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Six SigmaSix Sigma

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OutlineOutline

What is Six Sigma?What is Six Sigma?Phases of Six SigmaPhases of Six Sigma

DefineDefineMeasureMeasureEvaluate / AnalyzeEvaluate / AnalyzeImproveImproveControlControl

Design for Six SigmaDesign for Six SigmaGreen Belts & Black BeltsGreen Belts & Black Belts

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A Vision and Philosophical commitment to our consumers to offer the highest quality, lowest cost products

A Metric that demonstrates quality levels at 99.9997% performance for products and processs

A Benchmark of our product and process capability for comparison to ‘best in class’

A practical application of statistical Tools and Methods to help us measure, analyze, improve, and control our process

What is Six Sigma?What is Six Sigma?

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1.1. Reduces dependency on Reduces dependency on ““Tribal KnowledgeTribal Knowledge””-- Decisions based on facts and data rather than opinionDecisions based on facts and data rather than opinion

2.2. Attacks the highAttacks the high--hanging fruit (the hard stuff)hanging fruit (the hard stuff)-- Eliminates chronic problems (common cause variation)Eliminates chronic problems (common cause variation)-- Improves customer satisfactionImproves customer satisfaction

3.3. Provides a disciplined approach to problem solvingProvides a disciplined approach to problem solving-- Changes the company cultureChanges the company culture

4.4. Creates a competitive advantage (or disadvantage)Creates a competitive advantage (or disadvantage)

5.5. Improves profits!Improves profits!

Why Companies Need Six SigmaWhy Companies Need Six Sigma

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99.9% is already VERY GOOD

But what could happen at a quality level of 99.9% (i.e., 1000 ppm),

in our everyday lives (about 4.6σ)?

• More than 30003000 newborns accidentally falling

from the hands of nurses or doctors each year

• 40004000 wrong medical prescriptions each year

• 400400 letters per hour which never arrive at their destination

• Two long or short landings at American airports each dayday

How good is good enough?How good is good enough?

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Six Sigma as a MetricSix Sigma as a Metric

Sigma = σ = Deviation( Square root of variance )

-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7

Axis graduated in Sigma

68.27 %

95.45 %

99.73 %

99.9937 %

99.999943 %

99.9999998 %

result: 317300 ppm outside (deviation)

45500 ppm

2700 ppm

63 ppm

0.57 ppm

0.002 ppm

between + / - 1σ

between + / - 2σ

between + / - 3σ

between + / - 4σ

between + / - 5σ

between + / - 6σ

σ

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3 Sigma Vs. 6 Sigma3 Sigma Vs. 6 Sigma

Defines CTQs externallyDefine CTQs internally

Believes 99% is unacceptableBelieves 99% is good enough

Benchmarks themselves against the best in the world

Benchmarks themselves against their competition

Use Measure, Analyze, Improve, Control and Measure, Analyze, Design

Does not have a disciplined approach to gather and analyze data

Relies on capable process that don’t produce defects

Relies on inspection to find defects

Spends 5% of sales dollars on cost of failureSpends 15~25% of sales dollars on cost of failure

The 6 sigma CompanyThe 3 sigma Company

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Motorola ROI 1987-1994

• Reduced in-process defect levels by a factor of 200.

• Reduced manufacturing costs by $1.4 billion.

• Increased employee production on a dollar basis by 126%.

• Increased stockholders share value fourfold.

AlliedSignal ROI 1992-1996

• $1.4 Billion cost reduction.

• 14% growth per quarter.

• 520% price/share growth.

• Reduced new product introduction time by 16%.

• 24% bill/cycle reduction.

Six Sigma ROISix Sigma ROI

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Six Sigma as a PhilosophySix Sigma as a Philosophy

Internal &ExternalFailure Costs

Prevention &Appraisal

Costs

Old Belief4σC

osts

Internal &ExternalFailure Costs

Prevention &Appraisal

Costs

New BeliefCos

ts4σ

5σ

6σ

Quality

Quality

Old Belief

High Quality = High Cost

New Belief

High Quality = Low Cost

σ is a measure of how much variation exists in a process

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Six Sigma ToolsSix Sigma Tools

SPCSPCBaseliningBaselining

DOEDOERational Rational SubgroupingSubgrouping

RegressionRegressionGauge R & RGauge R & R

Hypothesis TestingHypothesis TestingPareto AnalysisPareto Analysis

Components SearchComponents SearchStructure TreeStructure Tree

Tolerance AnalysisTolerance AnalysisProcess MappingProcess Mapping

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Breakthrough Strategy

Characterization Phase 2:Measure

Phase 3:Analyze

Optimization

Phase 4:Improve

Phase 5:Control

Projects are worked through these 5 main phases of the Six Sigma methodology.

Phase 1:Define

Problem Solving MethodologyProblem Solving Methodology

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Define PhaseDefine Phase

Define ProcessDefine ProcessDefine Customer requirementDefine Customer requirementPrioritize Customer requirementPrioritize Customer requirement

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Define PhaseDefine Phase

SIPOC ModelSIPOC Model KanoKano AnalysisAnalysisCustomer SurveyCustomer Survey CTQ DiagramCTQ DiagramCustomer Requirement AnalysisCustomer Requirement AnalysisQFD QFD Literature ReviewLiterature ReviewStandard / Regulation ReviewStandard / Regulation Review

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MeasureMeasureCharacterize Process

Understand ProcessEvaluateEvaluate

Improve and Verify ProcessImproveImprove

Maintain New ProcessControlControl

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DefineProblem

UnderstandProcess

CollectData

ProcessPerformance

Process Capability- Cp/Cpk- Run Charts

Understand Problem(Control or Capability)

Data Types- Defectives- Defects- Continuous

Measurement Systems Evaluation (MSE)

Define Process-Process MappingHistorical PerformanceBrainstorm Potential Defect Causes

Defect StatementProject Goals

Measure Phase

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MeasureMeasureCharacterize Process

Understand ProcessEvaluateEvaluate

Improve and Verify ProcessImproveImprove

Maintain New ProcessControlControl

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Evaluate / Analysis PhaseEvaluate / Analysis Phase

Data AnalysisData AnalysisProcess AnalysisProcess AnalysisFormulate HypothesisFormulate HypothesisTest HypothesisTest Hypothesis

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MeasureMeasureCharacterize Process

Understand ProcessEvaluateEvaluate

Improve and Verify ProcessImproveImprove

Maintain New ProcessControlControl

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Improvement PhaseImprovement Phase

Generate Improvement alternativesGenerate Improvement alternativesValidate ImprovementValidate ImprovementCreate Create ““should beshould be”” process mapprocess mapUpdate FMEAUpdate FMEAPerform Cost/Benefit analysisPerform Cost/Benefit analysis

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Design of Experiments (DOE)Design of Experiments (DOE)

To estimate the effects of independent Variables on Responses.To estimate the effects of independent Variables on Responses.

TerminologyTerminology

Factor Factor –– An independent variableAn independent variableLevel Level –– A value for the factor.A value for the factor.Response Response -- OutcomeOutcome

X YPROCESS

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MeasureMeasureCharacterize Process

Understand ProcessEvaluateEvaluate

Improve and Verify ProcessImproveImprove

Maintain New ProcessControlControl

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Control Control PhasePhase

Control Phase Activities:

- Confirmation of Improvement- Confirmation you solved the practical problem- Benefit validation- Buy into the Control plan- Quality plan implementation- Procedural changes- System changes- Statistical process control implementation- “Mistake-proofing” the process- Closure documentation- Audit process- Scoping next project

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Control Control PhasePhase

Control Plan Tools:

1. Basic Six Sigma control methods.- 7M Tools: Affinity diagram, tree diagram, process

decision program charts, matrix diagrams,interrelationship diagrams, prioritization matrices,activity network diagram.

2. Statistical Process Control (SPC)- Used with various types of distributions- Control Charts

•Attribute based (np, p, c, u). Variable based (X-R, X)•Additional Variable based tools

-PRE-Control-Common Cause Chart (Exponentially BalancedMoving Average (EWMA))

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Customer-driven design of processes with 6σ capability.

Predicting design quality up front.

Top down requirements flowdown (CTQ flowdown) matched by capability flowup.

Cross-functional integrated design involvement.

Drives quality measurement and predictability improvement in early design phases.

Utilizes process capabilities to make final design decisions.

Monitors process variances to verify 6σ customer requirements are met.

What is Design for Six Sigma (DFSS)?What is Design for Six Sigma (DFSS)?

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DFSS Methodology & ToolsDFSS Methodology & Tools

Define Measure Analyze Design Verify

Under-standcustomerneeds andspecifyCTQs

Developdesignconceptsand high-level design

Developdetaileddesign andcontrol/testplan

Testdesign andimplementfull-scaleprocesses

Initiate, scope,and plan theproject

DESIGN FOR SIX SIGMA

DELIVERABLES

TeamCharter

CTQs High-levelDesign

DetailedDesign

Pilot

TOOLS

Mgmt Leadership Customer Research FMEA/ErrorproofingProject QFD Process SimulationManagement Benchmarking Design Scorecards

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Green Belts & Black BeltsGreen Belts & Black Belts

GE has very successfully instituted this programGE has very successfully instituted this program4,000 trained Black Belts by YE 19974,000 trained Black Belts by YE 199710,000 trained Black Belts by YE 200010,000 trained Black Belts by YE 2000““You havenYou haven’’t much future at GE unless they are selected to t much future at GE unless they are selected to become Black Beltsbecome Black Belts”” -- Jack WelchJack Welch

Kodak has instituted this programKodak has instituted this programCEO and COO driven processCEO and COO driven processTraining includes both written and oral examsTraining includes both written and oral examsMinimum requirements: a college education, basic statistics, Minimum requirements: a college education, basic statistics, presentation skills, computer skillspresentation skills, computer skills

Other companies include:Other companies include:Allied SignalAllied Signal --Texas InstrumentsTexas InstrumentsIBMIBM -- ABBABBNavistarNavistar -- CitibankCitibank

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10 / year10 / yearFive Black BeltsFive Black Belts80~100%80~100%Consulting/MentorConsulting/Mentoring/Traininging/Training

Master Master Black BeltBlack Belt

4 / year4 / yearTwo green beltsTwo green belts5%~10%5%~10%

Lead use of Lead use of technique and technique and communicate new communicate new onesones

Black BeltBlack Belt

2 / year2 / yearFind one new Find one new green beltgreen belt2%~5%2%~5%

Utilize Utilize Statistical/Quality Statistical/Quality techniquetechnique

Green BeltGreen Belt

Related Related ProjectsProjectsMentoringMentoring

Time on Time on Consulting/Consulting/TrainingTraining

TaskTask

Green Belts & Black BeltsGreen Belts & Black Belts