Process Process Improvement using Improvement using

Six SigmaSix SigmaMBA 8125

April 14th, 2011

______Team 6______Elliott Wienstroer Brad Thielemann

Matt Tinaglia Denzil Tauro

AgendaAgenda• Lean/Six Sigma Methodologies• TQM and Six Sigma• DMAIC• Belts and Certifications• Pro-Six Sigma Companies• Benefits/Criticism• Recommendations• Questions

Six Sigma Six Sigma MethodologyMethodology

This methodology is driven by:

A methodology used to reduce variation to achieve very small standard deviations so that almost all products or services meet or exceed customer expectations

Proactive ManagementFormal

Tollgates (DMAIC)

Genuine Focus on the Customer Culture for

Quality and Change

Analytics Driven Management

Comprehensive Management Philosophy

Goal of 3.4 defects per million

opportunities (DPMO)

Quality at the Source

Lean MethodologyLean Methodology• Process improvement methodology focusing on time improvements

• Identify each process step as Value Added or Non-Value Added

• Mgmt philosophy derived from the Toyota Production System

• Seeks to reduce costs by eliminating 7

types of waste (muda):• Overproduction• Excessive Inventory• Processing• Transportation • Motion• Waiting time• Product Defects

TQM and Six SigmaTQM and Six Sigma• TQM is an integrative philosophy of management for

continuously improving the quality of products and processes

• Main difference lies in the approach: o TQM attempts to improve quality by ensuring conformance

to internal requirements, while Six Sigma focuses on improving quality by reducing the number of defects and impurities

o Six Sigma is a more structured approach that forces data-driven decision making in order to avoid: fixing what isn’t broken, using intuition or guessing, or jumping to conclusions

• Worst projects mistake: Invest in fixing the wrong problem!

DMAIC OverviewDMAIC OverviewDMAIC Objective: Collect and analyze data for the purpose of making decisions

ProcessProcess

xxxxxxxxx

y

DEFINE

11

ANALYZEANALYZE

33

MEASURE

22

Determine the optimal solution, and what settings will yield the very best process in the future

IMPROVE

IMPROVE

44CONTRO

L

Defined, has an owner

Documented

Standardized

Controlled

World class

Process Maturity

55

The DEFINE PhaseThe DEFINE PhaseObjectives

• Clearly define and measure the problem• Understand the process

Tasks & Deliverable

s

• Identify project team members• Train team on Process Improvement tools• Define and measure problem statement• Map current process (high level)• Write and approve project charter

“For some clients, many of their transactions have processed slower lately”From:

To:“For Client A and Client B, their website transactions took two days longer (on average) to process this month than they did last month”

Typical Problem Statement:

The MEASURE The MEASURE PhasePhase

Objectives• Identify inputs / process factors• Measure process capability

Tasks & Deliverable

s

• Identify and measure process inputs• Measure process capability• Map and measure current process (detailed)• Calculate Performance / Quality level

“If you can’t measure it, you can’t manage it!”

400

420

440

460

480

500

0 1 2 3 4 5 6 7 8 9 10

11

12

13

14

15

LCL

UCL

The ANALYZE PhaseThe ANALYZE PhaseObjectives

• Identify the root cause(s) of the issue• Identify potential solution

Tasks & Deliverable

s

• Identify and prioritize input / output relationships• Identify root cause / improvement opportunity• Identify optimum settings for process inputs (X’s)• Current / future state gap identified

The IMPROVE PhaseThe IMPROVE PhaseObjectives

• Develop and test potential solutions (future state)• Evaluate risk

Tasks & Deliverable

s

• Generate possible solutions• Perform cost/benefit analysis• Develop future-state process map• Implement the improvement• Measure new process

The CONTROL The CONTROL PhasePhase

Objectives• Implement controls and standardize• Evaluate benefits

Tasks & Deliverable

s

• Assign ownership of the process• Implement visual controls• Perform periodic reviews• Measure actual financial gain

DMAIC DeliverablesDMAIC DeliverablesDefine

Team is trained and committed, customers are identified, problem identified, charter developed, current process mapped

MeasureData collection complete, current process measured, all inputs and outputs defined, performance / quality level calculated

AnalyzeProcess analysis, input / output relationships, root cause analysis (what needs to be improved), current / future state gap identified and quantified

Improve

Generate (and test) possible solutions, cost/benefit analysis, best solution selected, future-state process developed, implement change or produce implementation plan

ControlNew procedures documented, process monitors / dashboard in place, transfer of ownership back to business management (project closure)

Belts and Belts and CertificationsCertifications

Yellow Belt

Green Belt

Black Belt

Master Black Belt

Certifications for both green belts and black belts are offered by the Institute for Industrial Engineers and the American Society for Quality as well as by most organizations using Six Sigma

Pro-Six Sigma Pro-Six Sigma CompaniesCompanies

$2B$2B

$2B$2B

$11B$11B

$1B$1B

$170

M$170

M

$30B$30B

$350

M$350

M

Benefits & CriticismBenefits & CriticismBenefits• Increased Employee Involvement• Reduced Costs & Greater Profits• Increased Customer & Employee Satisfaction• Competitive Advantage • Processes are Simplified & ImprovedCriticism• Expenses• Hiring New Employees• Lack of Innovation• Support and Acceptance• Marketing Ploy• Negative Effects and Arbitrary Standards

RecommendationsRecommendations• Provide Training• Start Slow• Perform Adequate Business Analysis• Use Analytical/Software Tools• Reduce Errors• Reduce Costs• Perform Periodic Auditing• Select the Right Team• Subdivide Projects into Smaller Six Sigma Projects• Suggest Improvements in Projects for Long Term Benefits

Questions?Questions?