Introduction To Six Sigma

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Introduction To Six Sigma


<ul><li> 1. Introduction To SIX - SIGMA Presented by :</li></ul> <p> 2. Agenda 0750 - 0800 Participants introduction 0800 - 0930 Introduction to Six Sigma concept Key Concepts 0930 - 0945 Tea / Coffee Break 0945 - 1200 Forms of waste What is Sigma Components of Six Sigma 1200 - 0100 Lunch Break0100 - 0200 Selecting a Project 0200- 0300 Open session / Q&amp;A 3. Participants Introduction </p> <ul><li>Your Name </li></ul> <ul><li>Department </li></ul> <ul><li>Your job profile </li></ul> <ul><li>Your exposure to Quality Management/ Six Sigma </li></ul> <p> 4. Ground Rules </p> <ul><li>Program success depends on your participation. Actively participate. </li></ul> <ul><li>Please avoid cross-talks. </li></ul> <ul><li>Observe specified timings. </li></ul> <ul><li>Please keep your mobile phones switched off. </li></ul> <ul><li>Feel free to ask question at any point of time. </li></ul> <ul><li>- Restrict question to specific issue being discussed, while general </li></ul> <ul><li>questions can be discussed during Q &amp; A session. </li></ul> <ul><li>Enjoy the program ! </li></ul> <p> 5. Introduction to Six Sigma Purpose of six sigma :To make customer happier and increase profits 6. Origin of Six Sigma </p> <ul><li>1987 Motorola Develops Six Sigma </li></ul> <ul><li><ul><li>Raised Quality Standards </li></ul></li></ul> <ul><li>Other Companies Adopt Six Sigma </li></ul> <ul><li><ul><li>GE </li></ul></li></ul> <ul><li><ul><li><ul><li>Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training. </li></ul></li></ul></li></ul> <ul><li><ul><li>Dow Chemical, DuPont, Honeywell, Whirlpool </li></ul></li></ul> <p> 7. Time Line 2002 1995 1992 1987 1985 Dr Mikel J Harry wrote a Paper relating early failures to quality Motorola Allied Signal General Electric Johnson &amp; Johnson, Ford, Nissan, Honeywell 8. Pilots Six-Sigma Performance Width of landing strip 1/2 Width of landing strip If pilot always landswithin 1/2 the landing strip width, we say that he has Six-sigma capability. 9. Current Leadership Challenges </p> <ul><li>Delighting Customers. </li></ul> <ul><li>Reducing Cycle Times. </li></ul> <ul><li>Keeping up with Technology Advances. </li></ul> <ul><li>Retaining People. </li></ul> <ul><li>Reducing Costs. </li></ul> <ul><li>Responding More Quickly. </li></ul> <ul><li>Structuring for Flexibility.</li></ul> <ul><li>Growing Overseas Markets. </li></ul> <p> 10. Six Sigma Benefits? </p> <ul><li>Generated sustained success </li></ul> <ul><li>Project selection tied to organizational strategy</li></ul> <ul><li><ul><li>Customer focused </li></ul></li></ul> <ul><li><ul><li>Profits </li></ul></li></ul> <ul><li>Project outcomes / benefits tied to financial reporting system. </li></ul> <ul><li>Full-time Black Belts in a rigorous, project-oriented method. </li></ul> <ul><li>Recognition and reward system established to provide motivation. </li></ul> <p> 11. Management involvement? </p> <ul><li>Executives and upper management drive the effort through: </li></ul> <ul><li><ul><li>Understanding Six Sigma </li></ul></li></ul> <ul><li><ul><li>Significant financial commitments </li></ul></li></ul> <ul><li><ul><li>Actively selecting projects tied to strategy </li></ul></li></ul> <ul><li><ul><li>Setting up formal review process </li></ul></li></ul> <ul><li><ul><li>Selecting Champions </li></ul></li></ul> <ul><li><ul><li>Determining strategic measures </li></ul></li></ul> <p> 12. Management Involvement? </p> <ul><li>Key issues for Leadership: </li></ul> <ul><li><ul><li>How will leadership organize to support Six Sigma ? (6council, Director 6 , etc) </li></ul></li></ul> <ul><li><ul><li>Transition rate to achieve 6 . </li></ul></li></ul> <ul><li><ul><li>Level of resource commitment. </li></ul></li></ul> <ul><li><ul><li>Centralized or decentralized approach. </li></ul></li></ul> <ul><li><ul><li>Integration with current initiatives e.g. QMS </li></ul></li></ul> <ul><li><ul><li>How will the progress be monitored? </li></ul></li></ul> <p> 13. What can it do? </p> <ul><li>Motorola: </li></ul> <ul><li><ul><li>5-Fold growth in Sales </li></ul></li></ul> <ul><li><ul><li>Profits climbing by 20% pa </li></ul></li></ul> <ul><li><ul><li>Cumulative savings of $14 billion over 11 years </li></ul></li></ul> <ul><li>General Electric: </li></ul> <ul><li><ul><li>$2 billion savings in just 3 years </li></ul></li></ul> <ul><li><ul><li>The no.1 company in the USA </li></ul></li></ul> <ul><li>Bechtel Corporation: </li></ul> <ul><li><ul><li>$200 million savings with investment of $30 million </li></ul></li></ul> <p> 14. GE Six Sigma Economics Source:1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon total corporation cost/benefits attributable to Six Sigma. 6 Sigma Project Progress 1996 1998 2000 2002 0 500 1000 1500 2000 2500 1996 Cost Benefit (in millions) 15. Overview of Six Sigma PAIN, URGENCY, SURVIVAL COSTS OUT GROWTH TRANSFORM THEORGANIZATION CHANGETHE WORLD 6 SIGMA AS A STATISTICAL TOOL 6 SIGMA AS A PHILOSOPHY 6 SIGMA AS A PROCESS 16. Overview of Six Sigma </p> <ul><li>It is a Philosophy </li></ul> <ul><li><ul><li>Anything less than ideal is an opportunity for improvement </li></ul></li></ul> <ul><li><ul><li>Defects costs money </li></ul></li></ul> <ul><li><ul><li>Understanding processes and improving them is the most efficient way to achieve lasting results </li></ul></li></ul> <ul><li>It is a Process </li></ul> <ul><li><ul><li>To achieve this level of performance you need to:</li></ul></li></ul> <ul><li><ul><li>D efine,M easure,A nalyse,I mprove andC ontrol </li></ul></li></ul> <ul><li>It is Statistics </li></ul> <ul><li><ul><li>6 Sigma processes will produce less than 3.4 defects per million opportunities </li></ul></li></ul> <p> 17. Philosophy </p> <ul><li>Know Whats Important to the Customer (CTQ) </li></ul> <ul><li>Reduce Defects (DPMO)</li></ul> <ul><li>Center Around Target(Mean)</li></ul> <ul><li>Reduce Variation (Standard Deviation) </li></ul> <p> 18. Critical Elements </p> <ul><li>Genuine Focus on the Customer </li></ul> <ul><li>Data and Fact Driven Management </li></ul> <ul><li>Process Focus </li></ul> <ul><li>Proactive management </li></ul> <ul><li>Boundary-less Collaboration </li></ul> <ul><li>Drive for Perfection; Tolerance for failure </li></ul> <p> 19. Data Driven Decision </p> <ul><li>Y </li></ul> <ul><li>Dependent </li></ul> <ul><li>Output </li></ul> <ul><li>Effect </li></ul> <ul><li>Symptom </li></ul> <ul><li>Monitor </li></ul> <ul><li>X1 . . . Xn </li></ul> <ul><li>Independent </li></ul> <ul><li>Input-Process </li></ul> <ul><li>Cause </li></ul> <ul><li>Problem </li></ul> <ul><li>Control </li></ul> <p>f(X) Y= The focus of Six sigma is to identify and control Xs 20. Two Processes </p> <ul><li>Define </li></ul> <ul><li>Measure </li></ul> <ul><li>Analyze </li></ul> <ul><li>Improve </li></ul> <ul><li>Control </li></ul> <ul><li>Define </li></ul> <ul><li>Measure </li></ul> <ul><li>Analyze </li></ul> <ul><li>Design </li></ul> <ul><li>Verify </li></ul> <p>DMAIC DMADV </p> <ul><li>Existing Processes </li></ul> <ul><li>New Processes </li></ul> <ul><li>DFSS </li></ul> <p> 21. </p> <ul><li>KeyConcepts </li></ul> <p> 22. COPQ (Cost of Poor Quality) - Lost Opportunities - The Hidden Factory - More Setups - Expediting Costs - Lost Sales - Late Delivery - Lost Customer Loyalty - Excess Inventory - Long Cycle Times - Costly Engineering Changes Average COPQ approximately 15% of Sales </p> <ul><li>Hidden Costs: </li></ul> <ul><li>Intangible </li></ul> <ul><li>Difficult to Measure </li></ul> <ul><li>Traditional Quality Costs: </li></ul> <ul><li>Tangible </li></ul> <ul><li>Easy to Measure </li></ul> <p>- Inspection - Warranty - Scrap - Rework - Rejects 23. COPQ v/s Sigma Level Cost of Quality % Sales Sigma Level 24. CTQ (Critical-To-Quality) </p> <ul><li>CTQ characteristics for the process, service or process </li></ul> <ul><li>Measure of What is important to Customer </li></ul> <ul><li>6 Sigma projects are designed to improve CTQ </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>Waiting time in clinic </li></ul></li></ul> <ul><li><ul><li>Spelling mistakes in letter </li></ul></li></ul> <ul><li><ul><li>% of valves leaking in operation </li></ul></li></ul> <p> 25. Defective and Defect </p> <ul><li>A nonconforming unit is a defective unit </li></ul> <ul><li>Defect is nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction. </li></ul> <ul><li>A defect does not necessarily make the unit defective </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>Scratch on water bottle</li></ul></li></ul> <ul><li><ul><li>(However if customer wants a scratch free bottle, then this will be defective bottle) </li></ul></li></ul> <p> 26. Defect Opportunity </p> <ul><li>Circumstances in which CTQ can fail to meet. </li></ul> <ul><li>Number of defect opportunities relate to complexity of unit. </li></ul> <ul><li>Complex units Greater opportunities of defect than simple units </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>A units has 5 parts, and in each part there are 3 opportunities of defects Total defect opportunities are 5 x 3 = 15</li></ul></li></ul> <p> 27. DPO (Defect Per Opportunity) </p> <ul><li>Number of defects divided by number of defect opportunities </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>In previous case (15 defect opportunities), if 10 units have 2 defects. </li></ul></li></ul> <ul><li><ul><li>Defects per unit = 2 / 10 = 0.2 </li></ul></li></ul> <ul><li><ul><li>DPO = 2 / (15 x 10) = 0.0133333 </li></ul></li></ul> <p> 28. DPMO (Defect Per Million Opportunities) </p> <ul><li>DPO multiplies by one million </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>In previous case (15 defect opportunities), if 10 units have 2 defects. </li></ul></li></ul> <ul><li><ul><li>Defects per unit = 2 / 10 = 0.2 </li></ul></li></ul> <ul><li><ul><li>DPO = 2 / (15 x 10) = 0.0133333 </li></ul></li></ul> <ul><li><ul><li>DPMO = 0.013333333 x 1,000,000 = 13,333 </li></ul></li></ul> <p>Six Sigma performance is 3.4 DPMO 13,333 DPMO is 3.7 Sigma 29. Yield </p> <ul><li>Proportion of units within specification divided by the total number of units. </li></ul> <ul><li>Examples: </li></ul> <ul><li><ul><li>If 10 units have 2 defectives </li></ul></li></ul> <ul><li><ul><li>Yield = (10 2) x 100 /10 = 80 % </li></ul></li></ul> <ul><li>Rolled Through Yield (RTY) </li></ul> <ul><li><ul><li>Y1 x Y2 x Y3 x . x Yn </li></ul></li></ul> <ul><li><ul><li>E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54 </li></ul></li></ul> <p> 30. </p> <ul><li>Forms of Waste </li></ul> <p> 31. What are the forms of waste? </p> <ul><li>Waste of Correction </li></ul> <ul><li>Waste of Overproduction </li></ul> <ul><li>Waste of processing </li></ul> <ul><li>Waste of conveyance (or transport) </li></ul> <ul><li>Waste of inventory </li></ul> <ul><li>Waste of motion </li></ul> <ul><li>Waste of waiting </li></ul> <p> 32. 1. Waste of correction </p> <ul><li>Repairing a defect wastes time and resources (Hidden factory) </li></ul> <p>Operation1 Test Test Product Operation2 Failure Investigation Rework Failure Investigation Rework Hidden Factory 33. 2. Waste of Overproduction </p> <ul><li>Producing more than necessary or producing at faster rate than required </li></ul> <ul><li><ul><li>Excess labor, space, money, handling </li></ul></li></ul> <p> 34. 3. Waste of processing </p> <ul><li>Processing that does not provide value to the product </li></ul> <ul><li><ul><li>Excess level of approvals </li></ul></li></ul> <ul><li><ul><li>Tying memos that could be handwritten </li></ul></li></ul> <ul><li><ul><li>Cosmetic painting on internals of equipment </li></ul></li></ul> <ul><li><ul><li>Paint thickness more than specific values </li></ul></li></ul> <p> 35. 4. Waste of conveyance </p> <ul><li>Unnecessary movement of material from one place to other to be minimized because - </li></ul> <ul><li><ul><li>It adds to process time </li></ul></li></ul> <ul><li><ul><li>Goods might get damaged </li></ul></li></ul> <ul><li>Convey material and information ONLY when and where it is needed. </li></ul> <p> 36. 5. Waste of inventory </p> <ul><li>Any excess inventory is drain on an organization. </li></ul> <ul><li><ul><li>Impact on cash flow </li></ul></li></ul> <ul><li><ul><li>Increased overheads </li></ul></li></ul> <ul><li><ul><li>Covers Quality and process issues </li></ul></li></ul> <ul><li>Examples </li></ul> <ul><li><ul><li>Spares, brochures, stationary, </li></ul></li></ul> <p> 37. 6. Waste of Motion </p> <ul><li>Any movement of people, equipment, information that does not contribute value to product or service </li></ul> <p> 38. 7. Waste of Waiting </p> <ul><li>Idle time between operations </li></ul> <ul><li>Period of inactivity in a downstream process because an upstream activity does not deliver on time. </li></ul> <ul><li>Downstream resources are then often used in activities that do not add value, or worst result in overproduction. </li></ul> <p> 39. Some more sources of Waste </p> <ul><li>Waste of untapped human potential. </li></ul> <ul><li>Waste of inappropriate systems </li></ul> <ul><li>Wasted energy and water </li></ul> <ul><li>Wasted materials </li></ul> <ul><li>Waste of customer time </li></ul> <ul><li>Waste of defecting customers </li></ul> <p> 40. </p> <ul><li>What is Sigma? </li></ul> <p> 41. Have you ever </p> <ul><li>Shot a rifle? </li></ul> <ul><li>Played darts? </li></ul> <p>What is the point of these sports? What makes them hard? 42. Have you ever </p> <ul><li>Shot a rifle? </li></ul> <ul><li>Played darts? </li></ul> <p>Who is the better shooter? Jack Jill 43. Variability </p> <ul><li>Deviation = distance between observations and the mean (or average) </li></ul> <p>Observations Deviations 10 10 - 8.4 = 1.6 9 9 - 8.4 = 0.6 8 8 - 8.4 = -0.4 8 8 - 8.4 = -0.47 7 - 8.4 = -1.4 averages 8.4 0.0 Jack 8 7 10 8 9 Jill 44. </p> <ul><li>Deviation = distance between observations and the mean (or average) </li></ul> <p>Variability Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 - 6.6 = -0.6 6 6 - 6.6 = -0.6 averages 6.6 0.0 Jack Jill 7 6 7 7 6 45. </p> <ul><li>Variance = average distance between observations and the mean squared </li></ul> <p>Variability Variance Observations Deviations 10 10 - 8.4 = 1.6 9 9 8.4 = 0.6 8 8 8.4 = -0.4 8 8 8.4 = -0.47 7 8.4 = -1.4 averages 8.4 0.0 Squared Deviations 2.56 0.36 0.16 0.16 1.96 1.0 Jack 8 7 10 8 9 Jill 46. </p> <ul><li>Variance = average distance between observations and the mean squared </li></ul> <p>Variability Variance Observations Deviations 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 7 7 - 6.6 = 0.4 6 6 6.6 = -0.66 6 6.6 = -0.6 averages 6.6 0.0 Squared Deviations 0.16 0.16 0.16 0.36 0.36 0.24 Jack Jill 7 6 7 7 6 47. Variability </p> <ul><li>Standard deviation = square root of variance </li></ul> <p>Jack Jill Average Variance Standard Deviation Jack 8.4 1.0 1.0 Jill 6.6 0.24 0.4898979 But what good is a standard deviation ? 48. Variability The world tends to be bell-shaped Most outcomesoccur in themiddle Fewerin the tails (lower) Fewerin the tails(upper) Even very rareoutcomes arepossible Even very rareoutcomes arepossible 49. Variability Here is why:Even outcomes that are equally likely (like dice), when you add them up, become bell shaped 50. Normal distributions are divide up into 3 standard deviations oneach side of the mean Once your that, youknow a lot aboutwhat is going on And that is what a standard deviationis good for ? Normal bell shaped curve 51. Causes of Variability </p> <ul><li>Common Causes : </li></ul> <ul><li><ul><li>Random variation within predictable range (usual) </li></ul></li></ul> <ul><li><ul><li>No pattern </li></ul></li></ul> <ul><li><ul><li>Inherent in process </li></ul></li></ul> <ul><li><ul><li>Adjusting the process increases its variation </li></ul></li></ul> <ul><li>Special Causes </li></ul> <ul><li><ul><li>Non-random variation (unusual) </li></ul></li></ul> <ul><li><ul><li>May exhibit a pattern </li></ul></li></ul> <ul><li><ul><li>Assignable, explainable, controllable </li></ul></li></ul> <ul><li><ul><li>Adjusting the process decreases its variation </li></ul></li></ul> <p> 52. Limits </p> <ul><li>Process and Control limits: </li></ul> <ul><li><ul><li>Statistical </li></ul></li></ul> <ul><li><ul><li>Process limits are used forindividual items </li></ul></li></ul> <ul><li><ul><li>Control limits are used withaverages </li></ul></li></ul> <ul><li><ul><li>Limits = 3 </li></ul></li></ul> <ul><li><ul><li>Define usual (common causes) &amp; unusual (special causes) </li></ul></li></ul> <ul><li>Specification limits: </li></ul> <ul><li><ul><li>Engineered </li></ul></li></ul> <ul><li><ul><li>Limits = target tolerance </li></ul></li></ul> <ul><li><ul><li>Define acceptable &amp; unacceptable </li></ul></li></ul> <p> 53. Usual v/s Unusual,Acceptable v/s Defective Another View LSL USL USL LSL Off-Target Large Variation On-Target Center Process ReduceSpread The statistical view of a problem USL LSL LSL = Lower spec limit USL = Upper spec limit 54. More about limits Good quality:defects are rare (C pk &gt;1) Poor quality:defects are common (C pk 1) </p> <ul><li>Poor quality: defects are common (Cpk</li></ul>