Six Sigma Overview

Program Outline
• Overview of Six Sigma
• Key Concepts of Six Sigma
• Applications of Six Sigma in Industries
• Six Sigma DMAIC Methodology
• Six Sigma Toolkit
• Organizing for Six Sigma
• Project Selection and Management
• Critical Success Factors
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What is Six Sigma?
• It is a methodology for continuous improvement
• It is a methodology for creating products/
processes that perform at high standards
• It is a set of statistical and other quality tools
arranged in unique way
• It is a way of knowing where you are and where
you could be!
• It is a Quality philosophy and a management
technique

Origin of Six Sigma
• Six Sigma was developed by Motorola in 1987
Raised quality standards
• GE adopted Six Sigma in 1995
• Other companies have adopted Six Sigma since
its inception
AlliedSignal, Siebel, Bombardier, Lockheed Martin,
Kodak, Sony, Nokia, Siemens, BBA, Seagate,
Compaq, Toshiba, AmEx...This document is a partial preview. Full document download can be found on Flevy:

Quality engineering
and administration
Inspection/test (materials,
equipment, labor)
Expediting
Scrap
Rework
Rejects Warranty
claims
Maintenance and service
Cost to customer
Excess inventory
Additional
labor hours
Longer cycle times
Quality audits
Vendor control
Lost customer loyalty
Improvement program costs
Process control
Opportunity cost if sales
greater than plant
capacity
We See Only the Tip of the Iceberg
Poor quality costs a typical company
15-20% of sales annually
Less
Visible
Visible

What does Six Sigma in manufacturing and
process industries look like?
Automotive
•Production
•Inventory
management
Aerospace
•Engine overhaul
•Spare parts
Application Common Issues Typical Solutions
•Equipment downtime
•Rework and re-
inspection
•Inventory costs
•Turnaround time
•Obsolescence costs
•Repairs and
maintenance
•Elimination of defects
•Inventory optimization
•Process streamlining
•Standardized operating
procedures
•Spare parts
management
Process
• Materials
management
• Asset management
•Material wastages
•Equipment availability
•Elimination of defects
•Reduction of unplanned
downtime
Source: Operational Excellence Consulting Research

Lean & Six Sigma
• Lean improves the “flow”
by eliminating waste
• Six Sigma improves the
process by reducing
variation
Combining Lean
with Six Sigma
results in smooth
and steady flow

Breakthrough Thinking Needed
“The problems that exist
in the world cannot be
solved by the level of
thinking that created
them.”
- Albert Einstein

Key Concepts of Six Sigma
• 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: Designing to meet customer
needs and process capability

Variability affects your costs and your
customers’ experience
Understanding the nature of process variation is
critical since customers feel the effects of process
variation as well as the process average
Unhappy
Customer
Excess
Cost
USLLSL

Focus of Six Sigma
Focus on the x-y relationship
• y
• Dependent
• Output
• Effect
• Symptom
• Monitor
• x1 . . . xN
• Independent
• Input - Process
• Cause
• Problem
• Control
Process/Product Output (y) is a Function of Process Input Variables (x’s)
Capability =
y =
f (Variation)
f(x)

Is 99% (3.8σ) good enough? 99.99967% Good – At 6σ
20,000 lost mails per hour 7 lost mails per hour
Unsafe drinking water almost 15
minutes each day
One minute of unsafe drinking
water every seven months
5,000 incorrect surgical
operations per week
1.7 incorrect surgical operations
per week
2 short or long landings at most
major airports daily
One short or long landing at major
airports every five years
200,000 wrong drug prescriptions
each year
68 wrong drug prescriptions each
year
Source: Example quoted from GE Book of Knowledge - copyright GE
Real World: What is Sigma Performance?

CTQ is any
product or service characteristic
that satisfies
a key customer requirement
or
process requirement
Critical To Quality (CTQ)

CTQ Tree – Example
Delivery of Pizza
1st Level (Need) 3rd Level (CTQs)2nd Level (Drivers)
Types of Pizza/
Toppings
Quality
Speed
How Warm
Looks
Taste
Delivery Speed
Variety

Six Sigma Improvement Frameworks
• DMAIC
Define - Measure - Analyze - Improve - Control
Use it to improve an existing process
• DMADV (or DFSS*)
Define - Measure - Analyze - Design - Verify
Use it to design new products/services or redesign existing
products/services
Use it to design a new process
*DFSS = Design for Six Sigma

DMAIC Improvement Methodology
Determine
customer
need to be
satisfied
Map the
process,
measure
current
performance
Ensure that
customer
need is met
and
improvement
is sustained
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Customer
Scope
Team Measurement
system
Process Map
Baseline
Potential
Causes
Proposed
Solutions
Pilot
Validation
Transfer &
Closure
Reduce defects and variability in the
process output by objectively determining
the root causes of process issues
1
4
5
3
2
START
with the
customer
END with the
customer
Identify
variation
drivers,
propose
solutions
Validate
solutions,
optimize the
process

Measure Phase
• Explore the process and learn about the Y (project output or
metric). We will focus on the X’s in Analyze.
• How does the process currently behave and what is the
current performance of the process with respect to the
customer?
• When and where does the data come from?
• Make sure that you have verified your measurement system.
Don’t assume that your measurements are accurate. If you
measure your data, make improvements and then verify the
savings, how do you know you made a difference if the
measurement system doesn’t accurately tell what is
happening?

Analyze Phase Deliverables
At the end of the Analyze Phase you should have
completed the following deliverables:
• Cause & effect analysis
Fishbone diagram, C&E matrix
• FMEA (Failure Modes and Effects Analysis)
• Graphical analysis
• Statistical analysis
Hypothesis testing
Correlation & regression analysis

Control Phase
• The Control phase ensures that the gain achieved in the Improve
phase are sustained.
• Has the project goal been achieved?
• Demonstrate how your solution achieved the desired results and
explain any further action to be taken, including the responsible
team members and timeline.
• Discuss financial validation and provide evidence of project approval
by the Champion or equivalent.
• Summarize project conclusions, lessons learned and potential future
areas of improvement; don’t forget to give credit to team members
and key project contributors.

Tollgate Review
• When is a Tollgate Review Carried Out?
It is carried out after each stage of the DMAIC
sequence (Define, Measure, Analyze, Improve and
Control).
The project cannot continue on to the next stage until
it has passed the tollgate review.

DMAIC Improvement Methodology
Measure
Performance
Define
Opportunity
Analyze
Opportunity
Improve
Performance
Control
Performance
Identify the critical
business issues and
concerns
Understand the
current process and
it’s customers
Characterize the Y
and potential Xs
Collect data for
process elements
Verify/quantify
important Xs
Identify factors (Xs)
that have an
influence on the
business issue.
Implement solutions
to improve Y
Adjusted the factors
that influence the
business concerns
Manage important Xs
and monitor the Y
over time
Mange routine or
day-to-day
operations for these
critical factors
DMAIC allows for the utilization of multiple tools and techniques when improving
processes; including statistics and Lean techniques.
The Control Phase allows teams to develop a process to ensure improvement results
will be sustained over the long-term
Each step in the DMAIC process is required and results in deliverables that
ensures the team is focused on key process performance measures

© Operational Excellence Consulting. All rights reserved.
Organizing for Six Sigma

Role of Leadership Team
• Create a vision for the Six Sigma initiative
• Define the strategic goals and measures of the
organization
• Establish the business targets
• Create an environment within the organization that will
promote the use of the Six Sigma methodology and tools
• Establish the rewards and recognition system
• Make resources available – team members and budgetThis document is a partial preview. Full document download can be found on Flevy:

Role of Process Owner
• Takes ownership of the project when it is complete
• Is responsible for maintaining the project gains
• Removes barrier for Black Belts
• Support the project team, e.g. make resources available
• Maintain the Control Plans and ensure that they are
active and compliant
• Participate in tollgate reviews

Role of Green Belts
• Is trained in the subset of the Six Sigma
methodology and tools
• Works small scope projects, typically in
his/her respective work area
• Can be an effective team member on a
Black Belt team

Aligning the Right People to the Project
TimeRequired/SkillLevel
GreenBelt
BlackBelt

Project Selection &
Management

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?This document is a partial preview. Full document download can be found on Flevy:

Some Six Sigma Project Filters
• Is the solution known?
No - Six Sigma Project
Yes - Implement Known Fix
• Is sufficient data available to
quantify the problem?
No - Implement Data Collection
Plan
Yes - Six Sigma Project
• Is the Root Cause known,
supported with data and facts?
Yes - Implement Fix
• Is the problem being
addressed elsewhere?
Yes - Implement other Teams
Solution
• Does the project address a
strategic focus area?
Yes - Six Sigma Project
No - Not Strategically Focused
• Is this a new product, process,
service, or plant?
Yes - Use DFSS Methods
No - Use DMAIC

Six Sigma Metrics
• Defect measures
Defect rate, parts per million (ppm)
Sigma level
Defects per unit (dpu)
Defects per million opportunities (DPMO)
Yield
• Practitioner measures
Defect measures
Cycle time, cost, performance, variability…
Cost savings

Financial Benefits
• Every company may analyze
hard and soft savings
differently
• Need to ensure that the
project organization and
Financial Analysts understand
and adhere to your company’s
set of guidelines regarding
how these are defined and
analyzed/measured

Soft Savings – Examples
• Cost avoidance
• Opportunity cost
• Capital avoidance
• Productivity improvement
• Customer loyalty/
retention
• Reduction in cash flow
• Reduction in need for
working capital
• Conformation to changes
in the law
• Increased safety in the
workplace
• Increased employee
satisfaction
• Increased customer
satisfaction

Critical Success Factors
1. A visible commitment from the top leadership
2. Using the language of six-sigma throughout
the organization
3. Relentless goals that force process
reengineering
4. The use of innovative ideas to improve
processes
5. Use of data and not emotion to make
decisions

End of Presentation
To view the full list of training presentations,
please visit us at:
Operational Excellence Consulting
http://www.oeconsulting.com.sg

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