INTRODUCTION TO SIX SIGMA

WHY TO ATTAIN THIS WORKSHOP?

Organization is considering implementing Six Sigma
and you want to understand what is it and how it
works?
You are responsible in some way for Six Sigma
initiatives.
You have heard about six sigma and you are curious
about how it works and what result you can expect
from putting it to work for our organization.

PURPOSE OF SIX SIGMA

To make customer happier and

increase profits

WHAT RESULTS HAVE BEEN ACHIEVED WITH SIX SIGMA?

Effect of Quality
Benefits for customers
Financial Benefits.
Benefits for employees

SIX SIGMA : FROM WHERE IT CAME?

1985 : Dr. Mikel J Harry wrote a paper relating early failures to quality.

SIX SIGMA AND FORTUNE 500 COMPANIES

WHAT IS SIX SIGMA

SIX SIGMA : AN AGGRESSIVE GOAL

PILOTS SIX SIGMA PERFORMANCE

Width of landing
strip

1/2 Width
of landing
strip

If pilot always lands

within 1/2 the landing strip
width, we say that he has Six
Sigma capability.
9

WHAT CAN IT DO? ( SUCCESS STORIES )

Motorola:

General Electric:

5-Fold growth in Sales

Profits climbing by 20% pa
Cumulative savings of $14 billion over 11 years
$2 billion savings in just 3 years
The no.1 company in the USA

Bechtel Corporation:

$200 million savings with investment of $30 million

10

GE SIX SIGMA ECONOMICS

Source: GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress
based upon total corporation cost/benefits attributable to Six Sigma.

(in millions)
2500
2000
1500
Cost
Benefit

1000
500
0
1996

1998

2000

2002

11

OVERVIEW OF SIX SIGMA

6 SIGMA AS
A
PHILOSOPH
Y

CHANGE
THE
WORLD

TRANSFORM THE
ORGANIZATION
6 SIGMA AS
A PROCESS

6 SIGMA AS
A
STATISTICAL
TOOL

GROWTH

COSTS
OUT
PAIN, URGENCY, SURVIVAL

13

OVERVIEW OF SIX SIGMA

It is a Philosophy
Anything less than
ideal is an
opportunity for
improvement
Defects costs
money
Understanding
processes and
improving them is
the most efficient
way to achieve
lasting results

It is a Process
To achieve this level of
performance you need to:
Define, Measure, Analyse,
Improve and Control

It is Statistics
6 Sigma processes will
produce less than 3.4
defects per million
opportunities

14

1 . PHILOSOPHY

Know Whats Important to the Customer

(CTQ)

Reduce Defects (DPMO)

Centre Around Target (Mean)

Reduce Variation (Standard Deviation)

15

DATA DRIVEN DECISION

Y=

f(X)

X1 . . . Xn

Dependent
Output

Independent
Input-Process

Effect

Cause

Symptom
Monitor

Problem
16

17

Control

2. PROCESS
DMADV

DMAIC

New
Processes

Existing
Processes

Define
Measure
Analyze
Improve
Control

Define
Measure
Analyze
Design
Verify

18

COPQ (COST OF POOR QUALITY)

- Inspection
- Warranty
- Scrap
- Rework
- Rejects

Traditional Quality Costs:

- Tangible
- Easy to Measure

Hidden Costs:
- Intangible
- Difficult to Measure

- More Setups
- Expediting Costs
Lost Opportunities
- Lost Sales
- Late Delivery
- The Hidden Factory
- Lost Customer Loyalty
- Excess Inventory
- Long Cycle Times
- Costly Engineering
Changes

Average COPQ
approximately 15% of Sales

19

Cost of Quality % Sales

COPQ VS. SIGMA LEVEL

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2

Sigma Level
20

DEFECTS VS. DEFECTIVES

21

CLASSICAL YIELD,% DEFECTIVE & DPU

22

IN PROCESS YIELD

23

ROLLED THROUGHPUT YIELD

24

EXERCISE

25

DPMO: DEFECTS PER MILLION OPPORTUNITY

Opportunities for defects focus on:

noncompliance to design intent

noncompliance to customer expectations

Defects Per Million Opportunities (DPMO)Normalizes for

Complexity

DPMO Allows comparison of dissimilar products.

26

3. IT IS STATISTICS?

27

VARIATION- SOME FACTS

WHAT IS STATISTICS?
Six Sigma Belt- Common Tasks
- To predict behavior of the process
- To compare the behavior with the target
- To identify the causes and link with the process
behavior

A lot of information are needed about the

process

WHAT IS STATISTICS?

The set of information derived from the

Sample data to estimate the process
(Population) are called Statistics

POPULATION VS SAMPLE
Population

- Set of all possible outcomes of the process

Samples:
- Subsets of populations:
Data

is obtained using samples because

- we seldom know the entire population

- Population statistics are desired, but often not available
- Samples approximate the population

Descriptive statistics apply to samples

STATISTICS PRACTICALLY

IMPORTANT BASIC STATISTICS

PROCESS CAN BE DIFFER IN

STATISTICS FOR LOCATION

STATICS FOR SPREAD

STATISTICS FOR SHAPE

POPULATION VS SAMPLE STATISTICS

MEAN

MEAN : EXAMPLE

Calculate the mean of following dataset

MEDIAN

MODE

RANGE

STANDARD DEVIATION

VARIANCE

STANDARD DEVIATION :EXAMPLE

EXERCISE

HISTOGRAM

NORMAL DISTRIBUTION CURVE ( BELL CURVE)

Normal distribution is
symmetrical about its
mean
In normal distribution ,the
mean, the median and the
mode are equal.
Normal distributions are
divide up into 3 standard
deviations on each side of
the mean

CAUSES OF VARIABILITY

Common Causes:
Random variation within predictable range (usual)
No pattern
Inherent in process
Adjusting the process increases its variation

Special Causes
Non-random variation (unusual)
May exhibit a pattern
Assignable, explainable, controllable
Adjusting the process decreases its variation

51

LIMITS

Process Control limits:

Statistical
Process limits are used for individual items
Control limits are used with averages
Limits = 3
Define usual (common causes) & unusual (special causes)

Specification limits:

Engineered
Limits = target tolerance
Define acceptable & unacceptable

52

USUAL VS. UNUSUAL, ACCEPTABLE VS. DEFECTIVE

Another View

Off-Target

The statistical view of a

problem
Center
Process
LSL

USL

LSL

OnTarget

Large
Variation

Reduce
Spread

LSL

USL

LSL = Lower spec

limit

USL

USL = Upper spec

limit
53

MORE ABOUT LIMITS

Poor quality: defects are common

(Cpk<1)

Good quality: defects are rare (Cpk>1)

Cpk measures Process Capability

target

target

If process limits and control limits are at the same location, Cpk = 1.
LSL and USL = Lower and Upper Specification Limits / LPL and UPL = Lower and Upper
Process Limits

54

A SIX SIGMA PROCESS

Predictably twice as good as what the customer wants

+6

-6

LSL
1

USL

10

11

12

55

PROCESS SHIFT ALLOWED

1.5 SD

1.5 SD
LSL

USL
SD = 1

10 11

12

56

SIX SIGMA MEASUREMENT

7
Sigma 6

5
4
3

0.02
3.4

DPMO

233
6210
66810
57

SIX SIGMA MEASUREMENT

Defects

1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0

500,000
308,300
158,650
67,000
22,700
6,220
1,350
233
32
3.4

600,000
# of Defect per Million

Sigma
numbers
per million

500,000
400,000
300,000
200,000
100,000
0
1.5

2.5

3.5

4.5

5.5

# of Sigmas

58

EXAMPLE
Process A

Process B

3.7

4.7

6.5

5.3

3.2

4.7

3.2

5.4

5.7

4.7

7.4

4.4

5.7

4.7

7.7

5.8

4.2

4.2

2.9

5.7

60

COMPONENTS OF SIX SIGMA

61

COMPONENTS OF SIX SIGMA

Two components of Six Sigma

Process

People

Power

Power

62

PROCESS POWER

63

Practical
Solution

Statistical
Solution

Statistical
Problem

Practical
Problem

APPROACH

64

DMAIC - SIMPLIFIED

Define

Measure

What is wrong?

Improve

How are we doing?

Analyze

What is important?

Fix whats wrong

Control

Ensure gains are maintained to guarantee performance

65

DMAIC APPROACH
D
Define

M
Measure
A
Analyze

Identify and state the practical problem

Validate the practical problem by collecting data

Convert the practical problem to a statistical one, define

statistical goal and identify potential statistical solution

I
Improve

Confirm and test the statistical solution

C
Control

Convert the statistical solution to a practical solution

66

DEFINE
D
Define
VoC - Who wants the project and why ?

M
Measure
A
Analyze
I
Improve

The scope of project / improvement (SMART

Objective)
Key team members / resources for the
project
Critical milestones and stakeholder
review
Budget allocation

C
Control
67

MEASURE

D
Define

M
Measure
A
Analyze
I
Improve
C
Control

Ensure measurement system reliability

- Is tool used to measure the output variable
flawed ?
Prepare data collection plan
- How many data points do you need to
collect ?
- How many days do you need to collect
data for ?
- What is the sampling strategy ?
- Who will collect data and how will data
get stored ?
- What could the potential drivers of
variation be ?
Collect data

68

ANALYZE
D
Define

M
Measure

How well or poorly processes are working

compared with
- Best possible (Benchmarking)
- Competitors
Shows you maximum possible result

A
Analyze
I
Improve

Dont focus on symptoms, find the root

cause

C
Control
69

IMPROVE
D
Define

M
Measure

Present recommendations to process owner.

Pilot run
- Formulate Pilot run.

A
Analyze

- Test improved process (run pilot).

- Analyze pilot and results.

I
Improve
C
Control

Develop implementation plan.

- Prepare final presentation.
- Present final recommendation to Management
Team.

70

CONTROL
D
Define

M
Measure
A
Analyze
I
Improve
C
Control

Dont be too hasty to declare victory.

How will you maintain to gains

made?
- Change policy &
procedures
- Change drawings
- Change planning
- Revise budget
- Training

71

PEOPLE POWER

Tell me, I forget.

Show me , I remember.
Involve me, I understand.

72

6 S TRAINING

Champions

Master
Black
Belt
Blac
k
Belts

Green Belts

Team Members /
Yellow Belts

Mentor, trainer, and coach of Black Belts and others

in the organization.

Leader of teams implementing the six sigma

methodology on projects.

Delivers successful focused projects using

the six sigma methodology and tools.

Participates on and supports the project

teams, typically in the context of his or her
existing responsibilities.

73

Plans improvement projects

Charters or champions chartering process
Identifies, sponsors and directs Six Sigma projects
Holds regular project reviews in accordance with
project charters
Includes Six Sigma requirements in expense and
capital budgets

Champions

CHAMPION

74

Identifies and removes organizational and cultural

barriers to Six Sigma success.
Rewards and recognizes team and individual
accomplishments (formally and informally)
Communicates leadership vision
Monitors and reports Six Sigma progress
Validates Six Sigma project results
Nominates highly qualified Black Belt and/or Green Belt
candidates

Champions

CHAMPION

75

MASTER BLACK BELT

Enterprise Six Sigma expert

Permanent full-time change agent
Certified Black Belt with additional specialized skills or
experience especially useful in deployment of Six
Sigma across the enterprise

Master
Black Belt

76

MASTER BLACK BELT

Highly proficient in using Six Sigma

methodology (e.g., advanced statistical analysis,
project management, communications, program
administration, teaching, project coaching)
Identifies high-leverage opportunities for applying
the Six Sigma
Basic Black Belt training
Green Belt training
Coach / Mentor Black Belts
Master
Black Belt

77

BLACK BELT

Six Sigma technical expert

Temporary, full-time change agent (will return to
other duties after completing a two to three year
tour of duty as a Black Belt)

Black
Belts

78

BLACK BELT

Leads business process improvement projects where

Six Sigma approach is indicated.
Successfully completes high-impact projects that result
in tangible benefits to the enterprise
Demonstrated mastery of Black Belt body of knowledge
Demonstrated proficiency at achieving results through
the application of the Six Sigma approach
Coach / Mentor Green Belts
Recommends Green Belts for Certification
Black
Belts

79

GREEN BELT

Six Sigma Project originator

Part-time Six Sigma change agent. Continues to perform
normal duties while participating on Six Sigma project
teams
Six Sigma champion in local area
Green Belts
Recommends Six Sigma projects
Participates on Six Sigma project teams
Leads Six Sigma teams in local improvement projects

80

YELLOW BELT

Learns and applies Six Sigma tools to

projects
Actively participates in team tasks
Communicates well with other team
members
Demonstrates basic improvement tool
knowledge
Accepts and executes assignments as
determined by team
Team Members /
Yellow Belts
81

FINANCIAL ANALYST

Validates the baseline status for each

project.
Validates the sustained results / savings
after completion of the project.
Compiles overall investment vs. benefits on
Six Sigma for management reporting.
Will usually be the part of Senior Leadership
Team.

82

PROJECT SELECTION

83

SOURCES OF PROJECTS

External Sources:

Voice of Customer
What are we falling short of meeting customer needs?
What are the new needs of customers?

Voice of Market

What are market trends, and are we ready to adapt?

Voice of Competitors

What are we behind our competitors?

84

SOURCES OF PROJECTS

Internal Sources:
Voice of Process
Where are the defects, repairs, reworks?
What are the major delays?
What are the major wastes?

Voice of Employee

What concerns or ideas have employees or managers raised?

What are we behind our competitors?

85

HARVESTING THE FRUIT OF SIX SIGMA

Sweet Fruit
Design for Repeatability
Process Enhancement

Bulk of Fruit
Process
Characterization
and Optimization
-----------------------------------Low Hanging Fruit
Seven Basic Tools
-----------------------------------Ground Fruit
Logic and Intuition
86

WHAT QUALIFIES AS A SIX SIGMA PROJECT ?

Three basic qualifications:

There is a gap between current and desired / needed
performance.
The cause of problem is not clearly understood.
The solution is not pre-determined, nor is the optimal solution
apparent.

87