Six Sigma: DMAIC Y F (X)

Operational Excellence
Six Sigma
Six Sigma: DMAIC; Y=f(x)

Is it a Goal, a Measure, a Process, a Tool or an expletive deleted?
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M easure A nalyze I mprove C ontrol
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Objectives
M A I C
easure nalyze mprove ontrol
Understand the Basics of the Six Sigma Program Understand How Six Sigma Relates to Lean, TOC, TQM
(Theory Of Constraints; Total Quality Management)
Ability to Define a Strategy and Roadmap for Success
Operational Excellence Training
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Define
M A I C
Is it a Goal, a Measure, a Process, a Tool or an expletive deleted?
Yes
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Define
Six Sigma Is a management methodology
Customer focused Data driven decisions Breakthrough performance gains Validated bottom line results
M A I C
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Customer Focused
Our Performance Compared to Competitors Importance to Customers Complete Quality OTD High
M A I C
Training Shared Goals Price Complaints Moderateto-Low
Were Better
Theyre Better
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Data Driven Decisions
M A I C
Y= f (X)
To get results, should we focus our behavior on the Y or X ?
Y Dependent Output Effect Symptom Monitor Response
X1 . . . XN Independent Input-Process Cause Problem Control Factor
Why should we test or inspect Y, if we know this relationship? Operational Excellence Training
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Breakthrough performance gains

(Distribution Shifted 1.5)
M A I C
2 3 4 5 6
Process Capability
PPM 308,537 66,807 6,210 233 3.4

Defects per Million Oppor tunities
Sigma is a statistical unit of measure which reflects process capability. The sigma scale of measure is perfectly correlated to such characteristics as defects-per-unit, parts-per million defective, and the probability of a failure/error.
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Validated bottom line results

Impact on Bottom Line
M A I C
Assuming a 10% change in the factor
Factors
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Define
Methodology Define Measure Analyze Improve Control
M A I C
Roadmap
Example
Next Project Celebrate Project $
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M A I C
Define

Control
Document process (WIs, Std Work) Mistake proof, TT sheet, CI List
Customers, Value, Problem Statement Scope, Timeline, Team Primary/Secondary & OpEx Metrics Current Value Stream Map Voice Of Customer (QFD)
Validate Project $
Measure

Analyze change in metrics

Value Stream Review Prepare final report
Assess specification / Demand Measurement Capability (Gage R&R) Correct the measurement system Process map, Spaghetti, Time obs. Measure OVs & IVs / Queues
Validate Project $ Validate Project $
Improve

Analyze (and fix the obvious)

Optimize KPOVs & test the KPIVs Redesign process, set pacemaker 5S, Cell design, MRS Visual controls Value Stream Plan
Validate Project $
Root Cause (Pareto, C&E, brainstorm) Find all KPOVs & KPIVs FMEA, DOE, critical Xs, VA/NVA Graphical Analysis, ANOVA Future Value Stream Map
Operational Excellence Methodology
Plan
Execute
Identify Problem
Strategic Link to Business Plan defined in Project Selection Process Defined Business Impact with Op Ex Champion support Structured Brainstorming at all organizational levels Cause and Effect Diagrams identifying critical factors Primary and Secondary Metrics defined and charted Multi-Level Pareto Charts to confirm project focus Develop a focused Problem Statement and Objective Develop a Process Map and/or FMEA Develop a Current State Map Identify the response variable(s) and how to measure them Analyze measurement system capability Assess the specification (Is one in place? Is it the right one?)
Practical Problem
Problem Definition
Characterize the response, look at the raw data Abnormal? Other Clues? Mean or Variance problem? Time Observation Spaghetti Diagram Takt Time Future State Maps Percent Loading Standard Work Combination Use Graphical Analysis, Multi-Vari, ANOVA and basic
statistical tools to identify the likely families of variability

Problem Solution
Identify the likely Xs 5S Set Up Time Reduction (SMED) Material Replenishment Systems Level Loading / Line Leveling Cell Design Visual Controls Use Design of Experiments to find the critical few Xs Move the distribution; Shrink the spread; Confirm the results
Problem Control
Execute Plan
Mistake Proof the process (Poka-Yoke) Tolerance the process Measure the final capability Place appropriate process controls on the critical Xs Document the effort and results Standard Work TPM
Problem Solving
What do you want to know? How do you want to see what it is that you need
to know?
What type of tool will generate what it is that you

need to see?
What type of data is required of the selected tool? Where can you get the required type of data?
Crane Co. Op. Ex. Methodology Originated by MBBs; D. Braasch, J. Davis, R. Duggins, J. OCallaghan, R. Underwood, I. Wilson
Based in part on Six Sigma Methodology developed by GE Medical Systems and Six Sigma Academy, Inc.
Define
Key Items

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M A I C
Customers, Value, Problem Statement Scope, Timeline, Team Primary/Secondary & OpEx Metrics Current Value Stream Map Voice Of Customer (QFD)
(Quality Function Deployment)
Project Selection
Impact
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M A I C
Business Impact
Revenue Growth Cost Reduction Capital Reduction Key Business Objectives On Time Delivery Lead Time Quality Customer Satisfaction
Impact on Operational Excellence Metrics
Evaluate and Rank Suggestions

Effort and Risk
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M A I C
Effort required
People Resources Capital Resources Duration of Project
Probability of success
Technical Risk
Data available Knowledge of process
Management Risk
Aligned with objectives Support by value stream manager
Impact vs. Risk vs. Effort

Assess ROI (Return On Investment) Assign priorities to projects
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Evaluate and Rank Suggestions
M A I C
Example tool to rank projects

0106-01 Project Rating.xls
Example chart to rank projects 0106-01 Project Rating.xls
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Measure
M A I C
Establish measurement capability

Validate the database (transactional) Gage R&R (Repeatability & Reproducibility) Calibration is not enough Many (or most) measurement systems are not capable How good is the data you are using to make decisions?
Fix the measurement system

Enables calculation of process capability Enables calculation of alpha & beta risks This step is often skipped
Analyze
(and fix the obvious)

D efine
M A I C
Find all KPOVs & KPIVs

(Key Process Output Variables; Key Process Input Variables)
FMEA, DOE, critical Xs, VA/NVA

(Failure Modes Effects Analysis; Design Of Experiment)
Graphical Analysis, ANOVA

(Analysis Of Variance)
Future Value Stream Map
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Improve

M A I C
Optimize KPOVs & test the KPIVs

(Key Process Output Variables; Key Process Input Variables)
Redesign process, set pacemaker 5S, Cell design, MRS

(Material Replenishment System)
Visual controls Value Stream Plan
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Control
M A I C
Management of Change
Owned by project champion and value stream manager Critical to long term success of project Physical and cultural changes
Measurement controls
On-going metrics
Visual Controls
Enable workers to self-manage the process
Basic Implementation
Roadmap
Identify Customer Requirements
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M A I C
Understand and Define Entire Value Streams
Vision (Strategic Business Plan)

Deploy Key Business Objectives
- Measure and target (metrics)
- Align and involve all employees - Develop and motivate
Continuous Improvement (DMAIC)

Define, Measure, Analyze, Improve
Identify root causes, prioritize, eliminate waste, make things flow and pulled by customers
Control
-Sustain Improvement -Drive Towards Perfection
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Hoshin
M A I C
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Does it work?.
The top companies in Customer Satisfaction grow MVA at nearly twice the rate of their poor-performing counterparts.
M A I C
Market Value Added
50 40 30 20 10 0
In Billions $
$42 $23
1999 73 companies Ralston Purina Quaker Oats Hilton Hotels Coca-Cola Unilever etc.
Low
High
Customer Satisfaction Index Score

Source: American Customer Satisfaction Index, U Michigan, HBR, 2001
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What about Lean, TOC, TQM

M A I C
Six Sigma
Remove defects, minimize variance
Lean
Remove waste, shorten the flow
TOC
Remove and manage constraints
TQM
Continuous Improvement
Value Stream Map - Current State

6 WEEK Forecast
Suppliers
Production Control
90/60/30 day Forecasts
Customer
MRP
Order Entry Orders/day = 36 Queue = 1.5 Days Demand = 45 per day 2 shifts Takt Time = 18.2 Minutes Competitive Lead Time = 3 Days
Lead Time - 34 Days WEEKLY SCHEDULE
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
342 CT=1sec Co=1 hr. Uptime=85% 1 shift 5 days 1 sec CT=3 min Co=10 min. Uptime=70% 1 shift 7.6 days 3 min
81 CT= 15 min Co=0 min. Uptime=100% 2 shifts 1.8 days 15 min
122 CT= 67 min Co= 23 min FTY = 67% 2 shifts
202 CT= 4 min Co=0 Uptime=100% 2 shifts
90 Lead Time =23.6 days Touch Time = 89 min 2 days 4 min
2.7 days 67 min
4.5 days
Demand = 45/day Takt Time = 18.2 min Competitive LT = 3 days

Suppliers
Customer Data On-Time Delivery

Production Control 90/60/30 day Forecasts Customer
6 WEEK Forecast
MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
Raw = 5 days WIP = 12.1 days FG = 6.5 days

Suppliers
Inventory
6 WEEK Forecast Production Control 90/60/30 day Forecasts Customer
MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
Lead Time = 23.6 days Touch Time = 89 min

6 WEEK Forecast
Suppliers
Flow of Value Lead Time

MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
Max Wip = 7.6 days CT (67) > Takt Time (18)

6 WEEK Forecast
Suppliers
Constraints OTD, Lead Time

MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
CO = 1 hour CO = 23 min CO =
Suppliers
Setup Times OP Margin, Lead Time

6 WEEK Forecast Changeover
MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
Uptime = 70%
6 WEEK Forecast
Suppliers
Maintenance OTD, Lead Time

MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
FTY = 67%
6 WEEK Forecast
Suppliers
Quality
MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
Who is setting the pace? What is the pitch time?

6 WEEK Forecast
Suppliers
Flow of Value OTD, Lead Time

MRP
1X Daily I
Coils 5 days
Stamping
S. Weld # 1
Assembly I
Test I
Shipping I
2.7 days 67 min
4.5 days
D efine
Making it happen
Three major roles Implementer
Learns the tools Works the process Solves day to day problems
M A I C
Manager
Learns the methodology Manages a value stream Reviews project teams
Where do you need to focus?
Leader
Establishes the vision for the future Sets priorities Encourages

Six Sigma: DMAIC Y F (X)

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Operational Excellence

Six Sigma: DMAIC; Y=f(x)

easure nalyze mprove ontrol

Ability to Define a Strategy and Roadmap for Success

Operational Excellence Training

easure nalyze mprove ontrol

Is it a Goal, a Measure, a Process, a Tool or an expletive deleted?

Operational Excellence Training

easure nalyze mprove ontrol

Operational Excellence Training

easure nalyze mprove ontrol

Training Shared Goals Price Complaints Moderateto-Low

Operational Excellence Training

Data Driven Decisions

easure nalyze mprove ontrol

Y Dependent Output Effect Symptom Monitor Response

X1 . . . XN Independent Input-Process Cause Problem Control Factor

Breakthrough performance gains

easure nalyze mprove ontrol

PPM 308,537 66,807 6,210 233 3.4

Validated bottom line results

easure nalyze mprove ontrol

Assuming a 10% change in the factor

easure nalyze mprove ontrol

Operational Excellence Training

Analyze change in metrics

Validate Project $ Validate Project $

Analyze (and fix the obvious)

Operational Excellence Training

Operational Excellence Methodology

statistical tools to identify the likely families of variability

What type of tool will generate what it is that you

Operational Excellence Training

Impact on Operational Excellence Metrics

Operational Excellence Training

Evaluate and Rank Suggestions

Impact vs. Risk vs. Effort

Evaluate and Rank Suggestions

easure nalyze mprove ontrol

Example tool to rank projects

Example chart to rank projects 0106-01 Project Rating.xls

easure nalyze mprove ontrol

Establish measurement capability

Fix the measurement system

Operational Excellence Training

Find all KPOVs & KPIVs

FMEA, DOE, critical Xs, VA/NVA

Graphical Analysis, ANOVA

Future Value Stream Map

Operational Excellence Training

easure nalyze mprove ontrol

Optimize KPOVs & test the KPIVs

Redesign process, set pacemaker 5S, Cell design, MRS

Visual controls Value Stream Plan

Operational Excellence Training

easure nalyze mprove ontrol

Operational Excellence Training

Understand and Define Entire Value Streams

Vision (Strategic Business Plan)

- Align and involve all employees - Develop and motivate

Continuous Improvement (DMAIC)

Operational Excellence Training