“six sigma for managers” top-down six sigma implementation for american society of quality...
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“Six Sigma for Managers”Top-Down Six Sigma Implementation
for
American Society of Quality
Breakfast MeetingMarch 18, 2004
Two Key Aspects to Six Sigma• Initiative
– Improvement– Breakthrough– Systematic, Focused Approach– Right projects
• Linked to business goals– Right people
• Selected and Trained
– Project Management• Management Reviews
– Sustain the gains• New projects
– Results• Process and Financials
• Methods and Tools– Process Thinking
– Process Variation
– Facts, Figures and Data
– Define, Measure, Analyze, Improve and Control
– 8 Key Tools• Sequenced and Linked
– Statistical Tools
– Statistical Software
– Critical FEW Variables
Hoerl, Roger W., and Ronald D. Snee. (2003). Leading Six Sigma; p. 5
Six Sigma Project Outlook
Practical Problem
Statistical Problem
Statistical Solution
Practical Solution
Key Inputs for Deployment
• Strategy and Goals for Six Sigma• Process Performance Measures
• Project Selection Criteria• Project Identification/Prioritization System• Deployment Processes for Champions, MBBs, BBs, etc• Roles of Management, Champions, MBBs, BBs and Functional
Groups• Curricula and Training System
• Project and Six Sigma Initiative Review Schedule• Project Reporting and Tracking System
• Audit System for Previously Closed Projects• Reward and Recognition Plan• Communication Plan
Hoerl, Roger W., and Ronald D. Snee. (2003). Leading Six Sigma; p. 65
Keys to Successful Deployment
• Committed Leadership
• Top Talent
• Supporting Infrastructure
The Right People
Black BeltsBlack Belts Black BeltsBlack Belts Black BeltsBlack Belts
Green Green BeltsBelts
Green Green BeltsBelts
Green Green BeltsBelts
Green Green BeltsBelts
Each Level Drives the Team to Breakthrough Project Performance Each Level Drives the Team to Breakthrough Project Performance
Six Sigma Leaders
Master Black Belts
Six Sigma Champions
YellowYellowBeltsBelts
YellowYellowBeltsBelts
YellowYellowBeltsBelts
YellowYellowBeltsBelts
YellowYellowBeltsBelts
YellowYellowBeltsBelts
Six Sigma Project Team MembersSix Sigma Project Team Members
•Black Belts•Full Time Six Sigma Resource•4 Weeks Initial training, plus follow-up advanced statistical training•Work 3-4 projects Simultaneously•Mentor 5-10 Green Belt project•Train all Yellow Belts and some Green Belts
•Green Belts•Initially trained Manufacturing or Operations GBs•2 Week training -- equivalent Define and Measure skills•Expectation is to complete at least 1 project per year, and then workon 2nd project•Currently 25% of savings is from Green Belts•Evolved to DFSS, Technical Service, Transactional, Analytical and Reliability GBs
•Yellow Belts•One day of training focusing on Define and Measure tools•Target team members, then future project resources
Six Sigma Resource Definitions
Types of Projects
• Cost Reduction– Yield and Rate Improvement– Downtime Reduction/Equipment Utilization– Raw Material Selection– Utility Optimization (Gas, Steam, Air and Electricity)– Trailer/Railcar Utilization– Accounts Payable Process– Corporate Credit Card Usage
• Cost Avoidance– Reducing effects of future cost increases (disposal/environmental)– Inventory Control
• Capital Avoidance– Plant Utilization– Rate Improvement
• Revenue Enhancement– Plant Capacity Improvement– Tech Service Offerings
About Six Sigma at Grace
• What is Six Sigma (at Grace, at Davison)– Improving business performance by
improving process performance– All kinds of processes -- from mfg to corporate– Leadership, alignment, support– Objectives, financial and otherwise– Organization, infrastructure– Staffing, training (6σ staff and everyone else)
– Projects, scoping, tools, review & follow-up– Results at departmental, product line... Grace levels– Individual mind-set, organizational culture
Davison Six Sigma Savings
05
10
1520
25
30
3540
45
Sav
ings
$,0
00,0
00
2000A 2001A 2002A 2003F
(A = actual; F = forecast)
HardSoftTotal
• Hard orEBIT savings– Revenues up– Costs down
• Soft savings are– Cash Flow– Cost and Capital
Avoidance
EBIT: Earnings Before Interest & Taxes
A project’s savings are tracked over a 12 months period.
Implementing Six Sigma in a Manufacturing Environment
• Evolution• Training• Resources• Projects• Project selection & management• Expansion• Measurement Systems
Sept - Oct. 1999
January 2000
February 2000
June 2000
December 2000
May 2001
June 2001
December 2001
January 2002
April 2002
September 2002
September 2003
Champion training in U.S. and Europe
First Black Belt Wave Training Complete
First Green Belt Training (Admin)
Second Black Belt Wave Training Complete
Second Ops Green Belt Wave Training Complete
First Yellow Belt Training Complete
Six Sigma Project Hopper - 100% Utilized
First Catalyst DFSS Green Belt Class Complete
First German “Regional” Ops GB Class Complete
Sales/Tech Service Green Belt Training Complete
Analytical Green Belt Training Complete
Reliability Green Belt Training Scheduled
Six Sigma – Evolution at Grace
Trained Belts - Davison
Goal is for each salariedemployee to hold an active, engaged Six Sigma role
0
200
400
600
800
1000
1200
1400
1600
2000 A 2001 A 2003 YTD 2008 T
Leaders
Champions
Yellow Belts
Green Belts
Black Belts
805.3%
61641.4%
91561.0%
1500100%
2000 A 2001 A 2003 YTD 2008 TBlack Belts 21 23 19 20Green Belts 33 100 232 560Yellow Belts 0 442 572 800Champions 20 45 82 100Leaders 6 6 10 20Total 80 616 915 1500
Entitlement 5.3% 41.1% 61.0% 100%
RTY studies
CpKstudies
BB/GB Follow-Up
ProjectsChampion
InputsBus. Leader
InputsP
roje
ct H
opp
e r
Business LeaderAcceptance
BB Project LoadingEvaluation (3-4)and Assignment
Project Work
Project ReviewsMonthly General ManagerReviews for Black BeltsMonthly Plant Manager Reviews for Green Belts
Hig
h Pr
iorit
y Pr
ojec
ts•Drive Project Speed•Instant Business Feedback•Opportunity to devote more resources•Understand Barriers•Opportunity to Kill a Project•Unearth additional projects
Hold, Reject,or More Info
Project Selection & Management Process
Some of the tools we use• Project Charter• Process Map, Flowchart• Cause & Effect Analysis (C&E)• Failure Modes and Effects Analysis (FMEA)• Statistics and Data Analysis
– Graphs, plots, etc... Multi-Vari Studies– Control Charts– Measurement Systems Analysis (MSA)– Regression, ANOVA– DOE (improve, optimize)– Surface Response (improve, optimize)– Process Capability
• Control Plan– procedures, specifications, etc.
Define
Measure
Analyze
Improve
Control
2003 Six Sigma Savings
~
1
S ix S ig m a P la n b y Q u a r te r2 0 0 3 T y p e C o n t r ib u t io n ($ K )
C a t a l y s t s
• E a c h Q u a r te r C o n s is te n t in S a v in g s• M is s e d F o r e c a s t b y $ 1 .3 M
• 2 0 0 3 O f f E B IT G o a l b y $ 6 M , b u t G r e a te r th a n 2 0 0 2 b y $ 2 M
More capable savings accountability was used in 2003. Goal was to drive projects more directly and accurately to the bottom line with the use of EBIT Metrics.
Silicas/Adsorbents
• May, 2003 Started New Six Sigma Review Format• Better Six Sigma Alignment to Drive Higher Performance
40302010Subgroup 0
600000
500000
400000
300000
200000
100000
0
Indi
vidu
al V
alue
2/1/20034/1/20026/1/2001C4
6
1
Mean=373679
UCL=543004
LCL=204354
Wave 1 & 2 2002 Focus New Review
200000
100000
0
Mo
ving
Ran
ge
R=63666
UCL=208016
LCL=0
Wave 1 & 2 2002 Focus New Review
I and MR Chart for S/A Cost Red by C6
Forecast
Tracking Cost Reduction Performance using a Control
Chart
Individual Project SavingsCBHP-125 Savings Chart
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04
Month
Sa
vin
gs
Goal
Goal Sum
Actual
Actual Sum
•Every project must report savings monthly.
•Savings accounting is reviewed by the Black Belt and Champion to insure accuracy. Expenses or Capital Investment are subtracted from the savings.
•Savings are tracked for 12 months and subject to audit after one year. This drives the continuous use of the Control Plan.
Six Sigma Program InvestmentWR Grace (Total Commitment)• 44 GBs (2 classes) + 25 GBs (1 class) = $ 1,000,000 (~ $15,000/person)
– Davison Catalyst Portion is approximately 25% - $250,000
• $ 75,000 per GB Class (External Training)
– $50K fee; $25K travel and expense
• $ 25,000 per GB Class (Internal Training)
• Grace has done 10 externally and 10 internally
ROI: Grace Davison Catalysts (~25% of Grace)• Total Savings: $ 15,000,000/year (60 times initial investment annually)
– BB Savings (70%): $ 10,500,000/year– GB Savings (30%): $ 4,500,000/year
• Resources– Black Belts: ~ 20– Green Belts: ~ 230
• Annual Savings per Resource– Black Belts: $ 525,000 per year– Green Belts: $ 20,000 per year
Where We’re going with Six Sigma
• Beyond manufacturing...• Administrative,
Transactional,
Corporate,
Business processes• Sales and Technical Service• Maintenance, Reliability• Lean Manufacturing
– Value Chain
• Factory Physics• Customized Six Sigma Training
The Roadmap “funnels” down the Xs from the trivial many to a “vital few”
What the Six Sigma Project Has Accomplished
Y = f (x1, x2, x3, x4, . . . xn)
Performance of the Y over Time
Variation of the Y
Reproducibility (people / methods)
We begin with the “Y”: Process Map
Reduced measurement error ,“true” capability assessment !
} InitialCapability
Assessment
FMEA reduces variation andeffects for “inputs gone wrong”
C&E Matrix
FMEA
Measurement variation
Actual variation
Repeatability (equipment)
Multi-vari
Multi-vari studieshelp develop associationbetween the Y and key Xs
x1, x7, x18, x22, x31, x44, x57
Multi-Vari identifies Noise variables and reduces the x’s for
DOE
Y = f (x7, x22, x57)DOEs identify the Critical x’s and
their relationship to the Y
3020100
55
50
45
Observation Number
Indi
vidu
al V
alue
I Chart for Chart 1
1
X=50.35
3.0SL=54.21
-3.0SL=46.50 Controls in place for Critical x’s
Summary
• Six Sigma• Grace, and Davison• Six Sigma at Grace
– Evolution– Strategic, infrastructure– Tactical, execution– Results
• Questions...• Drawing...
30+ Inputs
8 - 10
4 - 8
3 - 6
10 - 15