Session 14

Principle of Six Sigma

Lean v/s Six Sigma Lean six Sigma What is it? Difference B/W Lean & Six Sigma Sigma Levels & dpmo DMAIC & DMADV Methodology Quality Problems
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Definition
Six Sigma Is a management methodology
Customer focused Data driven decisions Breakthrough performance gains Validated bottom line results

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Customer Focused
ON TIME DELIVERY (sample)
The percentage of sales order line items that ship complete on or before the original customer promise date, for all line items shipped in the month.

Our Performance Compared to Competitors Importance to Customers Complete Quality OTD High

On-Time Delivery
100% 90% 80% 70% 60% 50% 40%

Pareto of Drivers
100%
% Impact

75% 50% 25% 0%

Orders on Credit Hold Engineering Change Orders
Current Due Date

Late Supplier Deliveries

xyz Cell Always Late

Unrealistic Promise Date

20% 10% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Target

Reason

Top 5 Action Items

Driver Action Description Status Status Description Ow ner Original Due Date

Late Supplier Deliveries

Monthly reporting to suppliers on delivery & quality metrics.

On track

Report Cards Implemented.

Adam

Low Yield on part abc

30%

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Late Supplier Deliveries

Arrange face to face meetings with top offenders. Review and approve supplier's corrective action plan. Kaizen Event to focus on improving throughput by 40% and improve labor efficiency by 35% Focus on custom products to provide realistic ATP based on inventory and leadtime of components.

On track

Meetings Complete with top 10 Suppliers.

Beth

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Late Supplier Deliveries

Caution Corrective Action Plan in Place for 2 major Suppliers On track

Carlos

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9/15

xyz Cell Always Late

Event held 5/1. 25% throughput Doreen improvement in May. Labor Efficiency Increase of 30% Earnest

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Training
Shared Goals Price Complaints

Unrealistic Promise Date

Problem Continued lack of progress. Restructured and focused team. Developing detailed plan.

6/15

8/15

Moderateto-Low

Were Better

Theyre Better

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Data Driven Decisions

Y= f (X)
To get results, should we focus our behavior on the Y or X ?

Y Dependent Output Effect Symptom Monitor Response

X1 . . . XN Independent Input-Process Cause Problem Control Factor

Why should we test or inspect Y, if we know this relationship?

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Breakthrough performance gains

(Distribution Shifted 1.5)

2 3 4 5 6
Process Capability

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

Defects per Million Opportunities

Sigma is a statistical unit of measure which reflects process capability. The sigma scale of measure is perfectly correlated to such characteristics as defects-per-unit, parts-per million defective, and the probability of a failure/error.
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Pr ic e Vo lu m e In c. w it h Co st s Le ve ra ge at er ia l M In cr ea se

Impact on Bottom Line

M an u fa ct ur in g

Vo lu m e In c. No Le ve ra g e Ta xe s La bo G en e W or ra l-5 % ki ng Pr ic e Ca pi Re du SG &A

Validated bottom line results

Assuming a 10% change in the factor

Factors
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ta l ct io n

Six Sigma Vs. Lean Manufacturing

Huge difference between "lean Tools" and Six Sigma tools. Lean = Improved process flow and the elimination of waste in a continual mode of improvement Any of the following mean Lean Manufacturing: TPS, Continuous Improvement, Kaizen, Lean Manufacturing, JIT

Six Sigma = Reduced process variation Six Sigma holds the improvement process in the hands of a select group of belted individuals
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Six Sigma
In 1980, Bill Smith, a senior engineer and scientist at Motorola, introduced the concept of Six Sigma to standardize the way defects are counted. Since then, the impact of the Six Sigma was well documented by other leading global organizations, such as General Electric, Allied Signal, and Citibank. Six Sigma was derived from the statistical term of sigma which measures deviations from perfection
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Lean Six Sigma: What is it?

Lean and Six Sigma are both process improvement methodologies Lean is about speed and efficiency Six Sigma is about precision and accuracy leading to data-driven decisions Both rooted in the 1980s (and earlier)
Lean arose as a method to optimize auto manufacturing Six Sigma evolved as a quality initiative to reduce variance in the semiconductor industry
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What is Lean and Six Sigma?

Lean, pioneered by Toyota, focuses on the efficient operation of the entire value chain. Focus areas: Remove non-value added steps to: Reduce cycle time Improve quality Align production with demand. Reduce inventory. Improve process safety and efficiency. Six Sigma, developed by Motorola, made famous by GE, it can be defined as a: Measure of process capability Set of tools Disciplined methodology Vision for quality Philosophy Strategy

Lean Sigma is a combination of two powerful and proven process improvement methods Lean and Six Sigma, that builds on existing organization capability in quality, statistics, and project 9/21/2013 Six Sigma 10 execution.

Lean Sigma Process Improvement Cycle

VOICE OF CUSTOMER Gap Identified
STRATEGIC PLAN

Better
BUSINESS UNIT SCORECARD

UCL Avg LCL

BUSINESS OBJECTIVES

Faster Financials

BUSINESS MEASURES VALUE STREAM PROCESS SCORECARD

Tools & Methodology

UCL Avg LCL

PROCESS FLOW

PROCESS MEASURES
X's Y's

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Financial applications of 6 sigma

Reduce the avg. & variation of days outstanding of A/Cs receivable. Close the books faster. Improves the accuracy & speed of Audit process. Reduce the variations in cash flows. Improves the accuracy of journal entries

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Sigma Levels
Sigma Level A value from 1 to 6 that signifies the maximum number of defects per million: 1 Sigma = 690,000 defects/million = 31% accurate 2 Sigma = 308,537 defects/million = 69.1463% accurate 3 Sigma = 66,807 defects/million = 93.3193% accurate 4 Sigma = 6,210 defects/million = 99.3790% accurate 5 Sigma = 233 defects/million = 99.9767% accurate 6 Sigma = 3.4 defects/million = 99.999997% accurate
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Combining Lean and Six Sigma Maximizes the Potential Benefits

Six Sigma Improve Quality
Overall Yield as a Function of Sigma Level & Process Steps

Sigma Level
No. of Parts or Process Steps

+/- 3
93.32% 70.8% 50.1% 3.2% 0.1% 0.0%

+/- 4
99.379% 96.9% 94.0% 73.2% 53.6% 4.4% 0.2% 0.0%

+/- 5
99.9767% 99.884% 99.767% 98.84% 97.70% 89.0% 79.2% 31.2% 9.7% 0.0%

+/- 6
99.99966% 99.998% 99.997% 99.983% 99.966% 99.8% 99.7% 98.3% 96.7% 84.4% 71.2% 18.3% 3.3%

1 5 10 50 100 500 1,000 5,000 10,000 50,000 100,000 500,000 1,000,000

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Sigma Capability
The number of Sigmas between the center of a process and the nearest specification limit 3 Process Centered We make more than 3 Process customer needs because Upper Lower some of what we make Specification Specification is waste Limit Limit Process is WIDER than the specifications
Determined by the customer Determined by the customer

WASTE
-6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6

3 Process has 66,807 dpm vs 3.4 from a 6

6 Process

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-6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6

6 Process Centered We make as much as the customer needs and have very little waste Process FITS within the specifications
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Six Sigma

The First Step is Process Knowledge

Long Term Success

Return on Investment
Process Improvement The 1st Step is Process Knowledge

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80 Percent of the Gain with 20 Percent of the Complexity

Most of the 80% improvement is possible with the basic quality and statistical tools.
Improvement 20% Tool Complexity
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Sustained Improvements without Capital Rupees

Sustainable Results Process improvements from Lean Sigma Projects are sustained. Typically, results are audited at 4 and 12 months after implementing changes. Not Capital Driven Lean Sigma projects are NOT Capital driven. Most improvements are made by changes in the SOP.
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Six Sigma Key Concepts

At its core, Six Sigma revolves around a few key concepts. Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the customer wants Process Capability: What your process can deliver Variation: What the customer sees and feels Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels Design for Six Sigma (DFSS): Designing to meet customer needs and process capability
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Example - 1
Assume that a product has 10 CTQ characteristics, and we produced 10,000 products. This means that the total number of CTQs is equal to 10,000*10. Or in other words, the total number of opportunities is 100,000 for the defects to occur. 6 sigma means 3.4 defects per million opportunities. Therefore, for achieving 6 sigma in this case, the number of permissible defects is 3.4*(100000/1 million)= 0.34 defects.

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Example - 2
The another outlook of the same problem: The number of units produced = 1000 Defective product = 1 Defect Rate = 1/1000= 0.001 Number of Opportunities per pdt= 10; equal to CTQs Defect Rate per CTQ= 0.001/10 means 0.0001 Defects per million opp = 0.0001*106= 100 This means the process does not meet the requirements of 6 sigma.

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Example To check whether the process meets the 6 sigma requirements

Units produced = 100,000 Number of CTQs= 20 Number of defects found= 2 Defect Rate = 2/(100000*20) Defects per million opportunities= (2/100000*20)*106 = 2 Since 6 sigma allows 3.4 dpmo,this process is well within the limits.
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Example 3
Area: Receptionist attending to phone calls for a company. Cust. Complaint: I have to generally wait too long to speak to a representative in this company. CTQ Name: Responsiveness of the receptionist. CTQ Measure: Time on Hold CTQ Specification: Less than 90 seconds from call connection to the automated response system.
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Example 3- contd..
Defect: Telephone calls with hold time equal or greater than 90 seconds. Unit: A telephone call Opp of defects per unit: 1 per call Number of defects: 347 telephone calls Total number of calls in the duration considered: 11,239 calls
DPMO = 347*1000000 ------------------- = 30875 11239*1 From the Table, this DPMO corresponds 3.3 sigma level.
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No of Defectives (ppm) for specified Off Centering of the process & Quality levels Sigma Quality Level
Off Centering 3.0 3.5 4.0 4.5 5.0 5.5 6.0 ---------------------------------------------------------------------------------------------------------0.0 1,350 233 32 3.4 0.29 0.019 0.001 0.25 2,380 577 88 11 1.02 0.076 0.004 0.50 6,210 1,350 233 32 3.4 0.29 0.019 0.75 12,224 2,980 577 88 11 1.02 0.076 1.00 22,750 6,210 1,350 233 32 3.4 0.29 1.25 40,059 12,224 2,980 577 88 11 1.02 1.50 66,807 22,750 6,210 1,350 233 32 3.4 1.75 105,650 40,059 12,224 2,980 577 88 11 2.00 158,655 66,807 22,750 6,210 1,350 233 32 ----------------------------------------------------------------------------------------------------------9/21/2013 Six Sigma 25

Six Sigma Overview

Strategic planning helps us focus on key projects to reach our Process Vision. Management helps Strategic Process Planning us maintain good Improvement results as we using the perform our DMAIC process Six Sigma Mission. helps us fix Process Process work problems Management Improvement and improve our Performance. To be successful as an organization, we must learn how to effectively apply ALL three (3) areas.

Six Sigma Methodology

Six Sigma has two key methodologies: DMAIC and DMADV. DMAIC is used to improve an existing business process. DMADV is used to create new product designs or process designs in such a way that it results in a more predictable, mature and defect free performance. Sometimes a DMAIC project may turn into a DFSS project because the process in question requires complete re-design to bring about the desired degree of improvement.

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6 Sigma Process Models - DMAIC

Step 1: Define It is similar to the plan phase of PDCA cycle. Definition of the project requires that information pertaining to the customer requirements is available & documented. Identification of CTQ defined by the customers.

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Example Hand Soldering Process

Obj: reduction of defects in soldering of electronics assembly. Given here is the process map involving identification of sequence of events.
Set Temp. Heat parts to be joined Look for conclave fillet

Apply Lead

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DMAIC
Step 2: Measure The team identifies the key internal processes that influence CTQs and measures the defects currently generated relative to those processes. In the same example, assume that the current defect level is 1%, and the benchmarking indicates the industry best as 0.1%. The gap is clear and the orgz should make efforts to bridge the gap.
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DMAIC
Step 3: Analyze Using 5 whys rule also Team discovers the cause for defects thr cause & effect diagram.
Environment Dust Level(N) Men Machine

Room Temp (N)

Skill of Operator (X)

Set Temp (C)

Quality of Soldering (Y)

Type of Solder C Type of Flux -C

Bit shape (X)

Duration of Soldering (X) Skill of Inspector- C

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Material

Methods
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Measurements

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Hand Soldering process

Constants C As the name suggests, these factors cannot be changed. Noise factors (N) These factors cannot be eliminated. Experimental factors (X) These factors can be modified to improve the response (Y).

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DMAIC
Step 4: Improve The team identifies max permissible ranges of the key variables and proposes a system for measuring deviations of the variables. The process performance has to be monitored and measured. Step 5: Control In this phase, tools are put in place to ensure that the key variables remain within the max permissible ranges continuously.
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Quality Function Deployment (TCS)

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Failure mode & effects analysis (TCS)

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Capability Analysis (TCS)

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Control Chart (TCS)

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Six Sigma Five Phases

Basic methodology consists of the following five phases DMADV (Define, Measure, Analyze, Design, and Verify): Define - formally define the goals of the design activity that are consistent with customer demands and enterprise strategy. Measure - identify CTQs (Critical to Quality), product capabilities, production process capability, risk assessment, etc. Analyze - develop design alternatives, create high-level design and evaluate design capability to select the best design. Design - develop detail design, optimize design, and plan for design verification. This phase may require simulations. Verify - verify design, setup pilot runs, implement production process and handover to process owners. This phase may also require simulations.
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1. DEFINE-

Common 6 Sigma Tools for DMAIC

3. ANALYZEDetailed process mapping Statistical Inference Cause - & Effect Diagrams Failure Mode & effect Analysis Root Cause Analysis 5 Whys?

Project charter Cost of Quality Analysis Pareto Analysis High Level Process mapping

2. MEASURE-

4. IMPROVE-

Design of Experiments Check Sheets Mistake Proofing Descriptive Statistics Lean Prodn Process Capability Analysis Deming Cycle Seven Management & BenchMarking Planning Tools 9/21/2013 Six Sigma

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Common 6 Sigma Tools for DMAIC

5. CONTROLStatistical Process Control Standard operating procedures

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Quality problem solving falls into one of five categories

1. Conformance problems - Users are not happy with the system outputs, such as quality or customer service levels. 2. Unstructured performance problems - the task is non-standardized and not fully specified by procedures and requirements.
3. Efficiency problems - Typical examples are cost and productivity issues. Even though the quality of the outputs may be acceptable, the systems performance does not achieve internal organizational goals.
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Quality problems
4. Product design problems - designing new products that better satisfy user needs the expectations of customers that matter most to them. 5. Process design problems - Techniques such as benchmarking and reengineering, are useful tools for process design.

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 Champions are Senior level Managers, promote & lead the deployment of 6 sigma in a significant areas of business. They own the projects & responsible for completion. They understand -Tools of 6 sigma, select projects, set objectives, allocate resources and mentor teams. Master Black Belts, identified by champions, act as in-house expert coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma. They are responsible for 6 sigma strategy, training, mentoring, deployment, and results.
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Six Sigma Key People Roles

 Black Belts Fully trained 6 sigma experts after a training of 160 hours, work on specific projects on full time basis. They perform much of the technical analysis required, have the advanced knowledge of tools & DMAIC methods. Green Belts are functional employees who are trained in introductory 6 sigma tools & work on part time basis assisting Black Belts and support them in achieving the overall results.
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Six Sigma Key People Roles

 Champion 1 week Green Belt training

Minimum Training

Master Black Belt two weeks extensive training with additional mathematical theory, quality, lean, super project, mentoring Cert: 3 years of work, additional projects, recertify every three yrs. Black Belt 4 weeks of study over 4 months Cert: 3 yrs of work, 2 documented projects, recertify every 3 yrs. Green Belt 2 weeks of classes over 2 months Cert: 3 years of work and one project
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Recognized Training
GE Motorola ASQ American Society for Quality Six Sigma Academy Institute of Industrial Engineer QAI & QCI ISSSP International Society of Six Sigma Professionals
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Key principles are necessary for effective implementation of Six Sigma

Committed leadership from top management. - Integration with existing initiatives, business strategy, and performance measurement. - Process thinking. - Disciplined customer and market intelligence gathering. - A bottom-line orientation. - Leadership in the trenches. - Continuous reinforcement and rewards.
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Group Assignment
Identify the number of opportunities of defects a computer (including the network and software) can have. For the computers in the lab of your institute, find the DPMO and the related sigma level. OR Apply the same concept w.r.t. the Library. Given Date : 4th Sept.2012 Due on : 11th Sept.2012
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Thanks & Any Questions

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