QUALITY TOOLS & TECHNIQUESII

FUNDAMENTALS OF SIX SIGMA

By: FAHAD JAVAID

FUNDAMENTALS OF

SIX SIGMA

1. Definition 2. Different opinions on the definition of six sigma 3. Six Sigma

i. As ii. As iii. As iv. As a a a a Measure Benchmark Metric Methodology

4. Six Sigma Tools

SIX SIGMA DEFINITIONS

A Management driven, scientific methodology for product and process improvement which creates breakthroughs in financial performance and Customer satisfaction. Source: Motorola A methodology that provides businesses with the tools to improve the capability of their business processes. This increase in performance and decrease in process variation lead to defect reduction and improvement in profits, employee morale and quality of product. Source: ASQ

SIX SIGMA DEFINED

In In a narrow sense A metric based on Statistical Measure called Standard Deviation a broader, business sense WORLD CLASS QUALITY providing a BETTER product or service, FASTER, and at a LOWER COST than our competitors. VARIATION the enemy of the customer satisfaction

WHAT IS SIX SIGMA?

DIFFERENT OPINIONS ON THE DEFINITION OF SIX SIGMA:
Six Sigma is a PHILOSOPHY: This perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the outputs: This is generally expressed as y = f(x). Six Sigma is a SET OF TOOLS: The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement. A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis and flowcharting. Six Sigma is a METHODOLOGY: This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC (define, measure, analyze, improve and control). 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 the only Six Sigma methodology in use, it is certainly the most widely adopted and recognized. Six Sigma is a METRIC: it uses the measure of sigma, DPMO (Defect Per Million Opportunities), RTY (Rolled Throughput Yield) etc.

WHAT IS A SIX SIGMA As a Measure?

1.5 Sigma Shift Theory

WHAT IS A SIX SIGMA As a Benchmark?

Yield
99.997% 99.976% 99.4% 93% 65% 50%

DPMO
3.4 233 6,210 66, 807 308, 537 500, 000

COPQ
< 10% 10 15 % 15 20 % 20 30 % 30 40 % > 40 %

SIGMA
6 5 4 3 2 1

Source: Journal for Quality and Participation, Strategy and Planning Analysis

Each of these metrics serves a different purpose and may be used at different levels in the organization to express the performance of a process in meeting the organizations (or customers) requirements. We will discuss each in detail as we do through the course. 1. Defects 2. Defects Per Unit (DPU) 3. Parts Per Million (PPM) 4. Defects Per Million Opportunities (DPMO) 5. Yield 6. First Time Yield 7. Rolled Throughput Yield (RTY) 8. Sigma(s)

WHAT IS A SIX SIGMA As a Metric?

In any process improvement endeavor, the ultimate objective is to make the process: 1. Better: DPU, DPMO, RTY (there are others, but they derive from these basic three) 2. Faster: Cycle Time 3. Cheaper: COPQ

SIX SIGMA: Metric (Cont)

If you make the process better by eliminating defects you will make it faster. If you choose to make the process faster, you will have to eliminate defects to be as fast as you can be. If you make the process better or faster, you will necessarily make it cheaper.

The metrics for all six sigma projects fall into one of these three categories

Six Sigma methods quantify individual defects and not just defectives 1. Defects account for all errors on a unit
i. ii.

SIX SIGMA: Metric (Cont)

A unit may have multiple defects An incorrect invoice may have the wrong amount due and wrong due date Doesnt matter how many defects they are The invoice is wrong, causes are unknown. is the measure of volume of output from your area. is observable and countable. It has a discrete start and stop point. It is an individual measurement and not an average of measurements.

2.Defectives simply classifies the unit bad

i. ii. i. ii. iii.

3.A Unit:

SIX SIGMA: Metrics (Cont)

DPU
Say: 10 Defects, 100 Pairs DPU = 10/100 = 0.1 (10%)

(Defects / Unit) (# of Defects / # of Units)

(Defects / Opportunity)
(# of Defects) / (# of Units X # of Defect Opportunities / Unit)

DPO

Say: 10 Defects, 100 Pairs, 2 Opportunities / Carton DPO = 10/(100 X 2) = 0.05 or 5% for each type

SIX SIGMA: Metrics (Cont)

DPMO
Say: 10 Defects, 100 Pairs 2 types of defects DPMO = 0.05 X 106 = 50,000
Yield =1DPO =10.05 = 95 %

(Defects / M. Opportunities) DPO X 106

Consult ZTable or Excel

SIGMA

Sigma Level

From M.S. Excel: =Normsinv(%Yield)+1.5

50,000 DPMO = 3.145

SIGMA VALUE
DPU is 0.008 DPMO=0.008 Y= RTY= e-DPU=0.992 Probablity of defect is P(d)=1-Y = 10.992=0.008 then use Z value table is 2.41 and add 1.5 shift, then the sigma level is 2.41+1.5=3.9 sigma level

EXAMPLE: Calculate Sigma Value

Calculate the Sigma Value and DPMO of a telecom network had 500 minutes of downtime in 2005. Product: Network (Connectivity) CTQ: Up time / Down time CTQ Measure: Minutes CTQ Specs: no downtime Defect measure: One minute of Network down Opportunity/Unit: 1 Total Defects in 2005: 500 minutes Total Time (Minutes): 365days X 24hours X 60min. = 525,600 DPU = 500/525,600 = 0.000951 DPO = 500 / (525600 X 1) = 0.000951 DPMO= 0.000951 X 106 = 951 Yield = 1 DPO = 1 0.000951 = 0.999049 SIGMA VALUE = Normsinv(%Yield)+1.5 = 4.6

EXAMPLE: Calculate Sigma Value

A manufacturer of computer hard drives wants to measure their Six Sigma level. Over a given period of time, the manufacturer creates 83,934 hard drives. The manufacturer performs 8 individual checks to test quality of the drives. During testing 3,432 are rejected. # of Defects = 3432 # of Units = 83934 # of Defect Opportunities per Unit = 8 DPU = 3432/83934 = 0.041 DPO = 3432/(83934 X 8) = 0.0051 DPMO= DPO X 106 = 5111 Yield = 1 DPO = 1 0.0051 = 0.9949 SIGMA VALUE = Normsinv(%Yield)+1.5 = 4.07

EXAMPLE: Calculate Sigma Value

A project is focused on a billing process. The team wants to have correct bills sent to the customer. They have defined one opportunity for this process - either the bill is correct or not. All of the bills produced are the same in terms of complexity. The team took a sample of 250 bills and found 60 defects. # of Defects = 60 # of Units = 250 # of Defect Opportunities per Unit = 1 DPU = 6/250 = 0.24 DPO = 6/(250 X 1) = 0.24 DPMO= DPO X 106 = 240,000 Yield = 1 DPO = 1 0.24 = 0.76 SIGMA VALUE = Normsinv(%Yield)+1.5 = 2.21

EXAMPLE: Calculate Sigma Value

If you have a total of 500 delivery orders and you find out that 41 of those were delivered late, and 17 were incorrect orders. # of Defects = 41+17 = 58 # of Units = 500 # of Defect Opportunities per Unit = 2 (delivery time and correct order)

DPU = 58/500 = 0.116 DPO = 58/(500 X 2) = 0.058 DPMO= DPO X 106 = 58,000 Yield = 1 DPO = 1 0.058 = 0.942 SIGMA VALUE = Normsinv(%Yield)+1.5 = 3.07

EXAMPLE: Calculate Sigma Value

A telecom service provider complies the defects of one year from the inspection of 100 sites. The severity of each defect is classified in the following: i. Critical ii. Major iii. Minor iv. Trivial The complete checklist comprises of 50 types of defects. The data of 2005 of 100 sites reveals the following figures: Total # of Critical Defects: 5 Total # of Major Defects: 20 Total # of Minor Defects: 120 Total # of Trivial Defects: 155 Calculate the Sigma Value and the DPMO for the year 2005. # of Defects = 5 + 20 + 120 + 155 = 300 # of Units (Opportunities) = 100 # of Defect Opportunities per Unit = 50

DPU = 300/100 = 3.0 DPO = 300/(100 X 50) = 0.0600 DPMO= DPO X 106 = 60,000 Yield = 1 DPO = 1 0.0600 = 0.9400 SIGMA VALUE = Normsinv(%Yield)+1.5 = 3.05

SIGMA TABLE
SIGMA LEVEL SHORT TERM LONG TERM (PROCESS NOT SHIFTED) (PROCESS SHIFTED 1.5 SIGMA)
Yield (OK) % Reject PPM Yield (OK) % Reject PPM

1 2 3 4 5 6

68.27 95.45 99.73 99.9937 99.999943 99.9999998

317,300 45,500 2,700 63 0.53 0.002

30.23 69.13 93.32 99.3790 99.97670 99.999660

697,700 308,700 66,810 6,210 233 3.4

SIX SIGMA: Metrics (Cont)

Final Yield (FY) Final Yield represents the acceptable pieces at the end of the process divided by the pieces started. The FY excludes scrap.

FY = (Total Unit Passed) / (Total Unit Tested)

Calculation from above example: The unit of measure must be the same for the numerator and denominator throughout the calculation. Process 1 Yield: 46 passed / 50 entered = 92.0% Process 2 Yield (itself): 46 passed / 46 passed = 100% Yield AFTER Process 2: 46 passed / 50 entered: 92.0% Process 3 Yield (itself): 37 passed / 46 entered = 80.4% Yield AFTER Process 3 (also the same as the final yield of entire process): 37 passed / 50 entered = Final Yield = 74%

Process 3 has the lowest yield and probably the most cost associated since all the material, labor, and overhead costs are already in the pieces from the previous processes.

SIX SIGMA: Metrics (Cont)

Throughput Yield (TPY): Also called: FIRST PASS YIELD or FIRST TIME YIELD (FTY) Throughput Yield (TPY) is the number of acceptable pieces at the end of a process divided by the number of starting pieces excluding scrap and rework. TPY is the traditional quality metric for yield Unfortunately, it does not account for any necessary rework

SIX SIGMA: Metrics (Cont)

Throughput Yield (TPY): Also called FIRST PASS YIELD (FIRST TIME YIELD)

Calculation (assuming all rework only takes one time to correct): Process 1 TPY: 40 of the 50 pieces that entered Process 1 went through Process 1 correctly the first time. Therefore Process 1 TPY = 40 / 50 = 80.0% Process 2 TPY: 34 of the 46 pieces that entered into Process 2 went through Process 2 correctly the first time through. Therefore Process 2 TPY = 34 / 46 = 73.9% Process 3 TPY: 37 of the 46 pieces that entered Process 3 went through Process 3 correctly the first time. Therefore Process 3 TPY = 37/46 = 80.4% There is another method to calculate TPY for a single process. If the DPU or defects and units are known then:

SIX SIGMA: Metrics (Cont)

Rolled Throughput Yield (RTY):

Rolled Throughput Yield is the probability of the entire process producing zero defects. RTY is more important as a metric to use where the process has excessive rework.

Calculation from above example: RTY = Process 1 TPY * Process 2 TPY * Process 3 TPY RTY = 0.800 * 0.739 * 0.804 RTY = 0.475 = 47.5% There is a 47.5% of the entire process producing zero defects. Another method to estimate RTY if the defects per unit or defects and units are known:

SIX SIGMA: Metrics (Cont)

Rolled Throughput Yield (RTY)
"Let's assume that we have two lines making the same product. If we only look at unit yields, they look much different. One process has a 50-percent yield, the other a 90-percent yield. But assume that each unit had 10 critical-to-quality characteristics. If we look at characteristics, we see that both have produced five defects in 100 defect opportunities. In terms of the ability to produce defect-free quality characteristics, they're actually the same." "So if it costs $100 to fix a defect, the two processes have about the same rework cost, even though the unit yields would make the first process look a lot better If you want an accurate picture of process performance, use rolled throughput yields."

SIX SIGMA & LEAN SIX SIGMA

SIX SIGMA METHODOLOGIES

DESIGN FOR SIX SIGMA

DMAIC: Define
Define the project goals, business justification, & and project outcome 1. 2. 3. 4. 5. 6. 7. Customers and Critical to Quality (CTQs) Problem Statement, Goals and Benefits Identify Champion, Process Owner, and Team Resources Evaluate Key Organizational Support Develop Project Plan and Milestones Develop Process Map

ACTIVITIES

D1: IPO Diagram D2: SIPOC Diagram D3: Flow Diagram D4: CTQ Tree D5: Project Charter

TOOLS

DMAIC: Measure
Measure the baseline determine current performance and long term process capability 1. 2. 3. 4. 5. 6. 7. Define Defect, Opportunity, Unit and Metrics Detailed Process Map of Appropriate Areas Develop Data Collection Plan Validate the Measurement System Analysis (MSA) Collect the data and extensive study Begin Developing Y = f(x) Relationship Determine Process Capability and Sigma Baseline
M1: Check Sheets M2: Histograms M3: Run Charts M4: Scatter Diagrams M5: Cause and Effect Diagrams M6: Pareto Charts M7: Control Charts M8: Flow Process Charts M9: Process Capability Measurement

TOOLS

ACTIVITIES

DMAIC: Analyze
Extensive exercise to carry out root cause analysis

ACTIVITIES TOOLS

1. Define Performance Objectives 2. Identify Value / NonValue Added Process Steps 3. Identify Source of Variation 4. Determine Root Cause(s) 5. Determine Vital Few Xs, Y = f(x) Relationship
A1: Process Mapping A2: Regression Analysis A3: RU/CS Analysis A4: SWOT Analysis A5: PESTLE Analysis A6: The Five Whys9 involving six questions: Why, What, Where, When Who and How?)

DMAIC: Improve
Improve the process with experimentations by eliminating defects and reengineering.

ACTIVITIES TOOLS

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

Perform Design of Experiments Develop Potential Solutions Define Operating Tolerances of Potential System Assess Failure Modes of Potential Solutions Validate Potential Improvement by Pilot Studies Correct/Re-Evaluate Potential Solution Mistake Proofing (Poke Yoke) Design of Experiments (DOE) House of Quality (Quality Function Deployment) Failure Mode and Effect Analysis Simulations

DMAIC: Control
Maintain the Process Capability.
1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 7. Define and Validate Monitoring and Control System Develop Standards and Procedures Implement Statistical Process Control Determine Process Capability and Cost of Quality Develop Transfer Plan, Handoff to Process Owner Verify Benefits, Cost Saving / Avoidance, Profit Growth Close Project, Finalize Documentation, Reward / Award Process Sigma Calculation Control Charts Cost of Quality Calculations Control Plan ISO 9001 Activity Network Diagram PDCA Cycle

TOOLS

ACTIVITIES

DMAIC Roadmap
Champion / Process Owner Define

Identify Problem Area Determine Appropriate Project Focus Estimate COPQ

Establish Team
Measure

Assess Stability, Capability, & Measurement Systems

Identify & Prioritize all Xs

Analyze Improve Control

Prove / Disprove Impact Xs Have on Problem

Identify, Prioritize, Select solutions control or eliminate Xs causing problems
Implement Control plan to ensure problem doesnt return Implement Solutions to control or Eliminate Xs causing problems

Verify Financial Impact

SIX SIGMA PROGRAMS

SS
SIX SIGMA LEAN SIX SIGMA
Elimination of Defects from Existing Products and Processes Elimination of Wastes from Existing Products and Processes

LSS

DFSS

DESIGN FOR SIX SIGMA

Elimination of Defects from Existing Products and Processes

SIX SIGMA FRAMEWORKS

Program Focus / Theme SIX SIGMA
VARIATION
Defects Cost of Poor Quality

Lean Six Sigma

WASTE / SPEED
Cycle Time, Delivery Cost of Operation

DFSS
RELIABILITY & ROBUSTNESS Design Features

Methodology

DMAIC
SIPOC, CTQ, SPC, FMEA, DOE, QFD, CoQ, ANOVA, Hypothesis, Regression, MSA (R & R)

DMAIC
5S, Value Mapping, Time Study, TPM, Cellular Prod., Supply Chain, Takt Time, Poke Yoke

DMADV
VOC, QFD, FMEA, CTQ, Gage R & R, DOE, Reliability Analysis, SPC, Systems Engineering

Tools

SIX SIGMA STRUCTURE

HODS / Owners

Quality Council / Steering Committee

SS Project Managers

Champions

Sponsors Process Owner

Master Black Belt

Black Belt
Team Leaders Team Members

Coach Trainers

Black Belt

Green Belt

Green Belt

Green Belt

Green Belt

EXECUTIVE LEADERSHIP / LEADERSHIP TEAM: The leadership team is the executive responsible for that business unit and appropriate members of his/her staff and direct reports. This person has overall responsibility for approving the improvement projects undertaken by the SixSigma teams.

SIX SIGMA ROLES & RESPONSIBILITIES

CHAMPION / PROCESS OWNER: Each project has a CHAMPION, a business leader whose job is to facilitate: project identification and selection, identify black belts and other team members who are necessary for successful project completion, remove barriers to project completion, make sure that the resources required for project completion are available, and Conduct regular meetings with the team or the Black Belt to ensure that progress is being made and the project is on schedule. The CHAMPION role is not full time, and CHAMPIONS often have several projects under their supervision.

MASTER BLACK BELT (MBB): A Master Black Belt (MBB) is a technical leader, and may work with the Champion and the leadership team in: project identification and selection, project reviews, consulting with Black Belts in technical issues, and training of Green Belts & Black Belts. Typically, the Black Belt and Master Black Belt roles are full time. BLACK BELT: Black Belts are application experts and work projects within the business. They should be well versed with the six sigma Technologies and have the ability to drive results. 1. Project team leader 2. Facilitates DMAIC teams in applying Six Sigma methods to solve problems. 3. Contributes to the accomplishment of organizational goals 4. Provides technical support to improvement efforts

SIX SIGMA ROLES & RESPONSIBILITIES (Cont)

SIX SIGMA ROLES & RESPONSIBILITIES (Cont)

GREEN BELT: Green Belts are practitioners of six sigma Methodology and typically work within their functional areas or support larger Black Belt projects. 1. Well versed in the definition & measurement of critical processes 2. Involved in identifying improvement opportunities 3. Involved in continuous improvement efforts (Applying basic tools & PDCA) 4. Team members on DMAIC teams (Supporting projects with process knowledge and data collection)

SIX SIGMA TOOLS

1. Quality Tools 2. Statistical Tools 3. Management Tools

Every tool is a JUNK unless used appropriately

SIX SIGMA TOOLS

Q
S

QFD FMEA SPC QC TOOLS New Management Tools

Control Charts Capability Analysis Probability Distribution Sampling Confidence Interval Regression Analysis Project Management Organizational Behavior Human Resource Management Knowledge Management

PROJECT SELECTION: CORE COMPONENTS Project Charter Definitions:

1. Problem Statement: Articulates the pain of the defect or error in the process. 2. Objective Statement: State how much of an improvement is desired from the project. 3. Scope: Articulates the boundaries of the project. 4. Primary Metric: The actual measure of the defect or error in the process. 5. Secondary Metric(s): Measures of potential consequences (+ / ) as a result of changes in the process.

PROJECT SELECTION: CORE COMPONENTS Project Charter:

Project Title Business Case Problem Statement Goal Metrics (CTQs) Project Title Why should you do this project? What are the benefits of doing this project? What is the problem, issue and/or concern? What are your improvement objectives and targets? PRIMARY Metric(s): Key measures to be used for the objectives SECONDARY Metric(s): Those measures which indicates impacts on secondary concerns and which indicates that problem is not shifted to other key areas. What authority do you have? Which processes/products you are addressing? What is not within this project? Who are the team leader, sponsor, and members? What are their roles and responsibilities in this project? How and when are you going to get this project done (DMAIC stages) What are your interfaces with each other? What are your meeting & reporting times?

Project Scope

Project Team Project Plan Communication Plan

PROJECT SELECTION: CORE COMPONENTS

Project Charter EXAMPLE:

Business Case: Infrastructure department of Mobilink has constructed 900 cell sites last year out of which 150 sites were not as per standards, either these were not accepted by Operation department due to quality issues or came in maintenance work after some time. Mobilink has spent $ 0.5 million on rework and maintenance at these sites last year. This project envisages the improvement in cell sites construction by 90% to save $ 0.45 million or rework cost as hard savings. Problem Overall expenditures have been raised due to rework, moreover during rework/maintenance Statement operation of effected sites stops. It is affecting the quality of service and causing to loose the : strategic advantage over other telecom companies. Goals: To eliminate the number of defects by 90% in site acceptance To improve the quality of cell site construction by applying quality checks at different phases. To reduce/eliminate the cost of maintenance from $ 0.5 million to $ 0.05 million Primary Metric(s): Number of sites rejected because of defects blocking installation of radio equipment, Number of sites locked due to civil work (Production) issues Secondary Metric(s): Selection of vendor, proper testing of material, targeted timeframe, New Quality checks The project targets reduction of defects in new sites construction and improve quality to avoid maintenance.

Metric:

Scope:

QUESTIONS