SIX SIGMA : AN OVERVIEW

manjusha@imcrbnqa.com

Quality : John Ruskin

Make a Difference

Success

Understand

Improvement

SONY TV US Make Japanese Make

Which one will you buy?

Quality Effort by Activity

Japanese supplier companies

E F F O R T

U. S. supplier companies

Product development

Design

Manufacturing and assembly

Problem solving

The Build Up of Quality in Seven Stages

100% Japanese Style CWQC
STAGE 7 (Consumer oriented) Quality function deployment to define the voice of the customer in operational terms

STAGE 6 (Cost oriented) Quality loss function

STAGE 5 (Society oriented) Product and process design optimization for more robust function at lower costs

40% U. S. Style TQC

STAGE 4 (Humanistic Aspect of Quality) To change the thinking of all employees through education and training. Personal Capability > Process Capability
STAGE 3 (System oriented) Quality assurance involving all departments, i.e. design, manufacturing, sales, and services STAGE 2 (Process oriented) Quality Control during production, Power of Control Charts, and foolproofing STAGE 1 (Product oriented) Inspection after production, audits of finished products, and problem solving activities

0%

The Weave of Quality

Voice of the Customer

Product Planning

President Staff
Design Manufacturing
Quality Control

Sales

Service

Quality Control

CWQC Promotion Activity Education and Training Quality Function Development Management Audit QC Research Group

THE COMPANY WIDE QUALITY CONTROL

Japanese Quality Evolution 100% Quality contribution Due to inspection 75% Quality contribution due to process control

50%

25%

Quality contribution due to process and product design 1983

0% 1945 1950 1960 1970 1980

2000 +

Definition of Sigma Level

Sigma level: The business

metric used to indicate the performance of a process to some specification.

The number of standard deviations we can fit between the mean and the nearest spec. LSL

2
USL

What is the sigma level of the characteristic above

 2,000 lost pieces of mail every hour 5,000 incorrect surgical procedures

Practical Meaning of 99% Good

every week 2 short or long landings at most major airports every day 200,000 incorrect drug prescription every year
99% just isnt good enough !!

Operational Excellence
(with 1.5 shift)

100000
10000 1000

100
10 5 0

Restaurant Bills Doctor Prescription Writing Payroll Processing Order Write up Average Journal Vouchers Company Purchase Material Lot Reject Rate Wire Transfers Airline Baggage handling

Best-inClass

Sigma Scale of Measure

Process Improvement
Reduce Overall Variation
LSL USL

SONY
USL

LSL

Change the Specification

(Customer Acceptability)
LSL USL

LSL

USL

Six Sigma relies on valid data to identify the cause of excessive variation & deficiencies as well as continuously monitoring critical in-process steps, and attainment of customer requirements

Shift the Mean

LSL USL Non Conformances

Without reducing overall variation (hard). Can the entire process be shifted (new center, same range)

The Goal :
Quantitatively this means that the average process at the org. will generate less than 3.4 defects per million opportunities Culturally it means we need to learn how to be nearly flawless in executing our key processes.

Visible & Invisible Factory

Cost / unit =

Total Cost Total Units

Visible & Invisible Factory

CORRECTION INVENTORY CONVEYANCE WAITING UNDER UTILISATION EFFECIENCY DEFECTS

WASTE

NON VALUE ADD

OVER PRODUCTION

Cost / unit =

Total Cost Total Units

Visible & Invisible Factory

PRODUCT
Net Income

EFFECIENCY

WASTE
WAITING INVENTORY VISIBLE Pulled By Customer UNDER UTILISATION CONVEYANCE CORRECTION

DEFECTS
Cost

OVER PRODUCTION
NON VALUE ADD INVISIBLE Pushed By US

The Hidden Factory

To analyze, re-work, and/or scrap potential product we require
More Manpower Extra floor space Longer cycle time More raw material More money

How big is your hidden factory? What happens to cost as defects increase?
Re-Work or Scrap Failure Analysis Operation 1 Re-Work or Scrap Failure Analysis Operation 2 Test Product

Test

Cost of Poor Quality (COPQ)

Beyond the direct costs associated with finding and fixing defects, COPQ also includes:
The hidden opportunity for increased efficiency The hidden labor associated with ordering replacement material The hidden costs associated with disposing off defects

For an average company, the COPQ can be as high as 40% of sales In almost every company where the COPQ is unknown, the COPQ exceeds the profit margin.

Process Improvement
The Goal: Produce goods and services through process management to:
Eliminate defects Reduce production and development costs Reduce cycle times and inventory levels Increase profit margins Improve customer satisfaction

The Strategy: Use a data driven structured approach to attack defects to improve the sigma level of your goods and services

The Cost of Poor Quality/Cost of Running the Hidden Factory

Sigma Level DPMO Defects per Million Opportunities 308,537 66,807 COPQ Cost of Poor Quality Not Applicable 25-40% of Sales

2 3

4
5 6

6,210
233 3.4

15-25% of Sales
5-15% of Sales <1% of Sales

Sigma Level from Defects

Sigma 6 5.5 5 4 3.5 3 2.5 DPMO 3.4 32 233 6210 22,750 66,807 158,655 Yield 99.99966% 99.9968% 99.977% 99.38% 97.7% 93.3% 84.1%

Way to maximise the Harvest (Shut Down the Hidden Factory)

Continuous Process Improvement Foundations/Lean

Visual Workplace
5S Tribal Knowledge

Common Sense
Tools

DMAIC
Define Measurement Phase Learning about an application of Six Sigma principles are driven by selected projects Analysis Phase

Tools and Tactics

Improvement Phase Control Phase

Projects are worked through these 5 main phases of methodology

5 Step Problem Solving Approach

Define Measure Analyze Improve Control

Scoping Calculate COPQ Business Case Establish Team Primary Metric

Process Map Fishbone X/Y Matrix FMEA Data Collection Gage Analysis Graphical Analysis Identify Probable Xs

Inferential Statistics Hypothesis Tests Correlation/ Regression Process Simulation

Design of Experiments Develop New Process Identify New Metrics Pilot & Test

Control Plan
PBL Implementati on Actions

Mistake Proofing Control Charts

WHY DMAIC?
We dont know what we dont know If we cant express what we know in the form of nos., we really dont know much about it. If we dont know much about it, we cant control it If we cant control it, we are at the mercy of chance

Roles and Responsibilities

BLACK BELT GREEN BELT

CHAMPION

LEADERS

WHITE BELT

Harvesting the Fruits in Our Orchards

Sweet Fruit Design 5 Sigma Wall
Bulk of Fruit Optimization

4 Sigma Wall
Service Safety

Customer

Quality

Low Hanging Fruit Basics 3 Sigma Wall Ground Fruit Logic and Intuition

Initiatives

Attacking the Sources of Variability

What tool(s) should we use?

6 5

Tools
Product ScorecardTM Design for Manufcturability

Discrete Event Simulation

Process Mapping Measurement System Analysis Capability Studies Brainstorming SPC Charts Tribal Knowledge

Tools
Design Experiments Failure Modes and Effects Multi-Vary Analysis Fishbone Diagrams Pareto Diagram

4
3 12

Tools

Tools
Common Sense

Where is Your Process? What Kind Of Tools Should You Be Using?

EXAMPLES : TRIBAL KNOWLEDGE

Example 1: A measurement system was out of

control and the inspectors began fighting over what they believed to be the accurate gages. Gage R&R showed that 92% of the variation came from how the inspectors used the gage, not the gage itself.
Example 2: A product line was re-started after being

down for two years but the original operators had to be re-hired in order to produce product that worked.

The Journey :How to plan to

get to Six Sigma
Learn from others who have tried before us. and transform that learning into rapid action Identifying business talent and channel resources to improve our processes Follow a structured: Define, Measure, Analyse, Improve & Control methodology

Customer Wants

How to Satisfy Wants

To get results, should we focus our behaviour on the wants or the how ? -Wants - How - Dependent - Independent - Output - Input-Process - Effect - Cause - Symptom -Problem - Monitor -Empower

Importance of Training

Process Defects-PerMillion Opportunities

We dont know what we dont know If we cant express what we know in the form of numbers, we really dont know much about it. If we dont know much about it, we cant control it. If we cant control it, we are at the mercy of chance

The Approach
Six Sigma applies statistical tools to practical problems Data-driven decision making is the key
Practical Problem Low Yield Statistical Problem Statistical Solution Practical Solution

Process off Target

Center Process

Replace Worn Locator Pin

Performance Obsession
Income Boosting Initiatives (IBI) P & L Statement Income Shortfall (due to Special Causes ) = Savings target for Operations

Identified Projects Six Sigma Methodology

Energy Mission Possible

Power Gas

Waste Mission Possible

CE JE Yield

Chemical Mission Possible

AE

Sourcing Initiatives
Localization Consumables Spares Chemical

VoC VoP Matrix

Surveys Returns Complaints Disputes Concessions Recalls

High
Voice Of Customer

MEDIUM Impact

HIGH Impact

Low

No Selection Block

MEDIUM Impact

Low

High

Voice of Process

Voice of Customer + Voice of Process = IMPACT Impact

Material Efficiency Inventory Errors Manpower Efficiency Investment Avoidance

Six Sigma Projects

DEFINE Champion Process Stakeholder 6S Practitioner 6S Practitioner 6S Practitioner 6S Practitioner

Measure Analyze
Improve

Control
SUSTAIN

Champion Process Stakeholder

Six Sigma Contribution to Strategic Architecture

100% Engaged Employees Transforming the Supply Chain Performance Obsession Customer Experience Second to None Leveraging the Brand

Tangible Benefits of Six Sigma

Six Sigma has a strong focus on money Management buy-ins easier for tangible benefit projects Tangible benefits could be of various types.
Cost Reduction / Saving Increase in Sales / Revenue Enhanced productivity Enhanced measurable Customer Satisfaction Enhanced measurable Employee Satisfaction

Six Sigma Inputs for Success

Committed Champions Internal Training Mentoring Support

Project Metrics Tracking Mechanism

Engagement Levels of all six sigma practitioners

Six Sigma Quality Program

Improvement Process Define products & services Identify customer requirements Compare the two Follow the DMAIC app. Six Sigma Quality Program Improvement Tools 7 QC Tools X-Y Matrix QFD DOE etc. Business Strategy Reduce Cycle Time Reduce Energy Cost Participative Management Benchmarking Integrate with Suppliers

Quality Measurement Process Mean & Stand. Dev. Capability Index Cp, Cpk DPU, DPMO

The Reward

The reward for work well done is the opportunity to do more

- Jonas Salk

sg/apg/p4-10