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Presenting Six Sigma


S.K.Singh

30.01.2006

Six Sigma Delta

What is Six Sigma?


A methodology
that uses
measurement and
statistical analysis
to improve
processes,
services, and
products
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What is Six Sigma?


A management system that unifies
culture, standardizes processes, and
raises performance standards

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What is Six-Sigma?
Strategic Interpretation
Align an organization keenly to market
place.
It is customer centric initiative.
Deliver real improvements to the bottom
line.
It is business initiative.
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Why does customer buy goods?


Customers needs
are met.
Receives the quality
and performance
that he is looking
for
Receives when he
wants
Pays a price he is
happy to pay
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What is Six-Sigma?
Operational Interpretation
Move Product or Service attributes within
the zone of customer specification.
Emphasis is on reduction of defects.

Dramatically shrink process variation - the


cause of defect.
Focus is on managing processes.

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What is Six-Sigma?
Measurement Interpretation
Six Sigma is a measurement of process
capability.
What can not get measured, can not get
improved.

A Six Sigma process allows only 3.4


Defects Per Million Opportunities ( DPMO ).

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What Else is Characteristics of Six Sigma?

It is team-oriented
problem solving
approach.
It is project based
with fixed deadlines.
It relies on numbers
& facts.
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Project Selection, Allocation &


Management
Long Term Strategic Intent

Strategic Plan

Business Goal 1

Project 1

Project 2

Business Goal 2

Project 3

Project 4

Personal Objectives

Personal Scorecard

Sponsoring Projects
1.
2.
3.
Leading Projects
1.
2.
Development Plan

Sponsoring Projects
1.
2.
3.
Leading Projects
1.
2.
Development Plan
1.

1.

Projects are drilled down from and contributing to ABP.


Projects fulfilment become personal objectives.
Scorecard is to monitor process of managing projects
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Few running six sigma projects in DSC


Critical-to-quality

Projects

Area

Cost reduction

Cobble reduction

Rolling Mill

Downtime reduction

Electrode regulation failure

SMS Furnace

M/c Availability
improvement

Caster strand loss reduction

SMS Caster

Material consumption
reduction

Ladle life increase

SMS refractory

Quality improvement

Yield strength improvement

Rolling mill quality

Cycle time reduction

Warehouse item traceability


improvement

Warehouse

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A Process is A Collection of Activities


That Takes one or More Kinds of Input
and Creates Output That is
of Value To

The Customer
A process is defined as a combination of factors or
activities that lead to the production of some result
(an output), whether that is a product or service.

Virtually everything we do is a process, from the


activities we do at our jobs to driving home at night.
Processes should ultimately provide value to
customers.

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Cross-Functional Process
Mapping
Function1

Step
4

Step 5

Step 3

Function 2
Step 2

Function 3
Function 4

Step 1

Step 8

Step 6

End

Step 7

Teams can use this structure for processes that move across functions

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Versions of a Process
What You
Think
it is...

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What it
Really
is..

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What it should
be...

What It
Could
be...

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Deming on Process
Eighty-Five

Percent Of The Reasons For

Failure To Meet Customer Expectations


Are Related to Deficiencies In Systems
And ProcessRather than The Employee.
The Role Of Management Is
To Change the Process Rather Than
Badgering Individuals To Do Better.

Value Analysis
Value-added work

Non value-added work

Steps that are


considered essential to
produce and deliver the
product or service to
meet the customer's
needs and requirements.
Customer is willing to

Steps that are considered


non-essential to produce and
deliver the product or service
to meet the customers needs
and requirements. Customer
is not willing to pay for step

pay for step.


Steps that are not
essential, but that allow
the value-adding tasks to
be done better/faster
Value-enabling work

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Types of Non Value-added Work


Delay

Set-up

Control/Inspection

Internal
Failure

Moving

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Clues for Non-value Added work


- Rework
Reevaluate
Remake

Recall
Redo

Recheck
Revise

Reject
Return

Reissue

Re-measure

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Redesign

Repeat

Rework

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Retest

Reship

Retype

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VA / NVA Ratio
5-10
%
NVA

VA

10-20 %

90 - 80 %

VA

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AVG . Industries

95 - 90 %

BEST Industries

NVA

50 %

50 %

VA

NVA

WORLD CLASS Industries

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Seven Deadly Waste

1.
2.
3.
4.
5.
6.
7.

Waste of Space
Waste of waiting time
Transportation waste
Re-processing waste
Inventory waste
Waste of motion
Waste from product defect

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Improvement as we climb the Six Sigma Ladder

Defects per Million


Opportunities

100K
10K

(66810 ppm)

10x Improvement

(6210 ppm)

1K
30x Improvement

100
10
1

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(233 ppm)

70x Improvement

20

(3.4 ppm)

(with +1.5 sigma shift)


Sigma

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What Six Sigma Brings to Business?

Improvement
over previous
sigma level

Cost of
Poor
Quality
( % of
Sales)

S.No.

Level of Process
Control

Defect Per
Million

+/- 1 Sigma

6,90,000

+/- 2 Sigma

3,08,537

2.2 Times

30 - 40 %

+/- 3 Sigma

66,807

4.6 Times

20 - 30 %

+/- 4 Sigma

6,210

10.7 Times

15 - 20 %

5
6

> 40 %

+/- 5 Sigma
233
26.6 Times
Source:
Business Today, Sept. 22- Oct 6, 1999
+/- 6 Sigma
3.4
68.5 Times

10 - 15 %
< 1%

Six Sigma Scale of Defects & Impact on Cost of Quality

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What can Six Sigma do?


Improve performance: reduce
defects, systematize and
stabilize processes, improve
customer satisfaction
Reduce costs: improve
efficiency, eliminate waste,
reduce costs of poor quality

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What is ?
The Greek letter refers to standard
deviation, a measure of the variation of data
about its average.
When we measure a processs sigma value,
we measure the number of units of standard
deviations between the process center and
the closest specification limit.

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Every Human Activity Has Variability...


Customer
Specification

X
X
XXX
X X X XX
XXXXXXX X
XXXXXXXXXX
X X XXXXXXXXXX XXX

defects

Target

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Understanding Variability
& Customer Specification
Is The Essence of Six Sigma
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Reducing Variability Is The Key To Six Sigma


Before

A 3 process because 3 standard deviations


fit between target and spec

Customer
Specification

Target

6.6% Defects

2
3

Customer
Specification

Target

After

6 !

1
2
3
4

No Defects!
5
6

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How does Six Sigma work?


The infrastructure:
Sponsors secure
organizational
support for
improvement projects
run by Black Belts
and Green Belts

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Six Sigma infrastructure

Black Belts

Champions

All staff

Apex
Committee
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Project
Team
Members
Green
Belts

Div. Apex
Committee
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Six sigma organisation structure DSC

Apex Committee
Six sigma Dept.

Div. Apex
committee:
RM

Functional
GB: RM

GBs: RM

Div. Apex
committee:
Pellet Plant

Functional GB
: Pellet Plant

GBs : Pellet
Plant

Div. Apex
committee: SMS
& Foundry

Functional GB :
SMS & Foundry

Div. Apex
committee: DRI &
Lime plant
Functional GB
: DRI& Lime
plant

Reporting to
MD
Div. Apex
committee: C M &
Heavy Vehicle

Functional GB :
Central
maintenance

Div. Apex
committee:
R&QA &
Admin Block
Functional
GB : R&QA &
Admin Block

GBs : DRI &


Lime plant

GBs : SMS &


Foundry

GBs : Central
maintenance

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GBs : R&QA
& Admin
Block

How does Six Sigma work?

The methodology: teams apply the


DMAIC (define, measure, analyze,
improve, control) methodology to root
out and eliminate the causes of defects

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DMAIC
Methodology

Define
Measure
Analyze
Modify
design?

Redesign

yes

no

Improve

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Control
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Define
Identify processes to be
improved
Define defects, customer
requirements, and
opportunities for
improvement
Establish project objectives, parameters, and
metrics
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Define phase tools


High-level, as-is business
process map
Voice of the Customer
(VOC): determine what is
critical to customer
satisfaction
Cost of quality/cost of poor
quality (COQ, COPQ)
Team charter
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Defining a Problem Statement


Poor Example:
Our customers are angry with us and thus delay paying their bills.

Good Example:
In the last 3 months, 12% of our customers are late, by over 45 days in
paying their bills. This represents 20% of our outstanding receivables &

negatively affects our operating cash flow.

When
Consequence
What

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Magnitude

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Project Agreement Form

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Measure
Collect data on performance
Map the process
Determine Critical to Quality (CTQ)
characteristics
Validate measurement system and
establish a baseline
Estimate process capability
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Measure phase tools


Detailed process map
Control charts
Gage reproducibility
and repeatability
(Gage R&R)
Process capability

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Analyze
Identify possible sources
of variation; narrow the
search for key variables
Perform hypothesis
testing and
correlation/regression
Outline areas for improvement; recommend
redesign when necessary
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Analyze phase tools


20
15
10
5
0

10

Correlation = 1

Regression Plot
Y = 1.02031 + 0.872922X
R-Sq = 92.0 %
9.4
9.3
9.2

Confidence intervals
Multi-vari analysis
Analysis of variance
(ANOVA)
Correlation/regression
Hypothesis testing

9.1

Ho = Null
Ha = Alternate

9.0
8.9
8.8
8.7
8.6
8.7 8.8 8.9 9.0 9.1 9.2 9.3 9.4 9.5 9.6

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Improve
Determine effect of key
process variables on
undesirable variation
Develop and test
potential solutions to
reduce variation
Implement validated
solutions
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Improve phase tools

Design of experiments (DOE)


Full-factorialmeasures and analyzes the
responses of all possible combinations of
factors and factor levels
Fractional-factorialmeasures and
analyzes responses for a balanced portion
of the full-factorial array

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Control
Monitor the improved
process
Implement controls to hold
the gains
Establish and document new
standard operating
procedures
Transfer responsibility to
process owners
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Control phase tools

Statistical process
control (SPC)
Process capability
analysis

Control plans

Upper Control Limit


4

UCL=3.794

Center Line

U =1.930

1
LCL=0.06613

0
0

10

20

Lower Control Limit

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Mistake Proofing
To

err is human. We must never stop trying to find


ways of not making mistakes.
Mistake proofing is defined as a system for
organizing work that:
Excludes

any risk of error even by a

beginner
Allows everyone to operate without
mistakes
Prevents errors that are about to
occur
Mistake

proofing is also known as poka-yoka or


fool proofing.
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Contact :4034 (SIX SIGMA OFF.) Admin 1.43

Any Questions ???

Thank You

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