Mayuresh Unde

4th Feb, 2011

Six Sigma

What is Six Sigma?

• A methodology to improve a business process by constantly reviewing, updating and re-tuning the existing process.

• Six Sigma improves the process performance, decreases variation and maintains consistent quality of the process output. This leads to defect reduction and improvement in profits, employee morale, product quality and finally customer satisfaction.

• Six Sigma relies heavily on statistical techniques to reduce defects and measure quality.

Business DefinitionA break through strategy to significantly improve customer

satisfaction and shareholder value by reducing variability & improving quality in every aspect of business.

Technical DefinitionA statistical term signifying 3.4 defects per million

opportunities.

Six Sigma

• The era ‘1986 to 1990’ is referred to as the firstgeneration of Six Sigma.

• Pioneered at Motorola by an Engineer – Bill Smith• Statistical approach• Measured Defects Per Million Opportunities (DPMO)• Focused on:

– Elimination of defects– Improving product and service quality– Reducing cost– Continuous process improvement

Consider 99% Quality Level

5000 incorrect surgical operations per week!

200,000 wrong drug prescriptions per year!

2 crash landings at most major airports each day!

20,000 lost articles of mail per hour!

Cost of Poor Quality (COPQ)

The costs of poor quality are those costs associated with providing poor quality products or services.

There are four categories of costs:1. Internal Failure Cost – costs which occur prior to delivery or shipment of a

product to the customer

2. External Failure cost – costs which occur after shipment of a product to the customer

3. Appraisal cost – costs associated with measuring, evaluating or auditing products or services to ensure conformance to quality standards

4. Prevention cost – cost of activities specially designed to prevent poor quality in products or services

Statistical background

Target = m

Some Key measure

+/ - 3 s

Statistical background

Target = m

‘Control’ limits

+/ - 3 sLSL USL

Statistical background

Required Tolerance

Target = m

+/ - 3 s

+/ - 6 s

LSL USL

Statistical background

Tolerance

Target = m

Six-Sigma

+/ - 3 s

+/ - 6 s

LSL USL

ppm1350

ppm1350

Statistical background

Tolerance

Target = m

+/ - 3 s

+/ - 6 s

LSL USL

ppm0.001

ppm1350

ppm1350

ppm0.001

Statistical background

Tolerance

Target = m

LSL

0 ppm ppm3.4

1.5sUSL

ppm3.4ppm

66810

m

+/ - 6s

Statistical background

Tolerance

• Six-Sigma allows for un-foreseen ‘problems’ and longer term issues when calculating failure error or re-work rates

• Allows for a process ‘shift’

Six Sigma & % accuracy

Defects per Million % AccuracyOpportunities (DPMO)

One Sigma 691,500 30.85%Two Sigma 308,500 69.15%Three Sigma 66,810 93.32%Four Sigma 6,210 99.38%Five Sigma 233 99.977%Six Sigma 3.4 99.9997%Seven Sigma 0.020 99.999998%

Input – process - Output

Input Process Output

X (KPIVs) Y (KPOVs)

Y=f(X)

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Define

Measure

Analyse

Control

Improve

Six Sigma Methodology (DMAIC)

• Motorola developed a five phase approach to the Six Sigma Process called DMAIC which is a continuous process as the diagram shows until the highest level in the Six Sigma is achieved, i.e., 3.4 defects per million.

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DMAIC Steps - 1. Define

• Identify projects that are measurable• Understand the overall business process

– SIPOC diagram

• Understand customer requirement – Voice of the customer (VOC), Kano Model

• Convert customer requirement into CTQ (Critical to Quality)– Quality Function Deployment: Also called as ‘House of Quality’, is a

process to ensure that customer wants and needs are translated into technical characteristics

• Develop team charter & team– Goal Statement

1. Define 2. Measure 3. Analyze 4. Improve 5. Control

SIPOC Diagram

VOCWhat does the Customer Want?

Voice Of the Customer (VOC)

Focus GroupsInterviews Surveys Organizational Metrics

Kano Model

Quality Function Deployment

QFD is a graphic method of expressing relationships between customer wants and design features

Six Sigma Team

Six Sigma Team

• Own vision, direction,integration, results

• Lead change

• Project owner• Implement solutions• Black Belt managers

• Full time• Train and coach

Black and Green Belts• Statistical problem solving experts

• Devote 50% - 100% of time to Black Belt activities• Facilitate and practice problem solving• Train and coach Green Belts and project teams

• Part-time• Help Black Belts

Master BlackBelts

Black Belts

Green BeltsProject Champions

Executive Leadership

• Perform data collection & analysis

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DMAIC Steps 2. Measure

• Overall Data Collection– Checklists, Sampling etc – Define performance standards– Evaluate project baseline & Measure current level of quality

into Sigma. It precisely pinpoints the area causing problems.

• Identify all potential causes for such problems. – Cause & Effect (Fishbone)– Problem areas needing improvement (Pareto analysis), Failure

Mode Effect Analysis (FMEA),

• Measurement System Analysis– R&R Study

5.0Control

2. Measure1. Define 3. Analyze 4. Improve 5. Control

Pareto Analysis & FMEA

Pareto charts are specialized form of column graphs. They are used to prioritize problems so that major problems (or opportunities) can be identified. Pareto principle states that a few problem categories (approx 20%) will present the most opportunity for improvement (approx 80%)

FMEA is a disciplined approach to evaluate designs to ensure that all possible failure modes have been taken into consideration from a probability, severity and detection standpoint

FMEA ratings

No method for

detectionAlways occurs

Performance,

quality, cost or

safety impacts

High (10)

Some methods, but

cannot always be

detected

Occurs less

frequently

Performance,

quality, and cost

impacts

Medium (5)

Can always be

detectedOccurs very rarelyNo impactLow (1)

DetectionOccurrenceSeverity

Compute Risk priority number (RPN) based on these factors

Measurement System Analysis

R & R Study:1. Reproducibility (Reliability) : The ‘Reliability’ of a gauge system is an ability to

reproduce measurements. The reproducibility of a single gauge is checked by comparing the results of different operators taken at different times.

2. Repeatability (Precision): It is the ability to repeat the same measurement by the same operator at or near the same time.

Analysis of Variance Method (ANOVA) is the most accurate method for quantifying repeatability and reproducibility. In addition, the ANOVA method allows the variability of the interaction between the appraisers and the parts to be determined

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• Establish process capability

• Analyze data to find the root cause

3.0 Analyze

Statistical Tools for analysis

Multi-variate analysis & regression testing

Statistical Tests – ‘t’, ‘Z’, ‘Chi-square’,

Hypothesis testing

Estimators – Point estimation & Interval estimation

ANOVA

3. Analyse1. Define 2. Measure 4. Improve 5. Control

DMAIC Steps 3. Analyze

Tools for analysis

Fishbone Analysis

Data Analysis using graphical tools –Scatter diagrams, Least Mean square method etc

Fishbone Analysis – Ishikawa Diagram

Roast

Cool

Grind

Pack

Coffeebeans

Sealed coffee

Moisture content

MaterialMachineMan

Method Measure-ment

MotherNature

Amount of

added water

Roasting

machines

Batch

size

Reliability

of Quadra Beam

equipment

Weather

conditions

Moisture%

Training of

worker

Scatter Diagrams

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DMAIC Steps 4. Improve

• Screen potential causes

• Discover variable relationships among causes and effects

• Establish operating tolerances

• Pursue a method to resolve and ultimately eliminate problems. It is also a phase to explore the solution how to change, fix and modify the process.

• Carryout a trial run for a planned period of time to ensure the revisions and improvements implemented in the process result in achieving the targeted values.

– Design of Experiments (DoE)

4. Improve1. Define 2. Measure 3. Analyse 5. Control

Design of Experiments (DoE)

One factor (X)

low high

X1

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2

Two factors (X’s)

low

high

high

X2

X1

2

high

Three factors (X’s)

low highX1

X3

X2

2

3

DoE is a methodology of varying a number of input factors simultaneously, such that their individual and combined effects on the output can be identified.

DoE Example – Full Factorial Design

# T P C Yield

1 - - - 55

2 + - - 77

3 - + - 47

4 + + - 73

5 - - + 56

6 + - + 80

7 - + + 51

8 + + + 73

T = Temperature(120 & 150), P = Pressure(10 & 14 bar), C = Concentration(10 & 12N), Y= % Yield

# T P C TxP PxC TxC TPC Yield

1 - - - + + + - 55

2 + - - - + - + 77

3 - + - - - + + 47

4 - - + + - - - 73

5 + + - + - - + 56

6 - + + - - + - 80

7 + - + - + - - 51

8 + + + + + + + 73

Temperature effect = ((77+73+80+73) – (55+47+56+51)) / 4 = 23.5Pressure effect = ((47+73+51+73) – (55+77+56+80)) / 4 = - 6Concentration effect = ((56+80+51+73) – (55+77+47+73)) /4 = 2Similarly, TxP Interaction = ((55+73+56+73) – (77+47+80+51)) / 4 = 0.5

Result: High T, Low P and High C, while interactions are marginal and hence can be neglected

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• Monitor the improved process continuously to ensure long term sustainability of the new developments. – Control Charts / SPC analysis

• Monitor the Xs which in turn will monitor the Y• Create a response plan for dealing with problems that

may arise• Share the lessons learnt• Document the results and accomplishments of all the

improvement activities for future reference.

5. Control1. Define 2. Measure 3. Analyse 4. Improve

DMAIC Steps 5. Control

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Six Sigma – Case study

• A dabbawala is a person in the Indian city of Mumbai whose job is to carry and deliver freshly made food from home in lunch boxes to office workers.

• 5000+ Dabbawalas pick up 175,000 lunches from homes and deliver to their customers everyday.

• Only one mistake is made in every 6 million deliveries.

• Accuracy rating is 99.999999. More than Six Sigma.

Benefits of Six Sigma

Focus on customers.Improved customer loyalty.Reduced cycle time.Less waste.Data based decisions.Time management.Sustained gains and improvements.Systematic problem solving.Employee motivation.Data analysis before decision making.Faster to market.Improved customer relationsAssure strategic planningReductions of incidents.Measure value according to the customerBetter safety performanceUnderstanding of processes

Design and redesign products/services.Knowledge of competition, competitors Develop leadership skills.Breakdown barriers between departments and functions.Integration of products, services and distribution.Use of standard operating procedures.Better decision making.Improving project management skills.Sustained improvements.Alignment with strategy vision, and values.Increased margins.Greater market share.Lower costs to provide goods and services.Fewer customer complaints.