BASICS OF SIX SIGMA

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INTRODUCTION

Participants Names Roles Expectations from this training

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What is Six Sigma

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What is Six Sigma?

Sigma is a measurement that indicates how a process is performing Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process. Six sigma is a fact-based, data-driven philosophy of improvement that values defect prevention over defect detection.

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What is Six Sigma? Philosophy: The philosophical perspective views all works as a
processes that can be defined, measured, analyzed, improved & controlled (DMAIC). Processes require inputs & produce outputs. If you control the inputs, you will control the outputs. This is generally expressed as the y= f (x) concept.

Set of Tools: Six Sigma as a set of tools includes all the

qualitative and quantitative techniques used by the six sigma expert to drive process improvement. A few such tools include statistical process control (SPC), Control charts, failure mode & effects analysis, process mapping etc.

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What is Six Sigma? Methodology: This view of Six Sigma recognizes the underlying
and rigorous approach known as DMAIC. DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions. While DMAIC is not only Six Sigma Methodology in use, it is certainly the most widely adopted and recognized.

Metrics: In simple terms, Six Sigma quality performance means

3.4 defects per million opportunities.

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A little bit of History .

Six Sigma was developed by Bill Smith, QM at Motorola Its implementation began at Motorola in 1987 It allowed Motorola to win the first Baldrige Award in 1988 Motorola recorded more than $16 Billion savings as a result of Six Sigma Several of the major companies in the world have adopted Six Sigma since then . Texas Instruments, Asea Brown Boveri, AlliedSignal, General Electric, Bombardier, Nokia Mobile Phones, Lockheed Martin, Sony, Polaroid, Dupont, American Express, Ford Motor,..

The Six Sigma Breakthrough Strategy has become a Competitive Tool

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Sigma as a Measure of Quality 2 3 4 5 6

Process Process Capability Capability

DPMO DPMO 308,537 66,807 6,210 233 3.4

Defect DefectPer Per Million Million Opportunities Opportunities

RTY RTY 69.1% 93.3% 99.4% 99.97% 99.99966%

Rolled Rolled Throughput ThroughputYield Yield (Long (LongTerm) Term) Sigma Sigmais isaa statistical statistical unit unit for for measuring measuring quality quality It It is is correlated correlated to to the the defect defect rate rate and and the the complexity of the complexity of the process process/ /product product

Six Sigma is a Standard of Excellence. It means no more than 3.4 Defects per Million Opportunities.
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Why Six Sigma

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The Classical View of Performance Practical Meaning of 99% Good

20,000 lost articles of mail per hour Unsafe drinking water almost 15 minutes each day 5,000 incorrect surgical operations per week 2 short or long landings at major airports each day 200,000 wrong drug prescriptions each year No electricity for almost 7 hours each month
3 Capability 4 Capability 6 Capability Long Term Yield 93.32% Long Term Yield 99.38% Long Term Yield 99.99966%
10

Historical Standard Current Standard New Standard

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Benchmarking Chart
1,000,000

100,000

Restaurant Bills

Order Taking Airline Baggage Handling Payroll Processing

10,000

Average Company Purchased Material Reject Rate

1,000

100

10 World Class 1 2 3 4 5 6 7

Domestic Airline Flight Fatality Rate 0.43 PPM

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Six Sigma Results

Defects are eliminated Production and development costs are reduced Cycle Times and Inventory Levels are reduced Profit Margin and Customer Satisfaction are improved

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1 Sigma Shift Improvement Yields

20% Margin Improvement 12% - 18% Capacity Increase 12% Workforce Reduction 10% - 30% Capital Reduction

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Six Sigma & Cost of Poor Quality (COPQ)

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Cost of Poor Quality (COPQ) Correlation

Process Process
Quality Quality

Control Control

is is

pre-requisite pre-requisite

for for

error error

free free

COPQ COPQis isa aresult resultof ofpoorly poorlycontrolled controlledprocess process Process ProcessControl Controlcan canbe bemeasured measuredin inPPM/Yield PPM/Yield PPM/Yield PPM/Yield measurements measurementsare arecorrelated correlatedto toCOPQ COPQ

Six Six Sigma Sigma has has shown shown that that the the Highest Highest Quality Quality Producer Producer is is also also the theLowest LowestCost CostProducer Producer

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What is the Cost Poor Quality

Internal InternalCosts Costs Scrap Scrap

Rework/Repair Rework/Repair Downtime Downtime Redesign Redesign Excess ExcessInspection Inspection Excess ExcessInventory Inventory

External ExternalCosts Costs Warranty Warranty

Retrofits Retrofits Service ServiceCalls Calls Recalls Recalls Lost LostSales Sales Long LongCycle CycleTimes Times

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Components of Cost of Poor Quality

People People(Indirect (IndirectLabor) Labor) Rework Rework Inspection Inspection Material MaterialHandling Handling Maintenance Maintenance Setup Setup Excess ExcessOvertime Overtime Labor LaborVariance Varianceoff offstandard standard Inventory Inventory Raw RawMaterial MaterialHolding HoldingCost Cost WIP Holding Cost WIP Holding Cost Finished FinishedGood GoodHolding HoldingCost Cost Obsolescence Obsolescence Inventory InventoryShrinkage Shrinkage Maintenance Maintenance Maintenance Maintenance Repairs Repairs Rearrangement Rearrangement Defects Defects Scrap Scrap Rework Rework Defects Defects Warranty Warranty& &Recalls Recalls Returned ReturnedGood GoodHandling Handling Premium PremiumFreight Freight Air AirFreight Freight Expedited ExpeditedTruck TruckFreight Freight

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COPQ & Sigma / DPMO Relationship COPQ

30-40% of Sales 20-30% of Sales 15-20% of Sales 10-15% of Sales <10% of Sales

Sigma
2.0 3.0 4.0 5.0 6.0

DPMO
308,537 Non Competitive 66,807 6,210 Industry Average 233 3.4 World Class

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COPQ & Sigma/Yield Relationship COPQ

30-40% of Sales 20-30% of Sales 15-20% of Sales 10-15% of Sales <10% of Sales

Sigma
2.0 3.0 4.0 5.0 6.0

Yield
5% 93% 99.4% 99.976% 99.999655% World Class Industry Average Non Competitive

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Six Sigma Improvement Strategy

Know Knowwhat whatis isImportant Importantto tothe theCustomer Customerand andto tothe theBusiness Business Reduce ReduceDefect DefectLevels Levelsby: by: 1. 1. Reducing Reducingthe theVariation Variation 2. 2. Centering Centeringaround aroundthe theTarget Target

Long Term

LSL
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The Goals of Six Sigma Improved ImprovedCustomer CustomerSatisfaction Satisfaction

Defect DefectReduction/Elimination Reduction/Elimination Yield YieldImprovement Improvement Reduced ReducedCOPQ COPQ Improved ImprovedProcess ProcessCapability Capability Stretch StretchGoals Goals Target Target6 6Sigma Sigmastandards standards Process ProcessUnderstanding Understanding Constant ConstantMeasurement Measurementof ofKey KeyMetrics Metrics Breakthrough BreakthroughImprovement Improvement

Six-Sigma Six-SigmaObjectives ObjectivesAre AreDirectly Directlyand andQuantifiably Quantifiably Connected Connectedto tothe theObjective Objectiveof ofthe theBusiness. Business.
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A Final Note on Philosophy

Six SixSigma Sigmais isa arelentless, relentless,constant constant Journey Journeyof ofImprovement Improvement

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Phases of Six Sigma

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Five Phases of Six Sigma

Define
Measure Analysis Improve Control

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Define Phase Tools

Voice of Customer (VOC)

CT Matrix Business Matrix Pareto Analysis Project Charter Team Selection (ARMI ) Top Level Process Map (SIPOC)

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Define

Voice of Customer (VOC)

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Establishing Customer Focus

Customer Anyone Anyone internal internal or or external external to to the the Customer
organization organization who who comes comes in in contract contract with with the the product product or oroutput outputof ofwork work

Quality Quality Performance Performance to to the the standard standard expected expected by by
the theCustomer Customer

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The Customer Problem

Customers willnot notrepurchase repurchasea acompanys companysproduct productif ifthey theyare are Customers will
not notsatisfied satisfiedwith withthe thecurrent currentcompany companyproduct. product. The The stronger stronger the the degree degree of of satisfaction satisfaction with with a a companys companys current current product product or or service, service, the the greater greater the the likelihood likelihood that that a a customer customer will will repurchase repurchasefrom fromthe thesame samecompany. company.

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Variation Is The Enemy in Achieving Customer Satisfaction

Uncertainty Uncertainty
Unknown Unknown Variation Disbelief Disbelief Risk Risk Defect DefectRate Rate

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What Do You Measure Now?

What WhatNumbers Numbersget getthe themost mostattention attentionin inyour yourarea? area? What WhatQuality QualityMeasurements Measurementsdo doyou youhave? have? Do Dothey theyhave havea aCustomer CustomerFocus? Focus? Do Dothey theyhave havea aQuality QualityFocus? Focus? Do Dothey theyhave havean anInput InputFocus? Focus? How Howdo doyou youuse usethese theseMeasures? Measures? Switching to a Sigma base measurement system

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Measure Measureof ofVariation Variationand andQuality Quality Measure Measureof ofProcess ProcessCapability Capability
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What Do You Measure Now?

Driving value from the Need Do interaction

Customer

Supplier

Need

Do

Customers Customersand andSuppliers SuppliersExchange ExchangeValue Value Through Throughthe theNeed-Do Need-DoInteraction Interaction
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Maximizing the Need/Do Interaction

Delivery Cycle Time Price Supplier

Need

Customer

Do

Cost Quality Defects

Supplier Supplierstrives strivesfor forperformance performancein inCycle CycleTime, Time,Cost Costand andDefects Defects To ToMeet Meet Customers Customersexpectations expectationsin inDelivery, Delivery,Price Priceand andQuality Quality
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Critical CriticalTo To Matrix Matrix CTs

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Key Questions

What What does does the the phrase phrase critical critical to to satisfaction satisfaction mean mean
in CTS interms termsof ofa acustomer? customer? CTS What What does does the the phrase phrase critical critical to to quality quality mean mean in in terms CTQ termsof ofa aproduct productor orservice? service? CTQ What What does does the the phrase phrase critical critical to to delivery delivery terms termsof ofa aproduct productservice? service? CTD CTD What What does does the the phrase phrase critical critical to to cost cost mean mean mean mean in in in in terms terms

of CTC ofa aproduct productor orservice? service? CTC What What does does the the phrase phrase critical critical to to process process mean mean in in terms CTP termsof ofa aproduct productor orservice? service? CTP

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CT Concept
Need Do Quality Defect-free Delivery Cycle time -Critical to Delivery Price Cost -Critical Cost to Cost

CTQ1 -Critical to Quality CTQ2 CTQ3 Processes CTP1 -Critical to Process 1 CTP2

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CTQ and CTP Characteristics

CTQ1 -Critical to Quality CTQ2 CTQ3 Processes CTP1 - Critical to Process CTP2

Output

Y1

Input

f1 (X)

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Critical to Characteristics
The The inherent inherent variation variation of of any any dependent dependent variable variable (Y) (Y) is is determined determined by by the the variations variations inherent inherent in in each each of of the the independent independentvariables variablesf(x). f(x). Product or Service requirement that impacts Quality, Delivery or Cost Product Capability Probability of Defects Critical-to-Quality characteristic CTQ1 Defect Opportunity
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Y = f (X)

One of the vital few process variable (x) that significantly affect Y

Process Capability Probability of Defects Critical-to-Process characteristic CTP1 Control Opportunity

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Probability of Defects

The Focus of Six Sigma

Y = f (X)

Y Y Dependent Dependent Output Output Effect Effect Symptom Symptom Monitor Monitor

X ..XN X 1 1..X N Independent Independent Input Input Variables Variables Cause Cause Problem Problem Control Control

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CT Matrix Components Y = f (X1,X2,XN)

Translation of customer needs into product or service requirements in terms of Quality, Delivery and Cost. These are the CTQ,CTD and CTC Characteristics Breakdown of the processes required to produce the product or service. Identification of projects by understanding the relationship between product or service requirements and the processes used. Identification of the process parameters f(x1,x2.xN) that affect the requirements.

f(X)

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Business BusinessMetrics Metrics

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Business Metrics

Following FollowingBusiness BusinessMetrics Metricscan canbe beused usedin inSix SixSigma SigmaProjects. Projects.
Defect Defectper perUnit Unit(DPU) (DPU) Defects Defectsper perMillion MillionOpportunities Opportunities(DPMO) (DPMO) Throughput ThroughputYield Yield(Yield) (Yield) Rolled RolledThroughput Throughput Yield Yield (RTY) (RTY) Parts Partsper perMillion Million(PPM) (PPM)

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Business Metrics

An An example example will will illustrate illustrate the the use use of of business business metrics metrics used used in in
previous previous slides. slides. Example: Example: A A process process produces produces 40000 40000 pencils. pencils. Three Three types types of of defect defect can can occur occur& & number numberof ofoccurrences occurrencesare: are: Blurred Blurredprinting printing 36 36 Wrong Wrong dimensions dimensions 118 118 Rolled Rolledends ends --11 11

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Business Metrics Defect Defect per per Unit Unit (DPU): (DPU): = = Total Totalnumber numberof ofdefects defects//No. No.of ofunits units
= =165 165//40000 40000= =0.004125 0.004125

Throughput Throughput Yield Yield (Yield): (Yield): -DPU -0.004125 -DPU = -0.004125 = = =e e =e e = 0.996 0.996 Parts Parts per per Million Million (PPM): (PPM): = = DPU DPUx x10,00,000 10,00,000
= =0.004125 0.004125x x10,00,000 10,00,000= =4125 4125

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Business Metrics Defect Defect per per Million Million Opportunities Opportunities (DPMO): (DPMO):
To To Calculate Calculate the the number number of of opportunities, opportunities, it it is is necessary necessary to to find find the the number number of of ways ways each each defect defect can can occur occur on on each each item. item. In In this this product, product, blurred blurredprinting printingoccurs occursin inonly onlyone oneway way (the (the pencil pencil slips slips in in the the fixture), fixture), so so in in the the batch batch there there are are 40,000 40,000 opportunities opportunities for for this this defect defect to to occur. occur. There Thereare arethree threeindependent independentplaces placeswhere wheredimensions dimensionsare arechecked, checked,so so there there are are 3 3x x 40,000 40,000 = = 1,20,000 1,20,000 opportunities opportunities for for dimensional dimensional defects. defects. Rolled Rolled ends ends can can occur occur at at the the top top and and // or or the the bottom bottom of of the the pencil, pencil, so so there thereare are40,000 40,000x x2 2= =80,000 80,000opportunities opportunitiesfor forthis thisdefect defectto to occur. occur. The The total total number number of of opportunities opportunities for for defects defects is is 40,000 40,000 + + 1,20,000 1,20,000 + + 80,000 80,000 = =2,40,000 2,40,000 DPMO DPMO= =(Total (Totalno. no.of ofdefects defectsx x10,00,000) 10,00,000)//(Total (Totalno. no.of ofopportunities) opportunities) = =(165 (165x x10,00,000) 10,00,000)//(2,40,000) (2,40,000)= =687.5 687.5

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Business Metrics Rolled Rolled Throughput Throughput Yield Yield (RTY): (RTY):
RTY RTYapplies appliesto tothe theyield yieldfrom froma aseries series of of processes processes and and is is found found by by multiplying multiplying the the individual individual process process yields. yields. If If a a product product goes goes through through four four processes processes whose whose yields yields are are 0.994, 0.994, 0.987, 0.987, 0.951 0.951 & & 0.990, 0.990,then then RTY RTY= =0.994 0.994x x0.987 0.987x x0.951 0.951x x0.990 0.990= =0.924 0.924

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Exercise-1 A A car car manufacturer manufacturerproduces produces15000 15000cars carsper permonth month..Three Three
types typesof ofdefect defectcan canoccur occurat atdifferent differentstage stage& &number numberof of occurrences occurrences are: are: Initial InitialAssembly Assembly 50 50(No. (No.of ofOpportunities Opportunities 4) 4) Intermediate IntermediateAssembly Assembly 95 95(No. (No.of ofOpportunities Opportunities 2) 2) Final FinalAssembly Assembly 35 35(No. (No.of ofOpportunities Opportunities 3) 3) Calculate Calculatethe theDefects Defectsper perUnit Unit(DPU), (DPU),Defect Defectper perMillion Million Opportunities Opportunities (DPMO), (DPMO),Throughput ThroughputYield Yield& &Parts Partsper per Million Million(PPM). (PPM).

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Exercise-2 A
Process A Mixing 100# in 90# out 90%

B
Process B Making 100# in 80# out 80%

C
Process C Converting 100# in 90# out 90%

D
Process D Inspection 100# in 95# out 95%

Calculate Calculate the the Rolled Rolled Throughput Throughput Yield Yield (RTY) (RTY) for for the the above above process. process.

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Pareto ParetoCharts Charts

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Pareto Charts
Pareto Pareto Diagrams Diagrams are are an an essential essential tools tools to to help help prioritize prioritize improvement improvement targets. targets. Paretos Paretos usually usually allow allow us us to to focus focus on on the the 20% 20% of of the the problems problems that that causes causes 80% 80% of of the the poor poor performance. performance.
Pareto Chart of Damage
9 8 7 6
Count

100 80 60 40 20 0
Percent

5 4 3 2 1 0 Dam age Count Percent Cum %

Interpreting the results: Focus on improvements to scratches and chips because 75% of the damage is due to these defects.

S cratch 4 50.0 50.0

Chip 2 25.0 75.0

Bend 1 12.5 87.5

Dent 1 12.5 100.0

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Pareto Chart (Second Level)

Pareto Chart of Flaws by Period
Peel
Period = Day

Scratch Other Sm udge

Period = Evening

20 15 10 5

Flaws Peel Scratch Other Smudge

20 15 10 5 0

Period = Night

Period = Weekend

Interpreting the results: The night shift is producing more flaws overall. Most of the problems are due to scratches and peels. You may learn a lot about the problem if you examine that part of the process during the night shift.

Count

Peel

Scratch Other Sm udge

Flaws

You should drill down using third level, fourth level, etc., as far as it makes sense in solving your problem.
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Project ProjectCharter Charter

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Project Charter

The The Project Project should should be be defined defined through through a a Problem Problem Description/ Description/ Project ProjectObjective Objectiveand andinclude: include: PPM PPMor orDPMO DPMOBaseline Baselinedata data Cost Costof ofPoor PoorQuality Quality(COPQ) (COPQ) Rolled RolledThroughput Throughput Yield Yield (RTY) (RTY) Inventory Inventory or or Other OtherAppropriate AppropriateMetric Metric

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SIX SIGMA PROJECT STATUS

Project Status Summary Report
Project Details
Black Belt : Company/Plant: Process : Champion: Process Team : Problem Decsription: Arpit Upadhyay Bundy India Ltd., Baroda Double Wall tube manufacturing Vinod Dhar, Sukhdev Narayan S.H. Pathak, Jogesh Shah, M. Prejith To improve the produtivity on DW Line from 28471 to 47295 mtrs./shift Project No. Product: B 004 DW tube

Status Summary
Status: Status Date: Review Date: Start Date : End Date : In Progress 30.08.06 30.08.06 10.01.06

Process Owner : S.H. Pathak Master Black Belt: R. K. Arora

Last Review Date: 22.06.06

Metrics
Business Metric(s): 1 Critical to Delivery 2 Critical to Cost 3 Z-Score Projected Savings: 3.52 Lacs 99.06 Lacs/Annum Baseline 28471 mtrs/shift Current 30442 mtrs/shift 3.52 Lacs Target 47295 mtrs/shift

Y and Complementary Ys
1 Improve OEE 2 Increase Availability

99.06 Lacs/Annum 3 Reduce Down time

Constraints/Special Conditions
1. Target Productivity calculated based on 90% Efficiency and 7.45 hrs working time(Mini clean time reduced).

Preliminary Plan P h a s Target Date Actual Date

21.01.06 18.02.06 01.04.06

MileStones
Define 1 Team 2 Metrics 3 Process 4 Charter Measure MSA Baseline Capability Process Map X Shortlisting Root Cause Analyze 1st level cause Improve Control Statistical SolutionMonitoring Optimum Solution Standardization Implement SolutionTrain Validate Solution Maintain

D 13.01.06 M 03.02.06 A 20.03.06 I 20.06.06 C 20.07.06

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Team TeamSelection Selection(ARMI) (ARMI)

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Team Selection (ARMI) The The Six Six Sigma Sigma Team Team shall shall include include following following members. members. A AR RM M II Approver Approver Resources Resources
Champion Champion
Executive Executive Maser MaserBlack BlackBelt Belt

Members Members Interested Interested Party Party

Black BlackBelt Belt Green GreenBelt Belt Process ProcessOwner Owner Stake StakeHolder Holder Customer Customer Supplier Supplier

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Top TopLevel LevelProcess ProcessMap Map (SIPOC) (SIPOC)

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Top Level Process Map

Top Top Level Level Process Process Map Map the the basic basic steps steps or or activities activities that that will will produce produce the the output output the the essentials, essentials, without without any any extras. extras. Everyone Everyone does does these these steps steps no no argument. argument. The The Top Top Level Level Flow Flow Map Map is is the the minimum minimum level level of of process process flow flow mapping mapping required required in in order order to to begin begin a a FMEA FMEA

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Top Level Process Map

List List General General Input Input and and major major Customer Customer Key Key Output Output Variables Variables Assembly AD-SP Air Dryer Body

INPUTS Assembly Labor Procedures Materials Equipment, Fixtures Environment Cleanliness Rework

OUTPUTS Part to Print Performance to Spec Visually acceptable Leak Free Identified Clean Packaged for use Consistent standard

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Top Level Process Map

Remember Remember that that processes processes are are also also affected affected by by elements elements that that feed feed into into and and receive receive from from the the process process

Suppliers

INPUTS

Assembly AD-SP Air Dryer Body

OUTPUTS

Customers This is known as the SIPOC Model

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Basic Statistics

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Statistics The Science of:

Collecting, Describing, Analyzing, Interpreting data And Making Decisions

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Type of Data
Attribute Data (Qualitative)
Categories like Machine 1, Machine 2, Machine 3 Yes, No Go, No Go or Pass/Fail Good/Defective On-Time/Late Discrete (Count) Data # of Maintenance Equipment Failures, # of freight claims Decimal subdivisions are meaningful Cycle Time, Pressure, Conveyor Speed

Variable of Continuous Data (Quantitative)

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Measures of Central Tendency

What is the Middle Value of Distribution? Median

What value represents the distribution? Mode

What value represents the entire distribution? Mean ( x )

What is the best measures of central tendency?

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Data Distributions
Mean: Arithmetic average of a set of values Reflects the influence of all values Strongly Influenced by extreme values

Median: Reflects the 50% rank the center number after a set of numbers has been sorted from low to high. Does not include all values in calculation Is robust to extreme scores

Mode: The value or item occurring most frequently in a series of observations or statistical data.

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Measure of Central Tendency - Mean

Find the value of n and X for the following 2 distribution.
Are the 2 Distributions Same?

n=
1 2 3 4 5 6 7 8 9

X= X=

n=

What is the Difference?

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Measures of Variability - Spread

Range R = Max Min is an easy measure of Spread

n=
1 2 3 4 5 6 7 8 9

X= X=

R= R=

n=

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Is Range a good Measure of Variability?

Find the value of n, X and R for the following 2 distribution.
Do the 2 distributions have same Variability?

n=
1 2 3 4 5 6 7 8 9

X= X=

R= R=
How do we measure average variability from the Center?

n=

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Measures of Variability (Spread)

Calculate Variance & Standard Deviation for these 2 Distributions.

n=
1 2 3 4 5 6 7 8 9

X= X=

R= R=

V= V=

S= S=

n=

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Measures of Variability
The Range is the distance between the extreme values of data set. (Highest Lowest) The Variance(S2) is the Average Squared Deviation of each data point from the Mean. The Standard Deviation (s) is the Square Root of the Variance. The range is more sensitive to outliers than the variance. The most common and useful measure of variation is the Standard Deviation.

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Sample Statistics vs. Population Parameters

X = Sample Mean

= Population Mean

S = Sample Standard Deviation

= Population Standard
Deviation

Statistics

Estimate

Parameters

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Statistical Calculations (Sample) Mean

__

Variance
Xi

X=

i =1

S2 =

2 ( ) Xi X i =1

__

n
__

n 1

Standard Deviation

Standard Deviation

= R/ d 2
N 2 3 4 6
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d2 1.128 1.693 2.059 2.326

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S =

2 Xi X ( ) i =1

__

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Statistical Calculation (Population) Mean Variance

__
2 =

2 ( ) Xi X i =1

__

Standard Deviation

=
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2 ( ) Xi X i =1

__

n
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Probability Density Functions (Shape)

The Shape of the distribution is shown by the probability Density Function. The Y axis is Probability Density and the X axis is Data Values Area Under the curve Represents the probability of finding a data point between 2 Values. Probability Density Function Defines the interrelation between the center and the spread. The distributions with known function are called Parametric and those with unknown functions are called Non-Parametric

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Distribution for a Targeted Process

If an Expert Marksman is Shooting, what place has the Highest Probability of getting a hit?

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Distribution for a Targeted Process

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Properties of Normal Distribution Normal Distribution is Symmetric

Has equal No. of Points on both Sides Mean Median and Mode Coincide

Normal Distribution is Infinite

The chance of finding a point outside tolerance is not absolutely Zero. We need to define a practical Limit of the Process

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Properties of Normal Distribution Normal Curve & Probability Areas

68 % 95 % 99.73 %

-4
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-3

-2

-1
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Lets Summarize
We need data to study, predict and improve the processes. Data may be Variable or Attribute. To understand a data distribution, we need to know its Center, Spread and Shape. Normal Distribution is the most common but not the only shape.

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Exercise-3

Calculate Calculatethe theMean, Mean,Median, Median,Range, Range,Variance Variance& &Standard Standard

Deviation Deviationfor forfollowing followingdata dataset. set. 2, 2,2, 2,5, 5,6, 6,7, 7,9, 9,9 9

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Capability Analysis

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Do we NEED Metrics and Baseline?

If Ifwe wecannot cannotmeasure measureit, it,we wecannot cannotimprove improveit. it. Metrics MetricsHelp Helpus usunderstand understandwhere wherewe westand stand Metrics Metricshelp helpus usmove movein inthe theright rightdirection. direction. Metrics Metrics provide provide objectivity objectivity to to peoples peoples feelings feelings and and perceptions. perceptions. Metrics Metrics provide provide a a common common language language and and help help us us share share information informationwithout withoutsubjectivity, subjectivity,biases biasesand andconfusions. confusions. Metrics Metricshelp helpus usset seta acommon commongoal. goal.

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Baseline
When When we we start start a a long long journey, journey, we we look look at at the the mile mile stones stones to to find findout outhow howfar farwe wehave havecome come But, But,suppose, suppose,we wedid didnot notknow knowwhere wherewe westarted, started,can canwe wetell tell how howfar farwe wehave havecome? come? Base Baseline linesets setsa astarting startingpoint pointof ofour ourjourney. journey. It Itis isthe thefirst firstmeasure measureand andtells tellsus usabout aboutas-is as-isState. State. It Italso alsohelps helpsus usto toset settargets targetsand andscope scopeout outproject. project.

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What do we need to Measure?

We Weneed needto tomeasure measurewhatever whateveris isimportant importantto tothe theproject. project. We Weneed needto totrack trackthe thefollowing followingmetrics metrics 1. 1. 2. 2. Y Y Business BusinessMetrics Metrics

3. 3. Z ZScore Score

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Why we need to Measure - Y

Y Yis isthe themetric metric(CTQ/CTD/CTC) (CTQ/CTD/CTC)that thatwe weare arefocusing focusingon. on.E.g. E.g. PPM, PPM, No. No. of of mistakes mistakes in in a a form, form, Dia Dia Variation, Variation, Power Power Factor, Factor,etc. etc. Cycle CycleTime, Time,Lead LeadTime, Time,Inventory InventoryLevel Leveletc. etc. Maintenance Maintenancecost, cost,Utility Utilitycost costetc. etc.

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What we need to Measure - Business

Business Business metrics metrics are are the the justification justification for for taking taking up up a a six six sigma sigmaproject projectand andare arerequired requiredfor formanagement managementbuy-in. buy-in. Since Since Management Management is is committing committing resources resources to to the the project, project, it it needs needsto toknow knowwhat whatwill willbe bethe thebusiness businessimpact. impact. One One or or more more business business metrics metrics are are required required to to maintain maintain management managementfocus focuson onthe theproject. project.Or Orelse, else,it itwill willbe beSix SixSigma Sigma for forthe thesake sakeof ofSix Six Business Business metrics metrics are are best best expressed expressed in in terms terms of of money money but but could couldbe beany anythat thatgive givethe thebig bigpicture picturee.g. e.g. COPQ, COPQ,Customer CustomerSatisfaction SatisfactionIndex, Index,RTY RTYexc. exc.

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What we need to Measure Z Score

Z ZScore Scoreis isthe thesigma sigmalevel levelof ofthe theprocess. process. This Thisis isa acommon commonmetric. metric. It It is is used used as as common common scale scale for for measuring measuring the the extent extent of of improvements. improvements. It Italso alsohelps helpsus usbenchmark benchmarkagainst againstworld worldclass classprocesses. processes. A A world world class class or or Six Six Sigma Sigma process process operates operates at at 6 6 Sigma Sigma Levels Levelsor ora aZ ZScore Score= =6 6

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While Setting The Metrics, Remember

The Themetrics metricsShould Shouldbe berelevant relevantto tothe theProblem ProblemStatement. Statement. If If both both Variable Variable and and Attribute Attribute Metrics Metrics are are available, available, prefer prefer Variable Variablemetric. metric. If Ifyour yourmetric metricis isa alean leanmetric metric(inventory, (inventory,cycle cycletime timeetc.) etc.)first first consider considerLean Leantools. tools. Sometimes Sometimes counter-metrics counter-metrics are are required required to to ensure ensure proper proper output. output. E.g. E.g.While WhileImproving Improvingthe themetric metric Cycle CycleTime, Time,CounterCountermetric metric Defect Defect rate rate needs needs to to be be tracked tracked so so that that the the cycle cycletime timeis isnot notreduced reducedat atthe theexpense expenseof ofQuality Quality

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The Z - Transform
Z Z Transform Transform is is used used for for a a Normally NormallyDistributed Distributedprocess. process. It far __ Itexpresses expresseshow how farvalue valueX Xis is from fromthe theCenter Center X in interms termsof of E.g. a E.g. for for a normal normal distribution distribution __ with =10, with X =70 =70 and and =10, a a the the value value X=30 X=30 has has z=(30-70)/10=z=(30-70)/10=4 4 In Inother other words words the the point point X=30 X=30 is is4 4 away awayFrom Fromthe the mean mean on on ve veSide Side

Z=
Z

X X

__

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The Z - Score
If If X X was was substituted substituted by by the the Tolerance ToleranceLimits Limits(LSL (LSL& &USL), USL), Z s Z will will tell tell how how many many s are are there there between between Tolerance Tolerance Limits Limits and and the the center center of of the the process. process. This This is is the the Sigma Sigma level level or or the the Z ZScore Score E.g. for E.g. __ for normal normal distribution distribution with =10, withX =70 =70 and and =10, LSL=30, LSL=30, Z L=(30-70)/10=-4 Z L=(30-70)/10=-4 For ForUSL=100,Z=3 USL=100,Z=3
30

Z=
4

SL X

__

70

100

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But Wait.
Every Everytime timewe wemake makea abatch, batch,do dowe weget getthe theSAME SAMEamount amountof of Variation? Variation? Why Whydoes doesthe theprocess processVARY VARYfrom frombatch batchto tobatch? batch? Can Canwe weprevent preventBatch Batchto toBatch Batchvariation variationTOTALLY? TOTALLY? Data Data from from WHICH WHICH of of these these batches batches should should be be taken taken for for calculating calculatingZ ZScore? Score? How Howmuch muchdata datais isSUFFICENT? SUFFICENT? If IfI Iget getdifferent differentZ ZScores Scoresfor fordata datacollected collectedat atdifferent differenttimes times which whichof ofthem themis isCORRECT? CORRECT?

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Well
Every Every time time we we make make a a batch, batch, we we may may NOT NOT get get the the same same amount amountof ofVariation. Variation. The Theprocess processvaries variesfrom frombatch batchto tobatch batchdue dueto toMEAN MEANSHIFT SHIFT over overa aperiod periodof oftime. time. We Wecan canMINIMIZE MINIMIZEthis thisbut butnot notprevent preventit. it. This This means means that that process process will will have have more more variation variation in in LONG LONG TERM TERMwhen whencompared comparedto toSHORT SHORTTERM TERMvariation. variation. A Aprocess processis isSix SixSigma Sigmaprocess processwhen whenthe theshort shortterm termZ ZScore Score is is6 6

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Shot Term vs Long Term

Mean Meanof ofa aprocess processshifts shiftsover over a aperiod periodof oftime. time. This This Shift Shift is is empirically empirically observed observedto tobe be1.5 1.5 So SoZlt Zlt= =Zst-1.5 Zst-1.5Approx. Approx. And AndZst Zst=Zlt+1.5 =Zlt+1.5Approx. Approx. A A Six Six Sigma Sigma Process Process has has Zst Zst =6 =6 So So a a Six Six Sigma Sigma Process Process has has Zlt Zlt=4.5 =4.5
Mean Shift

= 1.5 Zlt = 4.5 Zlt = 6

LSL

Xlt

Xst

USL

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Capability vs Performance
Zst Zst represents represents the the CAPABILITY CAPABILITY of of the the process process whereas whereas Zlt Zlt represents representsthe thePERFORMANCE PERFORMANCEover overa aperiod periodof oftime time What Whatis isCapability? Capability? Inherent Inherentability ability Due Dueto toCommon CommonCauses Causesof ofVariation Variation What Whatis isPerformance? Performance? Final FinalOutput Output Due Dueto toCommon Commonas aswell wellas asSpecial SpecialCauses Causesof ofvariation variation

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Causes of Variation Common CommonCause Causeof ofVariation Variation

Are Arean anintrinsic intrinsicpart partof ofthe theprocess process Give Giveconsistent consistentVariation Variation Affect Affecteach eachdata datapoint pointequally equally Are Arereflected reflectedin inUnit Unitto toUnit UnitVariation Variation

Special SpecialCauses Causesof ofVariation Variation

Are Areusually usuallyoutside outsidethe theprocess process Appear Appearsome sometime timeand andnot notat atthe theother othertimes times Affect Affectsome somedata datapoints pointsmore morethan thanothers others Are Arereflected reflectedin inTime Timeto totime timeVariations Variations

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Causes of Variation - Examples Common CommonCause Causeof ofVariation Variation

Usual UsualTraffic Trafficon onRoad Road Usual UsualPlay Playin inthe theSlides Slidesof ofmachine machine Human HumanAttentiveness Attentiveness Variation Variationin indimensions dimensionsin ina alot lotmanufactured manufacturedtogether. together.

Special SpecialCauses Causesof ofVariation Variation

Accident Accidenton onRoad Road Excess ExcessPlay Playin inSlide Slidedue dueto towear wearover overtime. time. Illness Illness Variation Variationdue dueto toChange Changein inlot lotor orsupplier. supplier.

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Stability
When Whenthe thevariation variationis isonly onlydue dueto tocommon commoncauses, causes,the theprocess processis issaid saidto tobe be Stable. Stable. A AStable StableProcess Processhas haspredictable predictablevariation. variation. Special causes disturb the stability Special causes disturb the stability of of the the process process due due to to which which the the Variation becomes unpredictable. Variation becomes unpredictable. A AStable Stableprocess processis isalso alsocalled calledaaprocess processin inControl Control

Xbar Chart of Stable

5 4 3
Sample Mean

Xbar Chart of Unstable

UCL=4.700

7.5

UCL=5.98
5.0

Sample Mean

2 1 0 -1 -2 -3 -4
1 3 5 7 9 11 13 15 Sample 17 19 21 23 25

_ _ X=0.442

2.5

0.0

_ _ X=0.63

-2.5

LCL=-3.817

-5.0
1

LCL=-4.73
1 3 5 7 9 11 13 15 Sam ple 17 19 21 23 25

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Capability vs Stability
Capability Capabilityhas hasa ameaning meaningonly onlywhen whena aprocess processis isstable. stable. If If a a process process is is out out of of control, control, first first we we need need to to stabilize stabilize the the process. process. Improvement Improvement in in the the inherent inherent variation variation can can be be made made only only when whenthe theprocess processis isstable. stable. Control ControlCharts Chartsare areused usedto tostudy studystability stability The The first first job job of of Six Six Sigma Sigma practitioner practitioner is is to to Identify Identify and and remove removeSpecial SpecialCauses Causesof ofVariation. Variation. Once Once the the process process is is made made predictable, predictable, the the next next job job is is to to identify identifythe thecauses causesof ofinherent inherentvariation variationand andremove removethem. them.

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Calculating Capability
Capability Can be defined as Tolerable Variation Process Variation

LSL X + 1

USL

X + 2

USL LSL Cp = 6
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T Cp = 6
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Calculating Capability
Marginal Capability

LSL X + 1

USL

X + 2 X + 3

Cp =
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6 Cp = 6
99

Cp = 1
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Calculating Capability
Six Sigma Capability

LSL

USL

X + 3 X + 6

Cp =
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Cp =

12 6
100

Cp = 2
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Calculating Capability
Calculate Cp from Upper & Lower Side
___

Cp L =
___

X LSL 3

CpU =

USL X 3
___

___

X LSL

USL X

10

12

14

16

18

20

Cp K

__ __ X LSL USL X = Min , 3 3

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Calculating Performance
Calculate Cp from Upper & Lower Side
___

PpL =
___

X LSL 3

PpU =

USL X 3
___

___

X LSL

USL X

10

12

14

16

18

20

USL LSL Pp = 6
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Capability vs Performance
USL LSL Cp = 6
__ __ X LSL USL X Cp K = Min , 3 3

Pp =

USL LSL 6

__ __ X LSL USL X PpK = Min , 3 3

If Ifthe theformula formulaare aresame, same,what whatis isthe thedifference? difference? The Thedifference differenceis isin inSigma Sigmacalculation! calculation! Sigma Sigmain inCapability Capabilitycovers coversShort ShortTerm TermVariation. Variation. Sigma Sigmain inPerformance Performancecovers coversLong LongTerm TermVariation. Variation. How Howis isthe theData Datacollection collectionDifferent? Different?

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Capability Calculation
Capability Capabilitycovers coversshort shortterm termvariation. variation. It Itrequires requiresdata datacollected collectedover overshort shortperiod periodof oftime. time. Small Small Subgroups Subgroups of of data data (Generally (Generally 3-7 3-7 sample sample size) size) are are taken. taken. Data Data points points within within a a subgroup subgroup need need to to be be of of consecutive consecutive output. output. Many Manysubgroups subgroupsare arecollected collectedover overa aperiod periodof oftime. time. The is considered to be Theaverage averagevariation variationwithin withina asubgroup subgroup is considered to be __ present presentthe theinherent inherentVariation. Variation. R = Sigma is calculated using d2 Sigma is calculated using Should Shouldbe beused usedonly onlywhen whenprocess processis isstable stable

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Performance Calculation
Performance Performancecovers coverslong longterm termvariation. variation. It Itrequired requireddata datacollected collectedover overlong longperiod periodof oftime. time. Data Data should should represent represent more more than than one one day, day, if if possible possible more more than thana amonth monthof ofvariation. variation. If If Data Data points points are are too too many, many, one one may may randomly randomly sample sample the the data datato torepresent representall alldays daysand andbatches. batches. The The Root Root Mean Mean Square Square variation variation is is considered considered to to to to 2 __ represent representthe theOverall OverallVariation. Variation. xi X Sigma Sigmais iscalculated calculatedusing using =
n 1

Should Should be be used used only only when when data data is is available available over over a a long long period periodof oftime. time.

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Capability, Performance and Z Score

__ X = Min __ X = Min
__

Cp K

Pp K

LSL USL X , 3 3 __ LSL USL X , 3 3

__ __

If If the the process process is is Stable, Stable, Collect Collect Short Short term term data data using Subgroups, using Subgroups, Calculate Cpk and Calculate Cpk and Zst=3xCpk Zst=3xCpk If If the the process process is is Unstable Unstable or or Stability Stability is is not not known, known, Collect Collect Long Long term term data data by by random sampling, random sampling, Calculate Ppk and Calculate Ppk and Zlt=3xPpk. Zlt=3xPpk. Convert Convert it it into into Short Short Term Term bench bench mark mark Z Z by byZst=Zlt+1.5 Zst=Zlt+1.5

X LSL USL X Z = Min ,

So ZLT=3 X Ppk

&
ZST=3 X CpK
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Z Score Calculation Road Map

Select Y Attribute Y Normal Calculate DPU Un-Stable Process/ Not Known Stable Process Non Normal Capability Calculation Variable Y Non-Normal

Calculate Zlt Calculate Zst

Zst is the baseline Z score

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Exercise-4
Calculate Calculate the the Z Z Score Score for for the the following following processes. processes.

1. 1. Data Dataof ofLength Lengthin inmachining machining process process has has been been collected. collected. The The required requiredlength lengthis is555 555max. max. The The Process Process has has been been behaving behaving consistently consistentlyfor forlast last6 6months. months. The Thedata datawas wascollected collectedfor forthe the first first5 5pieces piecesfor foreach eachof oflast last35 35 batches. batches.The Themean meanof ofthe thedata data is is540.26857 540.26857& &Standard Standarddeviation deviationis is10.38606. 10.38606. 2. 2. Data Datafor forCycle CycleTime Timeof ofa amolding moldingprocess processhas hasbeen beencollected. collected. The Thespecification specificationis is60-65 60-65sec. sec.The TheProcess Processhas hasbeen been behaving behavingerratically erraticallyfor forlast last8 8 months. months.The Thedata datacollected collectedfor for the thefirst first5 5pieces piecesfor foreach eachof oflast last30 30shifts. shifts.The Themean meanof ofthe the data datais is64.03827 64.03827& &Standard Standarddeviation deviationis is0.54618. 0.54618.

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Implementation of Six Sigma

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Phases of Breakthrough Strategy

Phase I: Process Measurement

Characterization

Phase II: Process Analysis Phase III: Process Improvement

Optimization

Phase IV: Process Control

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Phase of Breakthrough Strategy

Phase PhaseI: I:Process ProcessMeasurement Measurement Identify IdentifyKPIVs KPIVsand andKPOVs KPOVson onProcess ProcessMap/FMEA Map/FMEA Establish EstablishMeasurement MeasurementSystem SystemCapability Capability Establish EstablishProcess ProcessCapability CapabilityBaseline Baseline Phase PhaseII: II:Process ProcessAnalysis Analysis Update UpdateProcess ProcessMap, Map,FMEA, FMEA,Control ControlPlan Plan& &Capability Capability Identify IdentifyCritical CriticalInput InputVariable Variable Analyze AnalyzeProcess Processdata datausing usingSix SixSigma SigmaTools Tools Phase PhaseIII: III:Process ProcessImprovement Improvement Verify Verifyand andoptimize optimizeCritical CriticalInput InputVariables Variables Identify Identifyand andTest TestProposed ProposedSolutions Solutions Implement ImplementSolutions Solutionsand andConfirm ConfirmResults Results Phase PhaseIV: IV:Process ProcessControl Control Standardization Standardization//Mistake MistakeProofing Proofing Implement ImplementProcess ProcessControls Controlsand andVerify VerifyEffectiveness Effectiveness Monitor MonitorProcess Processby byControl ControlPlanHOLD PlanHOLDthe theGains Gains
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Phase I: Process Measurement

Plan Project and Identify Key Process Metrics, Inputs and Outputs
Project Selection Justification Business Metrics (RTY, COPQ, PPM) Process Mapping / Data Collection Process/Control Plan Cause & Effect Matrix / FMEA

Quantify Variation on Vital Few Variation Sources

3 Level Pareto charts Vital Few Variation Sources Gage Studies (GR&R)

Perform Short-term Capability Study

Short-term and Long-term Capability CpK, PpK SPC Charts Sigma (Z) Calculations
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Phase II: Process Analysis

Update Project Baseline and Status
Project Status From Metric Graph with Goal Line Process Map / FMEA / Control Plan

Identify Root Causes of Variation

Multi-Vari and Horizontal Root Cause Charts SPC Charts Fishbone Chart, Documenting Input Variables Hypothesis Tests to Verify Critical Input Variables List of Critical Input Variables List of Containment Actions

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Phase III: Process Improvement

Update Project Baseline and Status
Project Status From Metric Graph with Goal Line Process Map / FMEA / Control Plan

Optimize Process
Test and Verify Critical Input Variables Use Statistical Tools to Optimize Process Identify, Plan and Test Proposed Solutions Select Solutions and Confirm Results Implement Solutions and Improvement Plans Document Improvement Plans and Actions

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Phase IV: Process Control

Update Project Baseline and Status
Project Status From Metric Graph with Goal Line Process Map / FMEA / Control Plan

Optimize Process
Each Standardization and Mistake Proofing Implement Process Controls Verify Effectiveness of Process Controls and System Improvements Monitor Process by Control Plan HOLD and GAINS

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Statistical Problem Solving

Physical Problem

Statistical Problem

Define the Problem in terms of Y and Probable Xs Measures the Extent of Problem Shortlist the Xs for analyses Collect Data Eliminate important Xs that are not

Finalize Xs for Optimization Confirm the short listed Xs Find Y=f(X) or Best case for the selected Xs Identify Physical controls based on constraints Verify controls and Maintain new

Physical Solution

Statistical Solution

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THANK YOU

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