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ca

Introduction to
Six Sigma
Applying Statistical
Analysis to
Business Issues

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Objectives
Understand Six Sigma
Gain a high-level understanding of the tools
methods and application of Six Sigma
Learn the basic vocabulary of Six Sigma
Understand the roles and responsibilities of
Six Sigma practitioners
Identify the benefits of Six Sigma as a
business improvement methodology

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Agenda

Introduction
Methodology
Roles and Responsibilities
Why Six Sigma
How to Implement Six Sigma

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Introduction

What Six Sigma means

What Six Sigma is
The concept of variation
Performance and defects

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What Six Sigma Means

Past definitions of quality focused on
conformance to standards, as companies
strived to create products and services
that fell within certain specification
limits. -Mikel Harry and Richard Schroeder

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What Six Sigma Means

...this Six Sigma journey will change
the paradigm from fixing products so
they are perfect to fixing processes so
that they produce nothing but
perfection, or close to it. - Jack Welch

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What Six Sigma is

Goal

Metric

Benchmark

Philosophy

Vision

Value

Method

Symbol
Tool

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The Concept of Variation

Variety may be the

spice of life but, for
customers,
consistency is King!

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The Concept of Variation

Every
Everyrepeatable
repeatableprocess
processexhibits
exhibitsvariation
variation

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Measuring Variation

We
Wemeasure
measurevariation
variationusing
usingstandard
standarddeviation
deviation(())

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Performance and defects

LSL

USL

Defects

Defects

Reducing
ReducingVariability
VariabilityIs
IsThe
TheEssence
Essenceof
ofSix
SixSigma
Sigma

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Performance and Yield

2
3
4
5
6

Defects
Defectsper
per
Million
Million
opportunities
opportunities

308,537
66,807
6,210
233
3.4

Yield
Yield

69.20%
93.32%
99.38%
99.98%
99.99%

33to
to6620,000
20,000XXImprovement...A
Improvement...ATrue
TrueQuantum
QuantumLeap
Leap

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Performance in Context
99% Good (3.8 Sigma)

99.99966% Good (6 Sigma)

20,000 lost articles of mail per

hour

Seven articles lost per hour

Unsafe drinking water for

almost 15 minutes each day

One unsafe minute every

seven months

5,000 incorrect surgical

operations per week

1.7 incorrect operations per

week

340 Passengers with Misplaced

Luggage every day

6 Passengers with Misplaced

luggage each month

200,000 wrong drug

prescriptions each year

68 wrong prescriptions per

year

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Methodologies
Two distinctly different methodologies
DMAIC
Define
Measure
Analyze
Improve
Control
When a process needs to
be improved

DMADV
Define
Measure
Analyze
Design
Verify
When a process needs to
be invented
(aka. DFSS-Designed For
Six Sigma)

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The Improvement Methodology

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Define
Define
Define

Measure
Measure

Analyze
Analyze

Deliverables
1. Identify customer wants
2. Project charter
3. High-level process map

Improve
Improve

Control
Control

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Define
Define

Identify Customer Wants

Who are your customers?

Internal vs. external customers

Collect VOC-Voice Of Customer data

Interviews
Surveys
Complaints
Focus groups

Define CTQs-Critical To Quality measures

How does the customer judge your product or service?

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Define
Define

Project Charter

Project scope
Business case
Cost benefit
Roles & responsibilities
Milestones
Deliverables

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Define
Define

High-level Process Map

SIPOC / COPIS

PROCESS
1)
2)
3)
4)
5)

INPUTS
Part Request
Physical Inventory
Call Transfers
Parts
Customer/Equipment
data

Part Required for

a Service Call

1)
2)
3)
4)
5)
6)

SUPPLIERS
Technicians
Buyers
NPC
Refurb
Vendors
NSC

Create Part
Request

OUTPUTS
1) Part Usage
2) Inventory
3) Credit/Debit to P&L
4) Part
5)

Action Part
Request

Receive
Part into
WIP

Use /
Consume
Part

Fulfill &
Ship Part to
Vendor /
NPC

Part Removed
from WIP

CUSTOMERS
1)
2)
3)
4)
5)

Finance
Technicians
Buyers
NPC
Vendors

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Measure
Define
Define

Measure
Measure

Analyze
Analyze

Improve
Improve

Deliverables
1. Identify CTQ characteristic
2. Collect data
3. Calculate sigma

Control
Control

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Measure
Measure

Identify CTQ Characteristic

Getting down to the thing that the project

will target using tools like:

Detailed process mapping

QFD-Quality Functional Deployment
Cause & effect analysis
FMEA-Failure Modes & Effects Analysis

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Measure
Measure

Identify CTQ Characteristic

Consumable
Dispose of part,
part out of WIP

Some Technicains
update part receipt
through Antennea

Page 1

SomeTechnicains
call NSC to have
part receipt updated

Some Technicians
update part usage

Technician
Performs service

Some Technicians
update part receipt
NonConsumable
GE owned

Return to NPC/
branch logistics

X-ship?

Technician holds
part - Part still in
WIP

Yes

Was part used?

No
Some Technicians
continue on call
W/O updating part
receipt

Return part?

No
Technician holds
part - Intransit /
Open P/O

Yes

Part received by
NPC/branch
logistics
(A)
Return part direct to
vendor

Physically ship part

w/ no update,
part still in WIP

Detailed Process Mapping

Ship part to NPC/

branch logistics

Technicain advises
P/E or Logistics of
part return

P/E or logistics
fulfill part from WIP

Part received by
NPC/branch
logistics

(A) NPC/branch
logistics fulfill part
from WIP

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Measure
Measure

Quality
Functional
Deployment
(QFD)

http://www.npdsolutions.com

Identify CTQ Characteristic

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Measure
Measure

Identify CTQ Characteristic

Cause & Effect Analysis, or Fishbone, or Ishikawa diagram

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Measure
Measure
S ys t e m

Identify CTQ Characteristic

Design Verification Process

Potential
Failure Mode and Effects Analysis
(Design FMEA)

S u b s ys t e m
C o m po ne nt
D e s ig n Le a d
C o re T e a m

Houston Mayer
See Project III R1 Report

F M EA N um be r
P re p a re d B y
F M EA D a te

Ke y D a t e

R e v is io n D a t e
P age

Project III
Houston Mayer
22/10/1999
21/08/2000
1

A c t io n R e s u lt s

It e m / F u n c t io n

P o t e n t ia l
F a ilu re M o d e ( s )

P o t e n t ia l
Effe c t(s )
o f F a ilu re

Customer

S
e
v

P o t e n t ia l
C a us e (s )/
M e c h a n is m ( s )
o f F a ilu re

P
r
o
b

C u rre n t D e s ig n
C o n t ro ls

D
e
t

R
P
N

R e c o m m e nde d
A c t io n ( s )

R e s p o n s ib ilit y &
T a rg e t
C o m p le t io n
D a te

Customer

System,

sends in a

Softw are,

needs not fully

configuration

quote request

Integration

met by

tool.

for product.

and Shipping

delivered

requirements

system.

Requirement

overlooked by
Data entry

System

entered and

error

compatability

by a

verification by 10/21/99

verified by

requirements

configuration

configuration

Inside Sales in

not evaluated

tool.

tool.

config. tool.
Sales

by config. tool.
On time

Specific

7 Human error

1 Design

21 Use
configuration

A c t io n s T a k e n

Closed
10/21/99

tool w hen
available.

3 Human error

7 Requirements

1 Order verified

3 Customer

9 Continue order Closed

Jun-00
63 P ublish
comprehensive

Customer

identifies need packing,

delivery and

for CII or SHC labeling and

integraty of

Instruction/

procedure for

requirements

shipping

the product

Special

the 1st Article

review ed by

requirements

may be

Handling

P rocess.

quality

may not be

compramised

Codes P rocess

Overlooked.

Inspection

shipping

assurance in

FMEA-Failure Modes & Effects Analysis

of

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Measure
Measure

Collect Data

Create a data collection plan

Perform a MSA
Measurement Systems Analysis
Gage R & R
Attribute R & R
Test re-test study

Collect data

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Calculating Sigma

Measure
Measure

Calculate process capability

LSL

Defects

Short term (ZST=ST)

Long term (ZLT=LT)
The 1.5 Shift

USL
Defects

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Analyze
Define
Define

Measure
Measure

Analyze
Analyze

Improve
Improve

Deliverables
1. Identify possible causes
2. Narrow down to root cause
3. Confirm the benefit

Control
Control

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Analyze
Analyze

Identify Possible Causes

Identify sources
of variation
using:
Process map
analysis
Graphical
analysis
Brainstorming

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Analyze
Analyze

Narrow To Root Causes

Regression Plot

Confirm
statistically
significant
factors through:

Y = 1026.02 + 98.0500X
R-Sq = 87.9 %

Hypothesis
testing
DOE-Design
Of Experiment

P value = 0.000

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Analyze
Analyze

Confirm The Benefit

Ensure that the effort needed to rectify the

issues identified are financially feasible
Basic ROI-Return On Investment or cost
benefit analysis

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Improve
Define
Define

Measure
Measure

Analyze
Analyze

Improve
Improve

Deliverables
1. Generate and select solution
2. Implement solution
3. Confirm results

Control
Control

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Generate & Select Solution

Pugh Matrix
Solution Alternatives
Alternative 1

Alternative 2

Alternative 3

Alternative 4

Alternative 5

Concept Selection Legend

Better
+
Same
S
Worse
-

Benchmark Option

Solution
generation
through
structured
brainstorming
Solution
Selection based
upon viability
and trade-offs

Importance Rating

Improve
Improve

Criteria 1

Criteria 2

Criteria 3

Criteria 4

Criteria 5

Criteria 6

Criteria 7

10

Criteria 8

Sum of Positives

Sum of Negatives

Sum of Sames

Weighted Sum of Positives

16

13

16

21

17

14

Weighted Sum of Negatives

13

12

10

Totals

15

Key Criteria

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Improve
Improve

Implement Solution

Comprehensive pilot planning

Detailed process maps

SOP-Standard Operating Procedures
Monitoring plans
Contingency planning
Risk management plan

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Improve
Improve

Confirm Results

Ensure that an improvement has been made

and is consistent with expectations

Learn and adapt

Re-assess measurement systems
Adjust improvements as required
Re-calculate sigma
Confirm improvement is statistically significant

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Control
Define
Define

Measure
Measure

Analyze
Analyze

Improve
Improve

Deliverables
1. Standardization and documentation
2. Process monitoring and control
3. Closing the project

Control
Control

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Control
Control

Standardize and Document

Rollout confirmed solution across business

with updated information from pilot

Detailed process maps

SOP-Standard Operating Procedures
Monitoring plans
Contingency planning
Risk management plan

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Monitoring and Control

Control
Control

Individual Value

Ensure project
xs and ys
remain in
statistical
control

60
50

UCL=53.62

66

40
222

30

Mean=34.19
22

20
LCL=14.77

10

Subgroup

10

20

30

40

50

60

70

40
1

Moving Range

SPCStatistical
Process
Control

I and MR Chart for Days

30

20
10
0

UCL=23.86

R=7.303
2
2 2

LCL=0

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Control
Control

Close the Project

Complete project documentation

Complete project
sign-off
Handoff
documentation
to process owner
Celebrate!

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Roles and Responsibilities

Champions

Master Black
Belts

Quality Leader
& BQC
Green Belts

Black Belts

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Champions & Master Black Belts

Champions

Master Black Belts

Create the vision of Six Sigma

Define the path to implement Six Sigma
across the organization
Carefully select high-impact projects
Develop a comprehensive training plan
for implementing the Six Sigma strategy
Ask Black Belts and Green Belts many
questions to ensure that they are properly
focused
Make sure that project opportunities are
acted upon by organizations leadership
and the finance department
Recognize people for their efforts

Understand the big business picture

Develop and deliver training to
various levels of the organization
Assist in the identification of
projects
Coach and support Black Belts in
project work
Participate in project reviews to offer
technical expertise
Take on leadership of major
programs
Facilitate sharing of best practices
across the corporation

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Black Belts & Green Belts

Black Belts
Act as Six Sigma experts
Lead and direct teams in project
execution
Coach and Mentor Green Belts
Ensure that the results are
sustained
Identify potential barriers to
project completion
Report progress of both BB and
GB projects to appropriate
leadership

Green Belts
Function as Green Belts on a
part-time basis
Participate on Black Belt
projects as content experts
Lead Green Belt projects
Identify potential Six Sigma
projects

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Return on Investment

In 2000 GEs gross annual benefit was $6.6 billion.

CEO Larry Bossidy brought AlliedSignal back from the

verge of bankruptcy. Cumulative benefits $2 billion in
direct savings

Raytheon improved its cost of doing business by more

than $1 billion annually in 2001.

Average financial benefit per project $120,000

Motorola claims a Six Sigma ROI of between 10:1 & 50:1

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Performance Improvements
Increased profits
Decreased operating costs
Improved customer satisfaction
Decreased cycle-time in processes
Increased employee morale

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How To Implement Six Sigma

Factors for success

Leadership
Communication
Rewards & recognition
Training
Launching the initiative
Implementation
Sustaining the effort and return

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Leadership Buy-in
Clear, unwavering direction on deploying
Six Sigma
Development of a strategy for deployment
Personal involvement
Willingness to revise company policies and
procedures to be supportive
Insistence on tangible results

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Communication
Clear and precise communication when
launching the initiative
Frequent updates on initiative status
Consistent communication plan

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Rewards and Recognition

Rewarding Green Belts for project
completion
Recognizing team members for working on
projects
Recognizing major milestones in project
progress

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Training
Black Belt
Champion
Green Belt
Awareness

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Launching the Initiative

1.
2.
3.
4.
5.
6.
7.

Set vision and goals for Six Sigma initiative

Develop deployment plan
Develop clear implementation plan
Develop Six Sigma budget
Train Champions and BQC members
Select Green Belts for first round of training
Select Six Sigma Leader

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Implementation
1.
2.
3.
4.
5.

Select first round of projects

Develop reward and recognition strategy
Train Green Belts
Develop project review system
Identify potential Black Belts within the
organization

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Continue Momentum

Well defined training strategy

Monitoring system to ensure gains are
sustained
Management review of Initiative
Continue to have projects ready to start
Recruit and train Black Belts

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Sustaining the Return

Continue to budget for Six Sigma

Constant communication strategy
Continuous training and improvement

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Information Sources

Six Sigma Software

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