 Market Value = $29 billion by the end of 1998 Market Value = $38 billion by 2000.

Start & Prosperity

Prosperity :GE

OUTCOME

In 1995 GE launched 6 process to overcome a difficult business environment and to challenge World Class Quality. They made new processes such as Productivity,Inventory Return etc, but improvement was delayed because of defects in processes. GE thinks World Class Quality is big challenge. GE now focuses on 6 process for next generation .

Quality Cost Down by $3.8 billion Adopt to all Biz. Train and do projects

AlliedSignal
1996 GOALS: 6% productivity increase Reduced Inventory Full-Capacity Utilization Little or no Overtime Reliable Products 5s Manufacturing 5s Designs Predictable Cash Flow 5s Suppliers BY END OF 1998: Total Impact of Six Sigma Within AlliedSignal Reached $2 Billion. Six Sigma Profits in Service Areas including:
Order Processing Shipping Procurement Product Innovation

We cant tell other organizations how to do Six Sigma, but we can tell them how not to do it. Allied has made mistakes along the way and, in the process, learned some tremendous lessons.
LESSON 1: The Organizations Leadership Must Own Six Sigma Upper management supported Six Sigma, managers below those at the top saw it as a flavor of the month. Black Belts seen as a nuisance. Black Belts were using Six Sigma jargon while managers were using business vocabulary. This led to confusion. SOLUTION: Introduce ALL levels of management to Six Sigma. Management had weeklong training sessions to understand the methods of the Breakthrough Strategy and how Black Belt training and experience could be leveraged. ALSO how various initiatives fit together. BEGAN TO FOCUS ON PROCESSES NOT PEOPLE as the source of problems. Also, understanding of the Breakthrough Strategy provided a plan of action, rather than just a command to make something happen.

Six Sigma Changed the Company Culture and

One of the flaws at Allied is that we had too much vertical mobility. Managers inch up the same smokestack, learning more and more about less and less. But companies that train promising individuals as Black Belts circumvent the vertical flow and move people around horizontally, having them serve time in as many major businesses or divisions as possible to give them a kaleidoscopic view of the organization and the benefit of being mentored by a variety of new blood.

Lesson Two: A Beginning Without an End

Having recognized the need to train Initially trained top managers at each managers in the Six Sigma of Allieds 11 Strategic Business Breakthrough Strategy, Allied dedicated Units and gradually worked their way the next year to training 1,000 leaders in down the organization to middle the organization in how Six Sigma management, line supervisors, and worked, and in its potential financial so on. impact. COMPLAINTS FROM BLACK Training sessions lasted 3.5 days and BELTS WITHIN SIX MONTHS: emphasized Six Sigmas impact on: Management turnover and too much Profitability through improved promotion of Black Belts into processes; management before benefit from the The Crucial role of Black Belts, RATHER THAN teaching statistical training and skills could be realized. processes involved in achieving Six SO training had to be ongoing.
Sigma.
Allied is not in the business of measuring activity. We are in the business of measuring results. IF something doesnt have a positive impact on customer satisfaction, our shareholders, and employees, and in the process makes a lots of money, THEN we just flat out arent going to do it. RICHARD A. JOHNSON, Director of Six Sigma at AlliedSignal

Linked AlliedSignals Goals, Vision & Activities.

Lesson Three: Black Belt Retention

AlliedSignals goal: send Black Belts with a minimum of 18-24 months experience mastering the Breakthrough Strategy back into the organization to create Six Sigma behavior & thinking. 40% of Black Belts were promoted to departmental or plant managers. Others left AlliedSignal for higher-paying jobs at suppliers. Others completed only one or two projects before they were pulled back into their previous assignments with leadership not properly reviewing projects and properly acting upon financial opportunities created by Black Belts so that managers felt that Six Sigma wasnt particularly important. 50% of Black Belts were absorbed back into the organization within six months. NOW BLACK BELTS must work at least 18-24 months on a series of Six Sigma projects prior to a change of roles. TIME & EXPERIENCE ARE VIEWED AS CRITICAL TO SIX SIGMA SUCCESS AND THE MATURITY OF THE BLACK BELT.

Lesson Three - Continued

AlliedSignals Champions & Master Black Belts 3.5 Day Executive Overview followed by the traditional Four-Month Black Belt training process. MASTER BLACK BELTS are selected from the best of the Black Belts. Each of these trains and mentors 10 Black Belts Each Black Belt trains and mentors 10 Green Belts. NOW: All Salaried Employees are Expected to Undergo the 26 Hours of Training Required for Green Belt Certification by 2000.

CHAMPIONS Master Black Belts Black Belts Green Belts Total # of Employees

20 70 2000+ 18,000 70,000

Lesson Four: Supplier Capability is Critical to the Success of the Breakthrough Strategy
The Majority of AlliedSignals Suppliers were operating at about three sigma. This prevented the company from realizing the full benefits of Six Sigma. AlliedSignal recognized that they needed to view suppliers as their partners. AlliedSignal began TRAINING its suppliers and offering other technical assistance. To achieve Six Sigma it is important to minimize the number of suppliers, limiting these to those that have been trained in the Breakthrough Strategy. Not only does AlliedSignal provide training, BUT then follows up by dedicating ITS OWN BLACK BELTS to mentor and work with critical suppliers. AlliedSignal estimates that for every 300 Black Belts it trains, 100 are either customers or suppliers.

Lesson Five:
There is No Such Thing as Operator Error
It is PROCESSES not PEOPLE that Fail. This maps to one of Demings 14 Points for Management: DRIVE OUT FEAR. Focus on Processes implies that people are not accused, but rather, that they are able to investigate processes and be part of the solution.

Deming: End the Practice of Awarding Business on Price Tag Alone.

Lesson Six:
Focus on Bottom-Line Improvement
The number one source of failure in deploying Six Sigma is the result of LACK OF COMMITMENT FROM THE ORGANIZATIONS LEADERSHIP. The FINANCE DEPARTMENT must be involved so that the impact of Six Sigma Projects on the Bottom-Line is apparent. Black Belts, the Finance Department, and Executive Leadership must work in tandem. While BLACK BELTS create opportunities for cost reduction and increased profitability, the companys LEADERSHIP must make sure that Black Belts focus on the right projects and take action on the savings opportunities they generate. FINANCE provides closure to the effort by ensuring that the savings are returned to the organizations bottom line.

Lesson Seven: Initiative Overload

LARRY BOSSIDY, CEO: One of the things I have trouble with is nonfinancial objectives. Often theyre just as obscure and vacuous as they sound. FIVE ACTIONS TO PERPETUATE SIX SIGMA: 1. TRAINING: Allieds employee base changes enough every nine to ten months that maintenance of Six Sigma culture requires that new employees be trained in the Breakthrough Strategy. 2. Senior management involvement. 3. Continued on-site leadership training, and alignment of goals among divisions to reinforce Breakthrough Strategy thinking and goals. 4. Requiring Black Belts to dedicate a minimum of two years to working on Six Sigma projects. 5. Supplier involvement and improvement in Six Sigma initiatives.

Products and services should be improved ONLY to the degree that customer value is increased. Six Sigma is a program designed to generate money for the company, either through savings resulting from reduced costs, or from boosting sales by increasing customer satisfaction.

AlliedSignal:
Hindrances to Six Sigma Success
Working on too many improvements at the same time. Not having someone accountable for the problem. Not being a process-based company. A lack of trained and experienced people. Middle managers who fear uncertainty about future roles. Lack of metrics focused on customer value-added processes. Lack of integrated information and financial systems. Fragmented, staff-driven approaches.

Six Sigma
Six Sigma is a way of achieving world class performance by focusing on customers' needs and eliminating defects Six Sigma is a quantitative statistical measurement that means not more than 3.4 defects per million opportunities

Case Study : Tata Chemical Failure Mode & Effects Analysis

Process Mapping & Failure Mode and Effects Analysis

Agenda
Introduction to TCL Context and Need for FMEA Introduction to FMEA Definition of terms Steps in performing an FMEA Introduction to the FMEA & S-O-D Tables Methodology Adopted Deliverables from FMEA Action Plan

GEOGROPHICAL LOCATION OF MITHAPUR

GEOGROPHYCAL MAP

PROFILE
One of the major units of TATA Group Started in 1939 Largest Inorganic Chemical Complex in ASIA Largest manufacturer of Soda Ash in INDIA Other products are Sodium Bicarbonate, Vacuum Iodised Edible Salt, Caustic Soda Lye, Liquid Chlorine, Hydrochloric Acid, Liquid Bromine, Inorganic Bromides, Portland & Pozzolana Cement Gas based fertilizer complex at Babrala U.P. Extensive rail siding within Mithapur works. Produces wealth from waste Acquired Certification of ISO - 9001 : 2000 ; ISO - 14001 Commendation for NQ Award

Where We are

Winds of Change in Tata Chemicals The Old Economy

Competitive Environment Gradual evolutionary change Stability Clearly defined industry boundaries Power from incumbency Domestic markets Employee loyalty

Winds of Change in Tata Chemicals

More players crowd the marketplace Customer does backward integration Import duties keep dropping Environment laws Become more stringent Govt. committed to deregulate Urea in the next five years ANSAC targets India Intense price competition

The New Economy

Competitive Environment Frequent, discontinuous change Creative destruction Competitive advantage hard to sustain Global markets Instant access to unlimited employment opportunities

Chinese start dumping SA Customised demands on product specs Competitor enhances capacity Unstable national policy/ environment - Urea

Cost of Poor Quality

Scrap, Rework Warranty
Collaborative Responsiveness

TATA CHEMICALS LIMITED

CompetitiveExcellence
Relentless Cost Focus Speedy Execution

Commonly measured failure costs

Our Cultural Pillars

Engineering Time Management Time Shop & Field Downtime Increased Inventory Decreased Capacity Delivery problems Lost orders

Hidden Failure Costs

(Statistical Process Control)

S PC

Bench Marking

Process Mapping

Failure Mode and Effects Analysis (FMEA)

Structured analysis for identifying ways & methods in which the product or processes can fail and then plan to prevent those failures. FMEA is a proactive tool for reducing defects and nonconformities. A before-the-event action, not an after-the-fact exercise.

DOE

6s
8-D Problem Solving Tech.

FMEA

Advantages of FMEA
1. Identifies process deficiencies 2. Identifies the critical characteristics and helps in developing control plans 3. Establishes a priority of corrective actions 4. Assists in the analysis of the process 5. Documents the rationale for changes

Introduction
FMEA is a structured approach in : Identifying ways in which a product / process can fail to meet critical customer requirements. Estimating the risk of causes with regard to these failures. Preparing control plan for preventing these failures. Prioritizing the actions for improving the process. FMEA is an extremely important tool for each phase of Six Sigma strategy viz. Measure, Analyze, Improve, Control.

Definition of terms

Definition of terms

Failure Mode : It is a manner in which a part or a process can fail to meet specifications. It is usually associated with defect or non-conformities. Examples : Missing part, Off specification parts (Oversized, Undersized) etc.

Cause : Causes are sources of variation which are associated with key process inputs. Cause can be best defined as a deficiency which results in a failure mode. Examples : Instructions not followed, Lack of experience, incorrect documentation, Poor handling etc.

Definition of terms

Relationship of Cause, Failure mode & Effect

Effect : Effect is the impact on the customer (both internal & external) if the failure mode is not prevented or corrected. Examples : Customer dissatisfaction, Frequent product breakdowns, Customer downtime.

Cause

Failure Mode

Effect (Failure)

Causes

Causes

Causes

Steps in FMEA process

Prevent or Detect

Develop a process map & identify process steps. List key process inputs for each process.

Failure Mode

List key process outputs for satisfying process requirements. List ways the process inputs can vary (causes) and identify associated failure modes & effects. Assign severity occurrence and detection rating for each cause.

Effect (Failure)

Causes

Causes

Causes

Steps in FMEA process

Calculate risk priority number ( RPN) for each potential failure mode. Determine recommended actions to reduce RPNs. Establish time frame for corrective actions. Take corrective actions. Put all controls in place.

Ranking Parameters employed

Severity (SEV) : Severity indicates how severe is the impact of the effect on the customer. Occurrence (OCC) : This indicates the likelihood of the cause of the failure mode to occur. Detection (DET) : This indicates the likelihood of the current system to detect the cause or failure mode if it occurs. Risk priority number : This number is used to place priority to items for better quality planning. RPN = SEV X OCC X DET

Severity-Occurrence-Detection Tables
Rating 1 Degree of Severity Customer will not at all observe the adverse effect Likelihood of Occurrence Very remote possibility Ability to detect Sure that the potential failure will be detected & prevented before reaching next customer Almost sure that the potential failure will be detected before reachig the next customer Less chances that the potential failure will reach the next customer undetected

Rating 6

Degree of Severity Warranty repairs

Likelihood of Occurrence Modearate failure rate without supporting documents

Ability to detect Controls are not likely to detect or prevent the potential failure from reaching the next customer Less chances that the potential failure will be detected or prevented before reaching the next customer Very less chances that the potential failure will be detected or prevented before reaching the next customer Remote chances of Existing controls will not detect the potential failure

High degree of customer dissatisfaction

High failure rate with supporting documents

Customer will experience slight discomfort

Low failure with supporting documents

Customer will experience annoyance because of slight degradation of performance

Low failure without supporting documents

Vey high degree of customer dissatisfaction

High failure rate with supporting documents

Negative impact on the customer

Failure is almost certain

Customer dissatisfied due to reduced performance

Occasional failures

Some controls may detect the potential from reaching the next customer Moderate chances potential failure reach next customer

10

Negative impact on the customer, people & society

Assured failure

Customer is uncomfortable

Moderate failure rate with supporting documents

It is certain Existing controls will not detect the potential failure

FMEA Table: ( Column 1 to 9 )

List effects of each failure mode List causes for each failure mode
2 Potential failure mode 3 Potential failure effect 4 SEV

List how the cause is presently being controlled

RPN= SEV*OCC*DET

Designates people responsible for corrective action

RPN is recalculated on completion of corrective action

1 Process Part No.

5 Potential causes

6 OCC

7 Current Controls

8 DET

10
RPN

11 Responsib ility

12 SEV

13 OCC

14 DET

15 RPN

Actions Recommended
List actions recommended on RPN pareto

1 2 3 4 5 List failure modes for each step

Rank severity on 1 to 10 scale

Rank occurrence on a 1 to 10 scale

Rank how well cause/failure can be detected on 1 to 10 scale

Methodology Adopted
Step-1
Identification of processes.

Methodology Adopted
Step-5 Listing the Potential Failure Modes, Effects, Causes and Current Controls. Step-6 Determining the ratings for Severity, Occurrence and Detection.

Step-2
Walking the process.

Step-3
Generation of Process Flow Diagram.

PROCESS FLOW DIAGRAM

Step-4
Validation of Process Flow Diagram.

POTENTIAL FAILURE MODE AND EFFECT ANALYSIS

POTENTIAL FAILURE MODE AND EFFECT ANALYSIS

PROCESS FUNCTION REQUIRE MENTS POTENTIAL POTENTIAL SE FAILURE EFFECTS OF V MODES FAILURES POTENTIAL CAUSES OF FAILURES

O CC

CURRENT DE PROCESS T CONTROLS

RP N

PROCESS FUNCTION REQUIRE MENTS

POTENTIAL POTENTIAL EFFECTS FAILURE MODES OF FAILURES

SEVE RITY

POTENTIAL CAUSES OF FAILURES improper firing, abnormal flame propagation Low air flow rate and hence low O2 Low ID Fan Step & Damper Position electrical/mechanic al/instrumental Mechanical

OCC URE NCE

CURRENT PROCESS CONTROLS Shell temp. scanner, visual and pyrometer inspection DCS monitoring air flow rate DCS monitoring air flow rate DCS Monitoring Creep measurement every shift Daily inspection & stock checking DCS monitoring & interlocking, PM schedule

DE TE RPN CTI ON 2 64

Refractory lining failure

plant shutdown

Refractory Kiln Shutdown; lining 8 Process failure failure

-Improper firing; -Abnormal flame propagation Low air flow low O2

Shell temp. scanning, 4 Pyrometer 2 & visual inspection monitoring

excessive CO formation

42

64
Kiln operation

Improper air supply

Improper clinker formation Plant shutdown

6 8

3 3

2 2

36 48

Kiln Operation

Main drive hang up Pier support malfunction Limited fuel stock

excessive CO Improper formation

7 rate & hence 3 of air flow

Low ID Fan Step & Damper Position

air supply

rate in DCS monitoring

42 36

Plant shutdown

72

Improper clinker formation

plant shutdown Environmental hazards leading to plant shut down

Improper planning Mechanical / electrical

28

3 of air flow
rate in DCS

ESP failure

10

60

Methodology Adopted
Step-7 Find out Critical Tasks on the basis of RPN.

Departments Covered
Cement Plant (10) Salt Vacuum (5) Power Plant (4) Soda Ash (9) Analytical Lab (5) Marine (7) SAMG (5) CCG* (6) SCM* (5)

FMEA Table
Step-8
Preparing the critical task table and identification of KPMs for the Critical Tasks.

CRITICAL TASK TABLE

* Processes are mapped,FMEA to be performed

Deliverables of FMEA
-A list of potential failure modes ranked by the RPN.
-A list of critical and/or significant parameters to track. -A list of recommended actions to address the critical tasks and failure modes. -A potential list to eliminate the cause of failure modes, reduce their occurrence, and improve defect detection.

Action Plan
Critical tasks that have been identified for each process should be targeted for improvement. Recommendation & implementation of actions to reduce the occurrence of the cause of failure and/or improving the current controls for detection of cause or failure mode Track the Key Performance Indicators (KPIs) of the critical tasks.

10

Action Plan

Case: Shipping logistics

Identify causes creating disturbances in the process based on the analysis of the charts. Once the actions implemented yield satisfactory results, the next iteration of the FMEA is to be performed.

Situation:
GE Appliance products, such as microwave ovens and air conditioners, are being produced in Asia and shipped to US customers, such as Wal-Mart Delivery performance is very erratic and the average on-time delivery is about 85%
Source: Yan Wang, University of Iowa

Shipping logistics (cont.)

Situation:
Product arrives in the US at Los Angeles From the port, the product is taken either to a GE distribution center or to a customer designated forwarder Product is then cross docked and sent on to final distribution centers via rail, truck-on-rail, or truck

Shipping logistics (cont.)

Process map

Shipping logistics (cont.)

DMAIC steps
Define Phase A team is assembled to attack this problem. The team includes suppliers, 3rd party vendors, GE logistics people, finance, sales, and customers The supply chain process is mapped from the supplier to the end customer The current performance is measured by looking at data from the previous 6 months. Capability of this process is 1.5 sigma currently All of the many inputs are examined and it appears that 2 areas are the vital inputs, the shipping decision by the supplier and getting the product through the port of LA Further investigation by the team yields some changes in procedure that reduces the problem Documentation and procedures are updated

Shipping logistics (cont.)

Process improvement
Old Procedure
GE specifies when products produced and shipped Supplier would comply by selecting first ship going to the US Shipping time 8 to 18 days Supplier notifies GE system (often delayed) and freight forwarder with paperwork

New Procedure
GE specifies when products produced and delivered to US Supplier complies by selecting the right ship Shipping time 8 days Supplier notifies freight forwarder with paperwork, and freight forwarder communicates through GE system

Measure Phase Analyze Phase Improve Phase Control Phase

11

Shipping logistics (cont.)

Results:
On time delivery increased to 97% Transportation costs reduced by $300,000 Inventory (cash flow) reduced by $1,000,000 Capability Raised to 3.5 sigma
Typical costs/benefits w.r.t. 6s

So what is 6s?
Fundamentally, it is an old idea consistent with TQM. It is a culmination of
Continuous improvement (no organization is 6s); Get it right the first time; Share and learn and do that transparently and collectively; It is usually the next step in quality; Customer focused (remember defects?); Very well packaged; No particular certification process (if you looking for a normative framework, you may end up being disappointed)

Six sigma is
A measure of capability of a process A goal for improvement A system of management to achieve lasting business leadership and top performance

Whats the point? There are two aspects to six sigma the statistical aspect and the business aspect. Both are important and complementary.

I like it because it covers the entire gamut of

Philosophy, methodology, technique and tool

Six Sigma Applies to Products & Services, Not the Companies Who Create Them
A company with six sigma is not assured financial success. We must distinguish between six sigma products and processes, and six sigma companies. The six sigma strategy creates specific improvement goals for every process within an organization, allowing them to understand and incorporate technological advances lurking on the horizon. Six Sigma forces organizations to reexamine the way in which work gets done, rather than tweaking existing systems.

It simplifies systems and processes, improves capability, and ultimately finds a way to control systems and processes permanently. Even a six sigma product will fail if brought to market too late or into a market with no demand. THIS IS WHY companies must achieve Six Sigma in everything they do.

Quality Function Deployment

Is a structured method that is intended to transmit and translate customer requirements, that is, the Voice of the Customer through each stage of the product development and production process. These requirements are the collection of customer needs, including all satisfiers, exciters/delighters, and dissatisfiers.

Quality Function Deployments House of Quality

Correlation

Matrix

The House of Quality

6

Design Attributes
2 1 5

Importance Rankings

Customer Needs

Relationships between Customer Needs and Design Attributes

Customer Perceptions

Costs/Feasibility
8

Engineering Measures

12

Building the House of Quality

1. 2. 3. 4. 5. 6. Identify Customer Attributes Identify Design Attributes / Requirements Relate the customer attributes to the design attributes. Conduct an Evaluation of Competing Products. Evaluate Design Attributes and Develop Targets. Determine which Design Attributes to Deploy in the Remainder of the Process.

1. Identify Customer Attributes

These are product or service requirements IN THE CUSTOMERS TERMS. Market Research; Surveys; Focus Groups. What does the customer expect from the product? Why does the customer buy the product? Salespeople and Technicians can be important sources of information both in terms of these two questions and in terms of product failure and repair. OFTEN THESE ARE EXPANDED INTO Secondary and Tertiary Needs / Requirements.

2. Identify Design Attributes.

Design Attributes are Expressed in the Language of the Designer / Engineer and Represent the TECHNICAL Characteristics (Attributes) that must be Deployed throughout the DESIGN, MANUFACTURING, and SERVICE PROCESSES. These must be MEASURABLE since the Output will be Controlled and Compared to Objective Targets. The ROOF of the HOUSE OF QUALITY shows, symbolically, the Interrelationships between Design Attributes.

3.Relating Customer & Design Attributes

Symbolically we determine whether there is NO relationship, a WEAK one, MODERATE one, or STRONG relationship between each Customer Attribute and each Design Attribute. The PURPOSE it to determine whether the final Design Attributes adequately cover Customer Attributes. LACK of a strong relationship between A customer attribute and any design attribute shows that the attribute is not adequately addressed or that the final product will have difficulty in meeting the expressed customer need. Similarly, if a design attribute DOES NOT affect any customer attribute, then it may be redundant or the designers may have missed some important customer attribute.

4. Add Market Evaluation & Key Selling Points

This step includes identifying importance ratings for each customer attribute AND evaluating existing products / services for each of the attributes. Customer importance ratings represent the areas of greatest interest and highest expectations AS EXPRESSED BY THE CUSTOMER. Competitive evaluation helps to highlight the absolute strengths and weaknesses in competing products. This step enables designers to seek opportunities for improvement and links QFD to a companys strategic vision and allows priorities to be set in the design process.

5. Evaluate Design Attributes of Competitive Products & Set Targets.

This is USUALLY accomplished through in-house testing and then translated into MEASURABLE TERMS. The evaluations are compared with the competitive evaluation of customer attributes to determine inconsistency between customer evaluations and technical evaluations. For example, if a competing product is found to best satisfy a customer attribute, but the evaluation of the related design attribute indicates otherwise, then EITHER the measures used are faulty, OR else the product has an image difference that is affecting customer perceptions. On the basis of customer importance ratings and existing product strengths and weaknesses, TARGETS and DIRECTIONS for each design attribute are set.

13

6. Select Design Attributes to be Deployed in the Remainder of the Process

This means identifying the design attributes that: have a strong relationship to customer needs, have poor competitive performance, or are strong selling points. These attributes will need to be DEPLOYED or TRANSLATED into the language of each function in the design and production process so that proper actions and controls are taken to ensure that the voice of the customer is maintained. Those attributes not identified as critical do not need such rigorous attention.

Using the House of Quality

The voice of the customer MUST be carried THROUGHOUT the production process. Three other houses of quality are used to do this and, together with the first, these carry the customers voice from its initial expression, through design attributes, on to component attributes, to process operations, and eventually to a quality control and improvement plans. In Japan, all four are used. The tendency in the West is to use only the first two.

Design Attributes
Customer Attributes

Component Attributes Design Attributes

Process Operations Component Attributes

Quality Control Plan

14

The Cascading Voice of the Customer

Motorola

Evolution of Six Sigma

Start Date Business Areas of Emphasis Production Metrics Supplier Involvement Training Emphasis Reward System Amount of Return on Cultural Investment Change Low 1.4 Billion in 7 Years

1987

Defects

Intimidation

Six Sigma Basics and Statistics Six Sigma Basics, Statistics, and Soft Skills Six Sigma Basics, Statistics, KISS for Suppliers Six Sigma Basics, Statistics, Soft Skills, Finance Skills,

Black Belt Recognition

DSEG 1990 Production (Raytheon/TI)

Defects and Cycle Time

Training Suppliers in the Tools

Black Belt Recognition

Low

Not Published

AlliedSignal 1992

Production and Design

Defects, Cycle Time, COPQ, Cost Reduction

Training Suppliers Black Belts Training Suppliers Black Belts

Black Belt Recognition Monetary Rewards Black Belt, Green Belt, and Management Promotions, Bonuses, and Stock Options

Medium

1.4 Billion in 4 Years

General Electric

1995

Production, Defects, Design, Cycle Time, R&D, and Cost Reduction, Transactional, Stable i.e., the whole Operations, organisation Annual Operating ROI (Intellectual Capital)

High

3 + Billion in 4 Years (Taken from 1999 Annual Report)

Product or Service

What Six Sigma Tells Us

We dont know what we dont know. We cant do what we dont know. We wont know until we measure. We dont measure what we dont value. We dont value what we dont measure.

TQM Focus vs. Six Sigma Focus

Total Quality Management
TQM programs often focus on improvements in individual operations with unrelated processes. The consequence is that with many quality programs, regardless of how comprehensive they are, it takes many years before all the operations within a given process are improved.

Six Sigma
Six Sigma architects focus on making improvements in all operations within a process, producing results more rapidly and effectively.

TYPICAL RESULTS: companies that properly implement Six Sigma have seen profit margins grow 20% year after year for each sigma shift (up to about 4.8s to 5.0s. Since most companies start at about 3s, virtually each employee trained in Six Sigma will return on average $230,000 per project to the bottom line until the company reaches 4.7s. After that, the cost savings are not as dramatic. HOWEVER, improved profit margins allow companies to create products & services with added features and functions that result in greater market share.

A process is any activity or group of activities that:

* takes an input, * adds value to it,and * provides an output to an internal or external customer. An industrial process is any process that depends on machinery for its creation and comes into physical contact with materials that will be delivered to an external customer. It does not include shipping, distribution, or billing processes.
A commercial process, such as ordering materials, payroll, or processing customer orders, supports industrial processes, or may stand on its own as a separate and unique business. When at least 80% or more of a process depends on human activity, we consider this a commercial process.

Roles of Six Sigma Champions

Create the vision of Six Sigma for the company. Define the path to implement Six Sigma across the organization. Develop a comprehensive training plan for implementing the Breakthrough Strategy. Carefully select high-impact projects. Support development of statistical thinking. Ask Black Belts many questions to ensure that they are properly focused. Realize the gains by supporting Six Sigma projects through allocation of resources and removal of roadblocks. Hold the ground by implementing Black Belt recommendations. Make sure that project opportunities are acted upon by the organizations leadership and the finance department. Recognize people for their efforts. Champion training is one week.

What is a Process?

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Roles of Master Black Belts

Understand the big business picture. Partner with the Champions. Get certified as Master Black Belts. Develop and deliver training to various levels of the organization. Assist in the identification of projects. Coach and support Black Belts in project work. Participate in project reviews to offer technical expertise. Help train and certify Black Belts. Take on leadership of major programs. Facilitate sharing of best practices across the corporation. Master Black Belt training consists of two one-week sessions.

Roles of Black Belts

Act as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts. Stimulate Champion thinking. Identify the barriers. Lead and direct teams in project execution. Report progress to appropriate leadership levels. Solicit help from Champions when needed. Influence without direct authority. Determine the most effective tools to apply. Prepare a detailed project assessment during the Measurement phase. Get input from knowledgeable operators, first-line supervisors, and team leaders. Teach and coach Breakthrough Strategy methods and tools. Manage project risk. Ensure that the results are sustained.

Black Belts Perform the Following Tasks

MENTORS: Cultivate a network of Six Sigma individuals at the local organization or site. TEACH: Provide formal training of local personnel in new strategies and tools. COACH: Provide one-on-one support to local personnel. TRANSFER: Pass on new strategies and tools in the form of training, workshops, case studies, and local symposia. DISCOVER: Find application opportunities for Six Sigma strategies and tools, both internal and external (e.g. suppliers and customers). IDENTIFY: Highlight / surface business opportunities through partnerships with other organizations. INFLUENCE: Sell the organization on the use of Six Sigma strategies and tools.

Characteristics of Six Sigma Black Belts

Highly respected by superiors, peers, and subordinates. Understands the big picture of the business. Focuses on results and understands the importance of the bottom line. Speaks the language of management (money, time, organizational dynamics, etc.) Committed to doing whatever it takes to excel. Sponsored by a vice president, director, or business unit manager. Is an expert in his or her specific field. Possesses excellent communication skills, both written and verbal. Inspires others to excel. Challenges others to be creative. Capable of consulting, mentoring, and coaching. Drives change by challenging conventional wisdom, developing and applying new methodologies, and creating innovative strategies. Possesses a creative, critical, out-of-the-box intellect. Allows room for failures and mistakes with a recovery plan.

Characteristics of Six Sigma Black Belts

Accepts responsibility for choices. Views criticism as a kick in the caboose that moves you a step forward. Encourages commitment, dedication, and teamwork. Unites and inspires a team to a core purpose. Able to communicate all sides of an issue. Solicits diverse ideas and viewpoints. Empathizes. Promotes win-win solutions. Disagrees tactfully and does not overreact. Acts decisively under pressure. Anticipates and confronts problems early and corrects causes.. Effectively identifies priorities from a business standpoint. Manages limited resources in a highly efficient and effective manner. Careful not to assign an unrealistic number of tasks to any team member.

Characteristics of Six Sigma Black Belts

Understands and respects that people have limitations. Displays a genuine concern and sensitivity toward others. More concerned about business success than personal gain. Does not lord her or his expertise over others. Recognizes that results count more than fancy titles.

How Many Black Belts Does an Organization Need?

Revenues/(1 million) = Number of Black Belts Number of Black Belts/(10) = Number of Master Black Belts

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A Black Belts Course of Study

The Twelve M-A-I-C Objectives
MEASURE
the frequency defects where occur the process Select CTQ Characteristics; Define Performance Standards; Validate Measurement Systems. of when and defects

Roles of Green Belts

Function as Green Belts on a part-time basis, while performing their regular duties. Participate on Black Belt project teams in the context of their existing responsibilities. Learn the Six Sigma methodology as it applies to a particular project. Continue to learn and practice the Six Sigma methods and tools after project completion. Green Belt training consists of two three-day sessions with three weeks in between.

ANALYZE Establish Product Capability;

Define Performance Objectives; Identify Variation Sources.

IMPROVE

Screen Potential Causes; Discover Variable Relationship; Establish Operating Tolerances. Validate the Measurement System; Determine Process Capability; Implement Process Controls.

CONTROL the
process so that it stays fixed

Thank You !

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